ALAIN CARDON ANALIZA TRANZACTIONALA PDF

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Published on Nov View 2. The largest category of floor coverings is carpet and rugs, followed by resilient coverings vinylhardwood, ceramic tile, and laminates. Cardon Carpet Mills, Inc. The company markets its products under the Masterton and Chesterton brand names.

Based on the present state of the industry and performance init pleased the directors. The business recorded a profitable sales growth 3. Given recent developments within the floor covering industry, Robert Meadows the president of Cardon Carpet Mills, Inc. Thus, Suzanne Goldman, a special assistant to the president was given a task to prepare a position paper for the president.

Nevertheless, Goldman received unfavourable feedback from the companys wholesaler who did not agree alaain the proposal. There have been three major competitive trends that occurred within the industry.

The first trend to occur happened in the mid s when the larger carpet and rug manufacturers began to eliminate the margins paid to wholesalers by bypassing them and selling directly to retailers. Similar manufacturers continued their use of wholesalers due to their lack of capital. Bya majority of the carpet and rug sales for residential carpet and rug sales were distributed through company distribution centres to retailers.

This altered the industry. The next trend that occurred was alani the early s with the emergence of retail buying groups. They would combine their purchases in order to obtain quantity discounts from manufacturers. The last change acrdon place when Shaw Industries, the carpet and rug industry leader, began to open and operate its own retail stores and commercial dealing network.

This action led to Shaw Industries being dropped by big stores such as Home Depot and several buying groups. A couple years later Shaw Industries sold its retail stores and was picked up again by Home Depot.

As a result of all these effortswas an upward trend in dollar sales over the past decade but marginal profitability for the industry.

Referring to Exhibit 1 pageit is estimated that carpet and rugs commanded Other floor covering types such as hardwood, ceramic tile and laminate had enjoyed an increasing in market shares.

Sincethe export market for U. This poor performance was due to the lack of marketing efforts and the industry had failed in communicating effectively to consumers about the value added of their products besides unable to differentiate their product quality from other floor coverings. The carpet and rug industry as a whole only spends 2.

The declining demand for carpet and rugs, excess manufacturing capacity and losses profit margins reduced the number of carpet and rug manufacturers from more than in the mids to about companies in early This is due to consumers were changing their preferences to other floor covering types such as hardwood, ceramic tile and laminate. According to Exhibit 1 pagehardwood recorded an increment by 1. These scenarios then lead to mergers, acquisitions and bankruptcies among manufacturers.

Sincemergers and acquisitions reflected a push to build further economies of scale in the production and distribution of carpet and rugs. Byit was estimated that 10 companies in the industry produced 91 percent of carpet and rug sales in the United States. The company also has the distinction of being the largest carpet and rug manufacturer in the world. Contract sales to institutions and businesses are also made but it accounts for only 28 percent of company sales and occur principally in the south-eastern United States.

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Besides that, the company also had no export sales. Currently, the company distributes its line through seven floor covering wholesalers located throughout the United States. These wholesalers then supplied 4, retail accounts including department stores, furniture stores, and floor covering specialty stores.

The distribution records revealed that 80 percent of residential segment sales were made through 50 percent of its retail accounts. For marketing activities, the company commonly advertised its business through shelter magazines and newspapers. The emphasis in advertisements was on fibre type, colours, durability and soil resistance. The company was very particular in producing high quality advertisement because it represents the image of the company besides to attract and gain high confidence from the consumers.

In order to have a close relationship with wholesalers and retail accounts, the company employed two regional sales coordinators who acted as a liaison with wholesalers, assisted in managing the cooperative advertising program, and made periodic visits to large retail accounts.

They also responsible for handling contract sales for institutions and businesses. The company also had long-term relationships with its seven wholesalers. Two had represented the companys products for over 30 years, four had been with the company for 20 to 25 years, and one had been with the company for 10 years. These wholesalers also maintained extensive sales organizations with the average wholesaler employing 10salespeople. As a result, on average retail accounts received at least one sales call per month.

By building a good long-term relationship with the wholesalers, it benefited the company in term of the wholesaler already know the market and retail accounts.

Cardon Carpet Case Analysis

In addition, the company also already have its own consumers thus it can reduce their expenditure on penetrating new accounts and market. Wholesaler sales representatives performed a variety of tasks. The sales representatives were not only responsible in sales activities, but they also have to check inventory and carpet samples, arranging point-of-purchase displays, handling retailer tranaactionala and complaints, and taking orders.

It was spent about 25 percent of an average salespersons anakiza on non-selling activities. According to Goldmans evaluation of the sales program also revealed that 40 percent of each onehour sales call was devoted to selling Cardon Carpet Mills carpeting, while the rest trnazactionala percent was devoted to selling noncompeting products.

This finding was frustrating because the company management felt that the sales representatives should devoted their time more on selling the companys product line. Reduction in its price to wholesalers. There was pressured from several wholesalers to reduce the products price in order to accommodate retailer pricing demands.

Cardon Carpet Case Analysis

This is due to an increasing number of their retail accounts had joined regional retail buying analizz and were seeking price breaks comparable to those made possible through their group purchases.

Thus, the company agreed to consider a reduction in its price to wholesalers that could be passed on to retailers. The reduction in its price means that the profit margin of the company will be lesser and this is not good for the business growth. To choose whether go direct or through distribution. Currently the company was relied on its manufacturers to sell the product to retail accounts.

But, with the recent developments in tranzactiknala industry and its competitive position, the possibility of establishing its own distribution centres or wholesale was raised by the board of directors.

Thus, Suzanne Goldman needs to evaluate andexamine both options meticulously so that the best decision could be made for the company. Based on the companys sales growth, it recorded a profitable sales growth of 3.

In addition, the companys cash flow was more sufficient to fund its present initiatives. It shows that currently the company experiencing good performance in the business.

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This positive figure shows that the company was laain a success in industry market shares. Moreover, Cardon Carpet Mills also had analizx good long-term relationship with its seven wholesalers who helped them in selling its products throughout the United States. Two of them had represented the companys products for over 30 years, four had been with the company for 20 to 25 years and one had been with the company for 10 years.

All these wholesalers supplied 4, retail accounts including department stores, furniture aain, and floor covering specialty stores. The wholesalers also responsible in maintaining extensive sales organization with retail accounts in order to ensure to keep a close relationship with them.

Besides that, the wholesalers also had a lot of experiences in the industry thus Cardon Carpet Mills did not have to struggle to maintain the business and sustain in the industry.

Thus, what Cardon Carpet Mills need to do is to maintain a good long-term relationship with its wholesalers. Expand the business throughout the United States. Besides concentrated its business in residential segment, Cardon Carpet Mills also have an account in contract sales to institutions and businesses. The contract sales contributed about 28 percent of company sales and occur primarily in tranzwctionala southeastern United States. In fact, the company also had no export sales.

If the company intends to enhance its total sales and profit margin, they should consider expanding tranzactiionala market shares in contract sales segment throughout United States. Thus, the company should take this advantage by selling its products of contract sales segment to all these areas. This is due to that the companys wholesalers will provide The recommendation suggested to Masterton Carpet Mills, Inc.

This recommendation would allow Masterton Carpet Mills, Inc. This alternative would also afford Masterton Carpet Mills, Inc. Given recent developments within the floorcovering industry, Masterton Trranzactionala Mills, Inc.

Facts and Underlying Issues: Masterton Carpet Mills, Inc.

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InMasterton Carpet Mills, Inc. They currently directly distribute their contract sales to institutions and business. Wholesale and retail distribution in hranzactionala U. There were three major competitive trends within the industry.

The first trend occurred in the mids when the larger carpet and rug manufactures began to eliminate the margins paid to wholesalers by bypassing them and selling directly to retailers. Smaller manufacturers continued their use of wholesalers because of their lack of capital. Bya majority of the residential carpet and rug sales for residential use were distributed through company distribution centers to retailers, altering the industry.

The second trend occurred in the early s with the emergence of the retail buying group. They combined their purchases in order to obtain quantity discounts from manufacturers. The last change took place when Shaw Industries, the carpet and teanzactionala industry leader, began to open and operate its own retail stores and commercial dealer network.

This action led to Teanzactionala Industries being dropped by stores such as Home Depot and several buying groups. Four years later Shaw sold its retail stores and was again found in Home Depot. They represent one third of the companys residential segment sales.

Upon news of Mastertons investigation into the possibility of directly distributing to retailers, a analizz threatened Suzanne Goldman with the mass exodus of all wholesalers upon the opening of cardn first company warehouse.