Case Recap
In spite of being slightly over 60 years old, CUTCOs history reveals that it was formed as a result of mergers and takeovers. Currently, it is a conglomeration of six companies, with ALCAS as the parent holding company. Under this umbrella, are other companies making knives and scissors. ALCAS specialized in manufacturing house cold cutlery items, especially knives.
From their initial range of ten fundamental items, with nine being knife varieties, the company’s product line has grown to over 500 products. They sell at an average range of $27 to $945. The name CUTCO was officially adopted in 2009 after the success of the marketing arm bearing the name. It is the biggest cutlery maker in America, with revenues over $ 200 million (Roger & Robert, 2010).
Problem Identification
The problem CUTCO needs to address is increasing company revenue, having set a five-year target of $500 million per annum. All this, in the backdrop of an investor meeting to be held in a fortnight to explore means of achieve the goal. The main dilemma is identifying and implementing the most strategic of concepts from a list compiled by the CEO John Stitt, since all of them were pertinent.
Case Analysis
It is a combination of six interrelated companies, with four specializing in cutlery and kitchen ware production, and two in charge of oversees marketing ventures. KA-BAR knives manufacture daggers used for sports, mostly knife throwing. It is slightly profitable since most of the sales average $40 to $70 per item. CUTCO manufactures a large percentage of the knives, with the remnants coming from Asia.
In addition to their basic product (knives), the company has introduced garden tools, in addition to varied kitchen tools, to increase their variety. The company has become a market leader, and consequently been featured in a couple of primetime television shows in America.
It has a marketing strategy which entails classifying America into geographical the six geographical regions, which are grouped in threes for easy administration. The Vector East comprises of (Midwest, northeast and east zones) while vector west is made up of (Central, Southwest and West zones). Canada is categorized as a separate entity, with its head accountable to the East zone.
Regional presidents are answerable CUTCO chairman. Each region has 280 permanent offices, with a similar number of temporary administrative centers for summer operations. It is reliant on clandestine contractors to dispense the merchandise, with a majority of sales during the summer time.
This is achieved through practical presentations, where product superiority is determined alongside that of a competing brand (Roger & Robert, 2010). This is the main reason why one of every six products is bought by a previous client. They have employed a direct sales strategy with college students as their primary labor source, a move which has been successful.
Identifying the Root Problem Components
As a result of the fact that most sales personnel employed are in service for single terms only, contact is often lost between the company and clientele. This happens especially where representatives failed to communicate appropriately with the management, and had a poor record keeping habit.
This prompted the executives to initiate mailing order services. These had additional high operational costs as a result of logistics and payment of commissions. The emergence of Internet sales also offers direct competition to their direct sales strategy. The management is also faced with a dilemma on the method of employee recruitment to use.
Evaluation of Alternatives Recommendations
As a result of the ensuing dilemma with relation to a preferred sales mechanism, CUTCO had the option of integrating Internet sales in their methodology. This would spell the end of their direct sales method due to its popularity among many shoppers. It is impressive that they restricted the use of Internet buying to people with a purchase history. All initial employees will be required to do so through an agent.
The melee on the approved computers method of employee recruitment could be disastrous for the company. Their best bet would be using for evaluation and short listing, but all interviews should be conducted in person (Roger & Robert, 2010).
The management is divided on the method of expansion to adopt and time frame for implementation. They have an option of buying an existing company with production capacity due to their financial standing.
The firm can also roll out internal measures to fund expansion and upgrading of the existing facilities (Roger & Robert, 2010). Their best bet would be capturing the international market. The brand‘s achievements in America could be a pointer of the numerous advantages the brand has over competitors.
SWOT Analysis and Conclusion
The company’s main strength is the sales strategy. After several years of practice and perfection, the direct method of sales is synonymous with the brand. It has a low-overhead cost, and allows agents to cover greater areas since they do not carry any luggage. Their greatest weakness is the inability to make conclusive decisions as fast as required.
Too much bureaucracy exists since they are a conglomeration of six firms; hence time is wasted in consensus building (Roger & Robert, 2010). New markets present them with an opportunity to exploit, while online sales pose a substantial threat to their preferred sales method.
Reference
Roger, K. & Robert, P. (2010). Strategic Marketing Problems. New Jersey: Prentice Hall.