Haverwood Case Analysis
Amy Weaton
Professor Drago
Haverwood Furniture Haverwood Furniture Individual Summary
Introduction:
In 2008, Haverwood Furniture and Lea-Meadows Inc. merged into one company. The issue at hand involves merging the selling efforts of the two companies. They both go about selling their products differently and the best plan of action is uncertain. John Bott, of Haverwood, believes that Haverwood sales representatives implement the best selling strategy whereas Martin Moorman, the national sales manager at Lea-Meadows believes that they have the superior strategy.
Haverwood is a manufacturing company that makes medium-high priced furniture made out of wood. Net sales for Haverwood was 75 million in 2007 with a before tax profit of 3.7 million. They employ their own sales representatives who represent 1000 different retail accounts for the company. These representatives earn an annual salary of 70,000 (plus expenses) and receive a commission of .5% of the company’s net sales. Haverwood believes that their sales personnel are highly regarded in the furniture industry, knowledgeable about wood furniture, and willing to work with buyers and retail sales personnel. The only negative aspect about Haverwood’s selling strategy is that all of the retail accounts that the merger will create do not carry the complete Haverwood line. In order to combat this, Botts was instructed to push the sales reps, urging them to make 10 sales calls per week and increasing the call frequency to seven calls per year.
On the other hand, Lea-Meadows is a small, privately owned manufacturer of upholstered furniture for living and family rooms. The company is known for using some of the finest fabrics and frame construction. Their net sales in 2007 were 5 million. Total industry sales for upholstered furniture manufacturers were 15.5 billion. This number is expected to increase 3% annually in the future. Lea- Meadows employs 15 sales agents. These agents also represent several
Professor Drago
Haverwood Furniture Haverwood Furniture Individual Summary
Introduction:
In 2008, Haverwood Furniture and Lea-Meadows Inc. merged into one company. The issue at hand involves merging the selling efforts of the two companies. They both go about selling their products differently and the best plan of action is uncertain. John Bott, of Haverwood, believes that Haverwood sales representatives implement the best selling strategy whereas Martin Moorman, the national sales manager at Lea-Meadows believes that they have the superior strategy.
Haverwood is a manufacturing company that makes medium-high priced furniture made out of wood. Net sales for Haverwood was 75 million in 2007 with a before tax profit of 3.7 million. They employ their own sales representatives who represent 1000 different retail accounts for the company. These representatives earn an annual salary of 70,000 (plus expenses) and receive a commission of .5% of the company’s net sales. Haverwood believes that their sales personnel are highly regarded in the furniture industry, knowledgeable about wood furniture, and willing to work with buyers and retail sales personnel. The only negative aspect about Haverwood’s selling strategy is that all of the retail accounts that the merger will create do not carry the complete Haverwood line. In order to combat this, Botts was instructed to push the sales reps, urging them to make 10 sales calls per week and increasing the call frequency to seven calls per year.
On the other hand, Lea-Meadows is a small, privately owned manufacturer of upholstered furniture for living and family rooms. The company is known for using some of the finest fabrics and frame construction. Their net sales in 2007 were 5 million. Total industry sales for upholstered furniture manufacturers were 15.5 billion. This number is expected to increase 3% annually in the future. Lea- Meadows employs 15 sales agents. These agents also represent several