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Sadman:: Stepsmart Fitness Case Analysis

The document analyzes the problem of a fitness equipment company needing to increase sales in the New England district by 59.5% by 2013 to meet goals. It evaluates three alternatives to address underperforming salespeople by continuing the existing team, hiring new salespeople, or replacing salespeople. The recommendation is to hire a new salesperson, put an underperforming salesperson on probation with supervision, and reallocate territories to improve productivity and sales.

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RohanMohapatra
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115 views

Sadman:: Stepsmart Fitness Case Analysis

The document analyzes the problem of a fitness equipment company needing to increase sales in the New England district by 59.5% by 2013 to meet goals. It evaluates three alternatives to address underperforming salespeople by continuing the existing team, hiring new salespeople, or replacing salespeople. The recommendation is to hire a new salesperson, put an underperforming salesperson on probation with supervision, and reallocate territories to improve productivity and sales.

Uploaded by

RohanMohapatra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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SADMAN: StepSmart Fitness Case Analysis

BACKGROUND

Company Customer Collaborators Context

• 18% market share in the • Retail Products - Big Box • CRM tool supplier • Lower bargaining power of
US industry of exercise Retailers, Sporting the buyers: Highly
equipment's Equipment Chains and fragmented US health club
• Company held market Online Retailers industry,
share of • Private & Institutional • Competition rivalry: Low
• 27% in retail Products – Private (18% market share)
• 10% in Pvt. Organizations such as • Threat from substitutes: Low
• 17% in Commercial Private Clubs, Universities, (Increased usage of exercise
• Competitive advantage- Training facilities for sports equipments required health
Products’ Quality and and Residential property clubs to replace them before
Effectiveness • Commercial Products – the usually expected life)
• Revenue- $630 million Health clubs charging fee
(2011)
• Gross profit- 37%
(Commercial Sales)
Problem Statement
Analysis of Wallace’s report:-

Year Sales(US) in District(in % of sales


Sales Gap(to be %
millions millions) attainable Target(Mn) achieved) increase
 
2011 184 9.48 5.15 13.8 4.3 45.6
2012 205 10.07 4.92 15.3 5.3 52.4
2013 228 10.70 4.70 17.1 6.4 59.5

Cooper’s Problem:

To increase district(New England) sales by 59.5% to achieve 100% attainment of BPI goal by 2013.

To achieve this Cooper needs to address:


Benefits and Drawbacks of termination and new hiring
Salesforce Evaluation methods
Criteria and Alternatives

Criteria for Evaluation

1. District sales of Step Smart’s Equipment.


2. Salesforce Productivity.
3. Cost Incurred.

Alternatives:

1. Continue with existing salesforce and reassign territories to salespersons with good sales record.
2. Hire new salesperson, put some existing salesperson under probation and reassign territories to the newly
formed salesforce.
3. Replace existing salesperson with a more experienced and mature one, subsequently reassign territories to
the newly formed salesforce.
Recommendation: Alternative
2
1. Termination of Concetta’s service and hiring a new salesperson in her place, additional revenue can be utilized
for training and maintaining client relations.
2. Put Foster under probation and assign Ellise to supervise him. Regular feedbacks from customer can be
introduced to keep a check on salesperson’s work ethic.(improving CRM).
3. For Averty- reassign some of his territories so that he can focus more on existing clients and also on improving
sales.
4. To improve the overall salesforce productivity(i.e. revenue/account and account/km^2) Cooper needs to
reassign territories so that the account/km^2 remains same for all of them.
5. The sales force evaluation to be done based on % of active accounts, revenue/account and also the BPI metric
mentioned by Wallace.
6. Based on the product sales of all 6 salesperson the company should focus more on selling Cardio( average price
$2134), Strength(average price $1825) and Technology(average price $1000) as chances of generating higher
revenue would increase.

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