case study analysis- b2b

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  • 7/28/2019 Case Study Analysis- B2B


    Case Study Analysis (Hayes- Dana Limited Automotive Aftermarket)

    Submitted By:

    Ashish Mittal (M-11-03)

    Mohit Pandey (M-11-09)

    Ans 1:

    There are mainly three available options are mentioned in the case:

    Sales $ Jobber Buys direct at extra 20% off

    Buying gro upmember buysdirect at extra10% off

    Jobber buysthroughwarehousedistributor

    Sales $ $240000 $240000 $240000% Gross Profit 42 35 30% ROI 144 150 171

    Yes Mr. Moore should accept the offer of Mr. Peterson offer because:

    He alleged that his members were the strongest jobbers in the region and held a verylarge proportion of the aftermarket business.

    They were giving an extra discount which can be utilized for hiring more sales reps

    as their 32 warehouse distributor were not performing up to the market andperforming inadequate job and Mr Moores group plan was to build a central warehousewithin rwo years which will help in handling the extra volume.

    Changes required in Policy

    Contribution margin were a little high at 40%. It should be lowered down to create aprice competiveness in the market which will helps in increasing the sales.

    There was a need to bring more flexibility in the present policy as it was a little rigid.

    The discount would be given on the reputation of the WD and it should be different for reputed WD and for newly formed formal buying groups.

    Policy shoul be such that it will help in mailtaing a long lasting relationships with theWD.,

    They should be free from absorbing new inventory taxes floor and personal taxes

    Training of local sales force must be the responsibility of the company and not thedistributors

  • 7/28/2019 Case Study Analysis- B2B


    Providing efficient back up service and sales force for performance

    Ans 2:

    Mr. Moore should implement the change in the following way:

    He should have started giving extra discounts on the basis of WD performance. If anyone is not performing up to the mark than it should not be liable for any discount until and that particular WD start performing again.

    Start welcoming newly formed formal buying groups as they were new and innovativeand have more willing to do hard work to establish themselves in the market.

    Build a central warehouse from which it will be easy to maintain the whole supply chainand make it more efficient. This would also helps in reducing the cost as well asattaining the economies of scale.


    Other options he should consider are:

    Try to optimize the overall supply chain with the help of a central warehouse. Use allthe point of sale data through MIS and then analyse it so that to reduce the inventorycost, acquiring optimal shelf space, and to reduce the carrying cost.

    Try to build more sales force which will ultimately increase their and helps them topenetrate more in the existing competitive market. It will give them an upper edgecompare to others. It can be done by a slight decrease in contribution margin.

    They can also conduct a feasible study to know exactly the cost of transition from oldrigid policies to more flexible and market oriented policies. It should include the cost of increased sales force, cost of distributing new warehouses, intangible cost of lost realtons with old WD or making a new relationship with any new formal buyinggroup.