Atomic Company Case Analysis
The Current Situation and Key Issue
Currently, the management team of Atomic Company is facing a problem which is cause by the boom of Tiger pants’ sales. This situation involves many problems that the management team should think about. First of all, the demand of the Tiger pants has dramatically growth. Thus, there are not enough stock for the retailer to sale to customers. However, they cannot sign the long-run contract with the manufacture because they do not have forecast for the sales of Tiger pants. They need to consider if the Tiger pants is just a fad, what their next step is. Otherwise, the company will lost a lot of profit. Second, the company provides 15% of sales to the three independent reps as the commission. This commission structure has become a problem because the sales of Tiger pants are way higher than their expected. Hence, the company had paid one million for the three independent reps as the commission in 2001. Moreover, the three reps already pulled in $852,000 in commission only for the first quarter in 2002. This is a weakness of Atomic because if they could save the bid bucks of commission, they can have more budgets to expand its company. The key issue for this company would be how the management team might do to maintain the sales level, and deal with the problem caused by the commission structure.
Alternative Courses of Action
A. To recruit a new professional sales team, and make the current independent sales reps to sell other Atomic clothing line such as the men’s casual clothing. Atomic company did not have budget to have an internal sales team before. However, Atomic has the financial strength now since the popularity of Tiger pants helps this company to make a lot of profit. Thus, hiring new sales team with generous compensation package may help Atomic to reduce the expense of independent reps’ high commission. B. To separate their current product lines into two segments in order...
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