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Beauty Company

Essay by   •  June 11, 2012  •  Essay  •  269 Words (2 Pages)  •  1,008 Views

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The market share has a general decreasing trend, and every district has an increase in sales figure but district 4. In which district 4 has a decline in sales growth, and it's perceived to be due to the sales ineffectiveness: 97.35 only. However, district 4 has the highest gross margin out of all; by at least $1500 and it which is perceived to the reason of the decline in their growth rate. As well as district 1 has relatively ROAM figure; and it is believed to be the impact of the poor sale. District 2 has the highest lodging out of all districts, with no significant number of salespeople, which would suggest the managers to look into it; perhaps it is due to the large region which requires the salespeople to travel more often.

It appears that district 1 has too much stock on hand, their asset turnover rate is way too high; which would increase the risk and the cost of storing inventory. Also, district 4 has the highest selling cost, as they have the most number of salespeople out of all five districts. And, they still have the negative sales growth rate. Thus, it is suggested for Beauty Glow's to look into the district's environment in order to configure the reasons behind the sales decline. From the analysis, its deemed to be the cost of the price as they have the highest gross margin. Therefore, the potential solution might be to reduce of their COGS. Perhaps district 4 can merge into another district in order to maximize the productivity with less number of salespeople (less salary expenses).

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