Essay About Mgr Chicago Sales Div And Boardprice Millman

Aitchson Corpo Case Study
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TermSessionCourse/ThemeCaseWhoWhenWhereCase Leads/Due Date21LACCThe Atchison CorpJerry Atchison – previous CEO now on boardPrice Millman – new CEO (Case A)John Day – Mgr Chicago Sales Div (Case B)Amory Hanks – previous board member (Case C)January 1994St. LouisAhsan R. / Svetlana A.What – Situation/Issues/Risks/ DecisionRecord gross sales and lowest profit (% of sales)Retirement of CEO Jerome AtchisonIn Dec 2014, Investment Inc. assumed a controlling position of the firm and Price Millman was brought in as a CEOPrice bringing “fight until you die” philosophyCase B & CEmployee morale is down however profits upShould Millman continue to fire up the battle-ground or ease up?What do they do?Manufacturer and distributor of consumer products in Canada, US, and European (export) marketsHistory of Company?Founded in 1948Ethical family firm founded on the principles of Bible, fair play and integrityIn 1970, firm name changes and share ownership was opened to other familiesBy 1990s, all families owned < 5% of o/s sharesIn Dec 1993, a new investment company took majority controlPEST (political, economic, social, technological) (External)SWOTCompetitorsCompany Business ModelP - Political evaluationE - Economic evaluationS - Internal strengths.High quality at low costLow turnover“We take care of our family” notionExperienced mgmt (40+ years of service)W - Internal weaknessesConservative compensations & no bonus plansFalling behind competitionSafe organization hesitant in taking risksNo mandatory retirementMinimal marketing $Who are competitors?  Possible unforeseen new entrants?3 major competitors outpaced AtchisonA marketing group (competitor) doubled sales and profits in the last 5 yearsCompetitor’s aggressive & stealing market share.Evaluate the business model.  “Murray Bryant” style.4 regional plants located close to raw materials and distribution centres in key North American citiesStructurally – 8 major divisions 7 Regional sales and 1 central manufacturing division. Sales force sells to retail outlets – primarily supermarketsSales people were working under corporate policies with little control over prices.S - Social evaluationT - Tech evaluationO - Ext opportunitiesManagement structure overhaul neededT - External threatsCompetitive pressuresMarketing AnalysisMarketing StrategyTarget MarketNA and European MarketsDifferentiationQuality with low pricePositionCredible brand name with family historyValue PropositionProductConsumer Products Price Low cost producersPlace / Sales ForceSales force organized regionally under sales divisionLow salaries PromotionFinancialsOptions & EvaluationRevenues / costs / EBITDA / trends / RatiosAlternatives to what is presented in the case?  What are the lead options for characters?Reduce / Increase / Eliminate / CreateRecommendation & RationaleAction / ImplementationSuccinct next steps.  Further studies and hiring consultants don’t count.What immediate next steps need to be taken?Key Learnings & Why is this importantTakeaways from the case.   Critical points to raise in class discussion.QuestionsCompare the pre-Millman and post-Millman Atchison organization?Pre-Millman (CASE A)A safe and conservative company losing its grip on the market to competitors due to a wide variety of issues. Atchison’s primary sales force is compensated lower than the industry. They have no incentive to perform better – lifersTenured employees past the typical retirement age are stalling the progress of the company. No new product development has taken place as a testament to old management style. No one can be fired unless an ethical reason!!Centralized structure with little leeway to change prices to respond to local demand. HO also sets quotas on salesCentralized accounting with quarterly reports do not show trends across the plantsGood employee assistance and educational program benefitsSales’ increasing but bottom line is suffering.Post-Millman (CASE B)Profits have turned around in the company but 3 out of 7 division managers left the company and dozen first line & middle mgrs.Corporate Vietnam reference – fierce and aggressive internal culture promotedBest get promoted with plant capital investments while earning bonuses of 25% - 100% of salary and rest get canned. Company is gradually losing its heritage of integrity and fair play.Organize the company in lots of profit centres. Each unit gets measure on sales and perf and expense itemsMonthly reporting of each profit centre to track progress.What if anything, would you change in the present Atchison organization to counter Day’s concerns re: morale, turnover, stolen sales, firing, lack of cooperation and refusal to take back poor merchandise?The turnover issue is real however much of it was needed. A thorough management shake-up was required to send the message that performance is the only determinant of one’s future with the company. Millman has been very effective in turning around the company in just one year however minor tweaks are now needed to preserve the corporate culture and retain top talent.Turnover can be solved by giving stock options to profit centre managers so they now become invested in the growth of the company. Educational subsidies talked about in Case A were missing and Millman should consider reinstating a refreshed employee benefit program and offer more than just monetary incentives. Territories should be clearly defined with no ambiguity in solving the issue of stolen sales.Customer satisfaction should be the primary focus of the company and new survey based measures should be introduced to track that element re: poor merchandise etc.To enhance coordination and cooperation among the centres, a corporation wide program should be rolled where the most successful centre will be hosting a two-day seminar at the head-office. Town-hall meetings should be held regularly to disseminate information to all centres on their progress (make it public but not fiercely competitive).Firing decisions should not merely be based on current sales and all managers should be given sufficient time to prove their worth.If you would not change anything in the post-Millman organization, state your reasons and consequences?As indicated above, he needs to soften his stance on a couple of qualitative factors. John’s concerns were valid but it is noted that he is past his retirement change and could potentially be resistant to change. Factors other than monetary compensation should be brought in play. If employee training and advancement is emphasized throughout the corporate culture, it will definitely create a positive working environment and in turn impact profitability.Case Assignment Question & AnswersInsert and answer specific case assignments, but more important that you list the key topics for discussion worth discussing in class.  Profs rarely go through the questions in detail.