Comparison
Alternatives:
1) Open up a Peak Garage Doors, Inc dealer which would cover 14 markets and would only sell and service Peak garage doors.
2) Expand Peak Garage Doors, Inc into other states.
3) Increase - call campaign aggressiveness.
4) Work with Overhead Door and Chamberlain to distribute Peak Garage Doors, Inc.
5) Network with large home center chains (Home Depot, Menards, and Lowe’s Companies)
6) Increase dealer saturation in markets currently served by the company
7) Development of the Peak Garage Doors, Inc., exclusive franchise program
8) Reduce the number of independent dealerships
Recommendations:
Alt. 1 (New Dealers) ACCEPT – Since each inclusive dealer averages only $9200 in sales annually we can assume that opening up a new dealer which sells and services only Peak garage doors might compare to the annual sales of exclusive dealers. IN 2003, exclusive dealers made up $6,440,000 of annual sales and roughly $128,800 per dealer. The downside of this would be the cannibalization of inclusive dealer sales. Adding one new dealer to each market would produce $12,800,000 in sales, and therefore at most cannibalize $3,220,000 in sales from inclusive dealers. The cost of new sales reps of $80,000 incrementally would be a downside.
Alt. 2 (Expand into new states) REJECT – With $9,200,000 in annual sales and service in 12 states, each state represents approximately $766,666. Expanding sales would be appropriate for the long-run but a short-term disaster in regards to start-up costs and advertising.
Alt. 3 (Call-Campaign) REJECT – Increase the aggressiveness of technical sales representatives or hire more sales reps at a direct cost of $80,000 in order to increase presence throughout dealerships.
Alt. 4 (Distribute) ACCEPT – Work with Overhead Door and Chamberlain to distribute Peak Garage Doors offering a commission rate for the sale of each...
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