Growth Enterprise

7/29/2019 Growth Enterprise

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By: Ishan AbrolAkanksha Goel

Yuvraj Aggarwal

AR Ravishankar


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Introduction Melita Sanchez is owner of Growth Enterprise

B.S graduate in business.

One year cell phones sale experience. Sales representative for software producer.

Accto Company, Saleco Inc and Invo Inc.

Working at 60% of her capacity.

Looking to take up new lines.


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Current Job Responsibility Call on possible customer.

Fax license copy to respective producer, once the sale is

made. Producer then UPS the programs directly to the

customer.

Alternatively provide a key code for a website

download. Producer then bills the customer.


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Current Job Responsibility Melita receives 5-10% commission on sale.

She pays her own expenses.

Producers handles users queries.


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Offers at handLocal Software Company

Job requires to sale network security product.

Software tracks keystrokes and mouse clicks.Annual sales of about $150,000.

2% commission on annual sales.


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Offers at handMetclean

Is a small manufacturer.

Produces solvents used to make coating for metalproducts.

Facing intense competition.

Last year sales were $500,000.

Can handle four times growth.


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Offers at handMetclean

Complete marketing effort is desired.

Handle pricing, advertising and sales effort. May travel 200 miles around Columbus.

12% commission on sales.


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SalesCompany Sales Percentage

CommissionCommission

Accto software $250,000 10% $250,00Saleco software $100,000 10% $100,00

Invo software $200,000 5% $100,00

Total Commission $450,00

For the year 2003


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Options before Melita :A. Continue with Growth Enterprise , with more efforts

to tap more from it.

B. Accept the offer of Metclean at the opportunity costof giving up her own firm.

C. Keep both options alive by doing some trade-offsbetween them


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p on on nue w rowEnterprises

If she works @100% capacity then $75,000 Make a cut of 3% for her expenses, involving setting up a small

office space for calling, she can earn $72,750 (assumption)

We have not included additional income of $3000 by sellingsecurity software on grounds of her moral and ethical standards.

SOFTWARE % COMMISSION AMOUNT

Accto Software 10% on $250,000 $25000

Saleco Software 10% on $100,000 $10000

Invo Software 5% on $200,000 $10000TOTAL @ 60% capacity $45,000


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12% commission

But achieving 4X sales with just the efforts of Melita is highlyunlikely in a short spanSo, taking $60000 as an optimistic figure and making a cut of 12%for expenses, involving travelling etc., she can earn $56,400(assumption)

ANNUAL SALES COMMISSION AMOUNT

$500,000 $60000

2X the current sales $120,000

: :

: :

4X the current sales $240,000


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Accepting Metclean OfferPros: Cons:

Highly attractive %

Can get huge returns ifturned to be a hit

Challenging Job profile

Can gain insight into a newindustry

Giving up well establishedexisting set up for a riskyoption

Highly demanding

Lack of product and industryknowledge

Lose of independence Shift from Non Competitive

environment to a competitiveone


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Continue with A and ask Metclean to let her carry theagent work at sales commission of 2-5%

Can earn $45,000+ extra

Growth Enterprise

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