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By: Ishan Abrol

Akanksha Goel Yuvraj Aggarwal AR Ravishankar

Introduction
Melita Sanchez is owner of Growth Enterprise
B.S graduate in business. One year cell phones sale experience.

Sales representative for software producer.


Accto Company, Saleco Inc and Invo Inc. Working at 60% of her capacity. Looking to take up new lines.

Current Job Responsibility


Call on possible customer.
Fax license copy to respective producer, once the sale is

made. Producer then UPS the programs directly to the customer. Alternatively provide a key code for a website download. Producer then bills the customer.

Current Job Responsibility


Melita receives 5-10% commission on sale.
She pays her own expenses. Producers handles users queries.

Offers at hand
Local Software Company Job requires to sale network security product. Software tracks keystrokes and mouse clicks. Annual sales of about $150,000. 2% commission on annual sales.

Offers at hand
Metclean Is a small manufacturer. Produces solvents used to make coating for metal products. Facing intense competition. Last year sales were $500,000. Can handle four times growth.

Offers at hand
Metclean Complete marketing effort is desired. Handle pricing, advertising and sales effort. May travel 200 miles around Columbus. 12% commission on sales.

Sales
For the year 2003 Company Accto software Saleco software Invo software Total Commission Sales $250,000 $100,000 $200,000 Percentage Commission 10% 10% 5% Commission $250,00 $100,00 $100,00 $450,00

Options before Melita :


A. Continue with Growth Enterprise , with more efforts

to tap more from it. B. Accept the offer of Metclean at the opportunity cost of giving up her own firm. C. Keep both options alive by doing some trade-offs between them

Option A) Continue with Growth Enterprises


SOFTWARE Accto Software Saleco Software Invo Software % COMMISSION 10% on $250,000 10% on $100,000 5% on $200,000 AMOUNT $25000 $10000 $10000

TOTAL @ 60% capacity $45,000

If she works @100% capacity then $75,000 Make a cut of 3% for her expenses, involving setting up a small

office space for calling, she can earn $72,750 (assumption) We have not included additional income of $3000 by selling security software on grounds of her moral and ethical standards.

12% commission
ANNUAL SALES $500,000 2X the current sales COMMISSION AMOUNT $60000 $120,000

: :
4X the current sales

: :
$240,000

But achieving 4X sales with just the efforts of Melita is highly

unlikely in a short span So, taking $60000 as an optimistic figure and making a cut of 12% for expenses, involving travelling etc., she can earn $56,400 (assumption)

Accepting Metclean Offer


Pros:
Highly attractive % Can get huge returns if

Cons:
Giving up well established

turned to be a hit Challenging Job profile Can gain insight into a new industry

existing set up for a risky option Highly demanding Lack of product and industry knowledge Lose of independence Shift from Non Competitive environment to a competitive one

Continue with A and ask Metclean to let her carry the

agent work at sales commission of 2-5% Can earn $45,000+ extra