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SOSLP

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
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I am submitting this report for your consideration and necessary action. Matworks request by keeping in mind various factors like customer relationship. 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. I will be glad to seek any further clarification regarding the analysis. The report consists of industry analysis. customer expectations. Page | 2 . I have prepared a detailed report highlighting the implications for each possible course of action. I hope you find the report satisfactory & in tune with your requirements.SOSLP Southwestern Ohio Steel LP Hamilton. Ohio March 24th. This is followed by an analysis of options & recommendations based on the evaluation of options. I have tried to address both the short term & long term problem. company’s image. etc.

SOSLP Executive Summary We. as our company doesn’t spend large amount on any type of promotional activity. Southwestern Ohio Steel is faced with a request from Matworks . After analysing various factors such as cost. company policy. 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. This request comes as a total surprise for us. one of our oldest & most valued customers requesting us to sponsor any event of their annual sales meet. Word Count: 105 Page | 3 .

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

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

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). Therefore if we decide to sponsor an event we Page | 6 .

There won’t be any chance Page | 7 c. by sponsoring their event. By doing this we let our customers know that we are not only sponsoring an event but we see a business opportunity as well. There two main reasons for sponsoring an event in Matworks. d. As our company earns a profit of $20160(refer exhibit 2) from Matworks annually. We are considered as industry leader. e. To increase our sales and promote ourselves against our competitors certain promotional activity will be needed. . Therefore altering the company policy in the interest of the company will be beneficial.There are chances of Matworks planning for future reformations hence they have arranged such a grand event to enhance their corporate image. 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. In a way we can also maintain a view that.SOSLP will have to incur a minimum expense of $5000(Golf tournament).Secondly. 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. if Matworks is actually facing problems. Future Sponsorships: If we sponsor an event for Matworks there are good chances of other companies asking for sponsorship in future.Firstly. we could have a possible share in their future prospects thereby we could earn future benefits. 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. Therefore. 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.

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

of 1/100=0.SOSLP chances of our sales getting increased.e. but by sponsoring this event we can reach out large number of people and also improve our corporate image. • We can invite the executives of four subsidiaries to attend the event.000 Exhibit 2. Word Count: 976 words.Calculation of Profit from Sales to Matworks Page | 9 . • We need to change our advertising policy so that we can spend more on advertising to increase our customers and improve the brand image.Calculation of advertising expenses annually Particulars Sales (Annual) Percentage (Advertisement sales) Explanation Amount $ 250 Million 1 one hundredth i.01/100 * 250 million $ 25. we reach out very limited number of people. Action Plan: • Sponsor the event by paying a minimum amount of $5000. • We should look to improve our sales after the event as we will be having improved brand image in the market. If we practise our usual advertising policy like giving tickets for basketball game. Also our company executives will get an opportunity to have a dialogue with executives of Matworks. Exhibit 1. 0. There by creating awareness of their product as well.01% i.e.

Linda Lewis. To. Matworks.Pendleton regarding the sponsorship in the annual sales meeting of Matworks. Southwestern Ohio Steel LP (SOSLP) Hamilton. 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. Page | 10 . 1994. We are sponsoring the Golf Tournament. Ohio March 25th. Inc.SOSLP Particulars Sales(for 1993) Profit Margin(3% of sales) Explanations Amount $ 672000 3/100*672000 $20. Cincinnati Dear Ms Linda. Director of Communications.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. Ms. Subject: Regarding Sponsorship at Matworks annual sales meeting This is with reference to the letter we had received on 18th march from Joseph P. 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.

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