Presented by: Group 3 Abhishek Birmaan Mayank Jain Rajesh Agarwal Saket Agarwal

• The centerpiece of this growth strategy is the National Accounts program. . Inc.Introduction • Jim Piraino. VP of marketing for WESCO Distribution. • However. as of June 1997. which WESCO has developed to serve its major industrial.. the NA program has not delivered the expected increases in sales and profitability. is preparing for a yearly review meeting with WESCO CEO Roy Haley • Haley wants the firm to reach annual growth goals of 6% to 8% in revenues and 12% to 16% in profitability over the next five years.

like WESCO.Need for NA program • Large industrial customers are demanding it. and they are important to WESCO • It offers national distributors. an opportunity to create a unique and sustainable competitive advantage with its customers and suppliers • Roy Haley sees it as an opportunity to increase the scope of WESCO's business with each of its major customers • WESCO needs it to meet Haley's ambitious growth plans. .

Problem faced with the NA program • Vendors are learning the hard way that not all of their customers are interested in getting into these agreements • Customers who get into such agreements are only interested in getting lower prices • Customers are not willing (or not able) to work with the vendor in a mutually beneficial mode .

improve our margins. Taking a reactive stance could cause us to lose out on the business of potential key customers being pursued by our competition. Actively pursuing customers improves our chances of becoming a first-tier supplier to our customers. Key NA customers allow us the best margins when including costs to serve in the calculation.Proactive approach to NA • • • • • • • • Haley's aggressive growth plans for WESCO depend upon substantially increased revenue from the NA program. . The NA program has a lot to offer customers in heavy process industries Larger and more predictable orders are more economical for suppliers and allow WESCO to obtain better prices. which should. Being proactive gives us more control over the profile of the customers we choose to work with. in turn. We need to get as many customers as we can to sign on. Consolidation in the EES industry has made competition fiercer. Key NA customers can ramp up revenues very quickly.

If the prospecting and selling phases of the NA process could be cut substantially. • • . In the middle stages. the costs to serve are very high. Piraino—Strong individual partnerships have brought us to where we are now and they may even be able to keep us going for some time. The selling process could be directed at consultants in order to increase demand for the program. Including only those customers who demonstrate a strong interest in the NA program will improve the return on WESCO’s investments in the early stages of the program. The NA program is pitched to headquarters.Reactive approach to NA • • • • The NA program is only highly profitable when fully implemented. Pushing the NA program could alienate contractor customers by ignoring them or even competing against them. NAMs would have more time to work on implementation and maintenance. Local branches uninterested in the corporate bottom line can sink implementation.

52)52 = 15.6 (213.6 (33.6 .34)34 = -1.6 -180)180 = 18.2 % .Sales forecasted for the year 1997 • Key : 89*12/5 = 213.4% • Other : 14*12/5 = 33.7% • Focus : 25 * 12/5 = 60 (60 .

.Suppliers and customers • Suppliers: WESCO allows EES suppliers to sell to customers too small to purchase directly from them. WESCO increases the probability of a good product-customer fit by helping the customer to find the product that most exactly fits their requirements. By offering customers products from numerous EES suppliers.

Why NA program not delivering the result? • WESCO needs to be more selective in choosing NA prospects. . Implementation should be easier when customers are chosen in part on the basis of how easy or difficult it would be to implement an NA program with them. WESCO needs to ensure proper implementation. the process needs to be streamlined and responsibility reapportioned. • After having chosen the right customer. Currently. WESCO does not have a process for segmenting its customer base. It has tried to use a shotgun approach to select customers as partners in its NA program. Nevertheless.

WESCO can offer customers a one-stop solution to their EES needs that allows them to purchase the products they want from EES suppliers of their choice. .• Customers: WESCO adds value to its customers both in general and in the particular features of the services it provides. in volumes appropriate to their size. As a distributor.

and 8 other NA customers per NAM. • 50 key customers. and 150 other N customers. This works out to an average of slightly und three key customers. 100 focus customers.• WESCO currently has 18 NAMs managing an NA program that involves. • Stage Prospecting Active Selling Implementation Maintenan • NAM Flexible 30-40% up to 50% 15%+ • Time Varies 6-9 months 2-3 months Indefinite frame Is NAM Capacity an issue? . 6 focus.

• WESCO can develop good relationships with consultants and gain access to their customers. The reality. especially those that focus on re-engineering and supply chain management initiatives. might view WESCO as a competitor rather than as a collaborator. . However. however. this information can be used by WESCO to segment customers.Things Wesco can do • WESCO cannot control a customer's purchase profile. WESCO should selectively pursue customers whose profile looks like that of the customer in case Exhibit 16. is that CEOs might not be interested or have the time to get into looking at cost savings from light bulbs and switches. • WESCO can work with the customer's senior management and convince them about the benefits of the NA program. The issue here is that consultants.

• It is possible that WESCO could use a segmentation process to find a group of 28 new customers who come close to fitting the ideal profile for an NA customer and whose total EES purchases fall between $12 and $15 million per customer per year .Recommendation • One way to handle the NAM capacity issue is to hire executives to take over some or all of the maintenance functions that the NAMs currently do. • Changing the growth profile of the NA program becomes a key factor in achieving success.


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