I. Problem statement Which strategy should Pyramid Door, Inc. implement, along with increased advertising for 100 dealers to achieve the sales goal of $12.5 million for the year of 2006? The four strategic options are increasing the number of non-exclusive dealers by 100, developing a formal executive franchise with 27 dealers so they would exclusively sell Pyramid Door products, reduce the number of non-exlusive dealers by 100, and the last plan was to only do a better job with current distribution policy and network. II. Industry Analysis A. National industry analysis: In the residential garage door industry sales are projected to be $2.25 billion representing a 2.4% increase. There are several large national
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III. Organizational Analysis Pyramid Door currently uses 2 distribution centers which help distribute to 11 Western and Rocky Mountain states as well as North and West parts of Texas. They have 350 of 3002 dealers that service the 150 markets that they compete in. This means they only distribute to 11.7% of total available dealers. Pyramid Door’s sales force consists of 10 technical sales representatives. 8 representatives call on each independent dealer twice a month on average which means each representative has about 38 dealers to call and about 76 calls to make each month. The 2 other representatives call on the 50 exclusive dealers which means each representative only has 25 dealers to call for a total of 50 calls on average. If each sales representative costs $80,000 a year, the total cost of representatives is $800,000 or $640,000 for independent dealers and $160,000 for exclusive dealers. Each independent sales representative has a total dealer sales contribution of about $349,600. On the other hand the exclusive sales representatives each have total dealer sales contribution of $3,220,000.
IV. Alternatives (with pros and cons) A. Status Quo i. Advantages 1. Pyramid will be able to focus on doing a better job with its current distribution policy and network.