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Flame School Of Business – 1st Year Written Analysis and Communication 1 Assignment – 2 Decision Report on Matworks Regarding Sponsorship Submitted to Prof. Mukul Vasavada

DATE : 14/10/2009
Page | 1

I am submitting this report for your consideration and necessary action. The report consists of industry analysis. I hope you find the report satisfactory & in tune with your requirements.SOSLP Southwestern Ohio Steel LP Hamilton. I will be glad to seek any further clarification regarding the analysis. 1994 To Dan Wilson Vice President (Sales) Southwestern Ohio Steel From Jack Deputy Vice President (Sales) Southwestern Ohio Steel Subject: Decision report on letter from Matworks which requests sponsorship Please find attached the decision report on Matworks. customer expectations. Page | 2 . Ohio March 24th. I have tried to address both the short term & long term problem. Matworks request by keeping in mind various factors like customer relationship. company’s image. etc. I have prepared a detailed report highlighting the implications for each possible course of action. This is followed by an analysis of options & recommendations based on the evaluation of options.

as our company doesn’t spend large amount on any type of promotional activity.SOSLP Executive Summary We. Word Count: 105 Page | 3 . customer relationship & corporate image & also keeping in mind the short & long term point of view it is recommended that SOSLP should sponsor the event with minimum sponsorship as our long term relationship with Matworks can be well maintained. one of our oldest & most valued customers requesting us to sponsor any event of their annual sales meet. company policy. After analysing various factors such as cost. Southwestern Ohio Steel is faced with a request from Matworks . This request comes as a total surprise for us.

Recommendations 7. Evaluation of Options 6.SOSLP TABLE OF CONTENTS Topics Page No 5 6 6 6 6-8 8 9 9-10 1. Criteria For Evaluation 4. Action Plan 8. Exhibits Page | 4 . Problem Statement 3. Options 5. Situation Analysis 2.

Page | 5 . and prided itself on providing state-of-theart services to add value to the channel. but as a supplier. Various factors like the company policy. in addition to deploying a tactical solution to the present situation. SOSLP has to decide whether to sponsor or not to sponsor an event of Matworks. Now. The company generally doesn’t spend large amounts on any type of promotional activity and especially not on individual customers.000 to $30. We should also evolve a strategy to take care of potential problems that can arise in the future. the company had never done business in this way. The cost of the sponsorship would be anywhere from $5. as a major supplier. The customer was large and serious about Southwestern's participation. has been considered to arrive at the decision. We have recently received a letter from a large and long-time customer asking that.SOSLP Situation Analysis: SOSLP has a history of developing strong relationships with mills and customers. Southwestern Ohio Steel contribute to the Matworks annual sales meeting by sponsoring an event. For the company. the concept of partnership with customers is very important. the long standing relationship etc.000.

Therefore if we decide to sponsor an event we Page | 6 . Not to sponsor an event Evaluation of Options: 1. To sponsor an event B.SOSLP Problem Statement: Should we sponsor the event at Matworks Annual sales meet or not? Criteria for Evaluation: • Cost to the company • Company’s policy • Business relationships • Future sponsorship • Corporate image Options: A. To sponsor the event a. Cost to the Company: The annual expenditure of our company for advertising and other promotional activity is $25000 annually (refer exhibit 1).

SOSLP will have to incur a minimum expense of $5000(Golf tournament). We are considered as industry leader. we could have a possible share in their future prospects thereby we could earn future benefits. if Matworks is actually facing problems. In a way we can also maintain a view that. As our company earns a profit of $20160(refer exhibit 2) from Matworks annually. To increase our sales and promote ourselves against our competitors certain promotional activity will be needed. Corporate Image: If we sponsor the event in Matworks we get to improve our business relationships with them and it shows that we support their morale in there bad times. There won’t be any chance Page | 7 c. then by sponsoring the event we can show the company and other customers that we stand by our customers when they are facing hard times. There two main reasons for sponsoring an event in Matworks. Future Sponsorships: If we sponsor an event for Matworks there are good chances of other companies asking for sponsorship in future. .Secondly.Firstly. sponsoring an event with minimum amount should be feasible b. Thus sponsoring an event with minimum of $5000 is preferable Business Relationships: By sponsoring an event in Matworks annual sales meet we get an opportunity to improve our relationship bond with Matworks and it also shows the way we value one of our oldest and long term customers. Therefore altering the company policy in the interest of the company will be beneficial. e. for us relationship with customer matters the most rather taking advantage of the situation to make quick bucks. Company’s Policy: The Company doesn’t spend large amount on any type of advertising or promotional activity. by sponsoring their event. d.There are chances of Matworks planning for future reformations hence they have arranged such a grand event to enhance their corporate image. By doing this we let our customers know that we are not only sponsoring an event but we see a business opportunity as well. Therefore.

Business Relationships: Matworks being our important customer. If we sponsor this event we see a bright future with Matworks and there are great Page | 8 . We can stick to our earlier policy of low advertising expenses. c. Hence the Corporate Image will be maintained and our goodwill will increase. Recommendation: It is recommended that SOSLP sponsor the event with minimum sponsorship of $5000(golf tournament). Cost to the Company: If we don’t sponsor any event in matworks annual sales meet then we would be saving a minimum amount of $5000 which can be used by the company for future purpose. So indirectly it will be affecting our company’s image in the market. there are good chances of our relationship getting hampered with the company.The amount can be paid from the company’s profits. We may lose a very important customer in future. b. but there are chances that our competitors might use the opportunity to break into our account. Company’s Policy: The Company’s policy will not be altered if we don’t sponsor. Corporate Image: Company may face difficulty in forecasting the future demand as there could be a possibility of losing Matworks as our customer. Future Sponsorships: If we don’t sponsor the event now there are very less chances of other customers asking for sponsorship in future. 2.SOSLP of bad publicity if we don’t sponsor the event. e. Not to Sponsor the Event: a. d.

Calculation of advertising expenses annually Particulars Sales (Annual) Percentage (Advertisement sales) Explanation Amount $ 250 Million 1 one hundredth i.SOSLP chances of our sales getting increased. 0.e. Word Count: 976 words.Calculation of Profit from Sales to Matworks Page | 9 . Action Plan: • Sponsor the event by paying a minimum amount of $5000.01% i. Exhibit 1. of 1/100=0. Also our company executives will get an opportunity to have a dialogue with executives of Matworks. but by sponsoring this event we can reach out large number of people and also improve our corporate image.000 Exhibit 2. we reach out very limited number of people. • We can invite the executives of four subsidiaries to attend the event. • We need to change our advertising policy so that we can spend more on advertising to increase our customers and improve the brand image.01/100 * 250 million $ 25. If we practise our usual advertising policy like giving tickets for basketball game. There by creating awareness of their product as well. • We should look to improve our sales after the event as we will be having improved brand image in the market.e.

Page | 10 . To. just to assure that SOSLP is committed to its customers and the SOSLP-Matworks business relationship will improve and is beneficial for both of us. I would be pleased to inform you that we are ready to take this surprise and sponsor the Golf Tournament by changing our company’s policy. Linda Lewis. Director of Communications. Southwestern Ohio Steel LP (SOSLP) Hamilton. 1994. We are sponsoring the Golf Tournament. Inc.SOSLP Particulars Sales(for 1993) Profit Margin(3% of sales) Explanations Amount $ 672000 3/100*672000 $20.160 Exhibit 3 – Sample Letter to Linda Lewis From.The idea of organising such a grand event is greatly appreciated and sponsorship offer really came as a surprise to us. Ohio March 25th. Subject: Regarding Sponsorship at Matworks annual sales meeting This is with reference to the letter we had received on 18th march from Joseph P. Matworks. Ms.Pendleton regarding the sponsorship in the annual sales meeting of Matworks. Cincinnati Dear Ms Linda.

SOSLP Yours Faithfully. Dan Wilson Vice President (sales) SOSLP Page | 11 .

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