Case Study Analysis (Hayes- Dana Limited Automotive Aftermarket) Submitted By: Ashish Mittal (M-11-03) Mohit Pandey

(M-11-09) Ans 1: There are mainly three available options are mentioned in the case: Sales $ Jobber Buys direct at extra 20% off $240000 42 144 Buying gro up member buys direct at extra 10% off $240000 35 150 Jobber buys through warehouse distributor $240000 30 171

Sales $ % Gross Profit % ROI

Yes Mr. Moore should accept the offer of Mr. Peterson offer because: He alleged that his members were the strongest jobbers in the region and held a very large proportion of the aftermarket business. They were giving an extra discount which can be utilized for hiring more sales reps as their 32 warehouse distributor were not performing up to the market and performing inadequate job and Mr Moores group plan was to build a central warehouse within rwo years which will help in handling the extra volume. Changes required in Policy Contribution margin were a little high at 40%. It should be lowered down to create a price competiveness in the market which will helps in increasing the sales. There was a need to bring more flexibility in the present policy as it was a little rigid. The discount would be given on the reputation of the WD and it should be different for reputed WD and for newly formed formal buying groups. Policy shoul be such that it will help in mailtaing a long lasting relationships with the WD., They should be free from absorbing new inventory taxes floor and personal taxes Training of local sales force must be the responsibility of the company and not the distributors

 Providing efficient back up service and sales force for performance

Ans 2: Mr. Moore should implement the change in the following way: He should have started giving extra discounts on the basis of WD performance. If anyone is not performing up to the mark than it should not be liable for any discount until and that particular WD start performing again. Start welcoming newly formed formal buying groups as they were new and innovative and have more willing to do hard work to establish themselves in the market. Build a central warehouse from which it will be easy to maintain the whole supply chain and make it more efficient. This would also helps in reducing the cost as well as attaining the economies of scale.

Ans3: Other options he should consider are: Try to optimize the overall supply chain with the help of a central warehouse. Use all the point of sale data through MIS and then analyse it so that to reduce the inventory cost, acquiring optimal shelf space, and to reduce the carrying cost. Try to build more sales force which will ultimately increase their and helps them to penetrate more in the existing competitive market. It will give them an upper edge compare to others. It can be done by a slight decrease in contribution margin. They can also conduct a feasible study to know exactly the cost of transition from old rigid policies to more flexible and market oriented policies. It should include the cost of increased sales force, cost of distributing new warehouses, intangible cost of lost realtons with old WD or making a new relationship with any new formal buying group.