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Situational Analysis

Lupita Ventura is the owner of West Side Furniture and has been running the store for the last ten years in the outskirts of a growing city of 275,000 people.  The target market for her store is blue-collar workers, so the store emphasizes in the middle and lower priced furniture.  She has grown her sales up to $3.5 million a year, but she has stayed at $3.5 million for the last two years and is worried she might have reached her limit.  After taking a look at the SWOT analysis for her business Lupita now knows the strengths, weaknesses, opportunities, and threats of West Side Furniture.

1)      Internal Strengths

  • Strong advertising that is bringing her target market into her store.
  • Knowledgeable salespeople.
  • Her target market makes sense for the community where the store is located which is a factory city.

2)      Internal  Weaknesses

  • Customers come to the store and look around but leave without buying anything.
  • The salespeople are not as aggressive in closing sales as Lupita thinks they should be.
  • Even after she tells her sales staff to be more aggressive in closing sales they don’t listen to her, which shows that her salespeople don’t respect her like they should.

3)      External Opportunities

  • There are more target groups that she can attract.
  • Bring on a new sales staff that will both listen to her and be more aggressive in closing sales.

4)      External Threats

  • Furniture sales in the community around the store are continuing to increase but West Side Furniture’s sales are staying constant.
  • More people are moving in so the demographics of the community are always changing.

Another thing that Lupita looked at when she analyzed her business was the four P’s of marketing product, price, place, and promotion.  The following list is what Lupita discovered for her business:

1)      Product

  • She offers the lower to middle priced furniture
  • The salespeople assist the customers and answer all of their questions

2)      Price

  • Her products are priced for her target market of blue-collar workers, so they are on the lower to middle price range

3)      Place

  • She is advertising on cable TV and also in the local newspaper
  • Her store is located in the outskirts of the city

4)      Promotion

  • She has ten sales people in her store
  • She advertises on cable TV and in the local newspaper
  • Her objectives for her salespeople are to treat people on an individual basis and decide what help that customer needs because it is different for each customer.

Problem

West Side Furniture has not been able to have sales of over $3.5 million in the last two years after continuous growth over the previous eight years even after advertising on cable TV and in the newspaper.

Recommendations

I have four recommendations to help Lupita to better manage West Side Furniture and increase her sales to above $3.5 Million.

1.      She should pay her salespeople a smaller salary and more on commission on the sales that they make.

2.      She should expand the target market to include upper priced furniture.

3.      The salespeople should be more aggressive and helpful to the customers.

4.      She should hire one new salesperson to let the rest of the staff know that she is serious about getting results.  She should also let them know if their sales don’t improve then they will be fired.

Rational

The rational for my first recommendation deals with one of the internal weaknesses talked about earlier that people who come into the store but don’t end up buying anything.  If you pay your salespeople based on how much they sell it will encourage them make more sales and not let people leave without buying something.  The second recommendation will help with the external threat that Lupita noticed that the total number of sales in the furniture industry is increasing but her numbers weren’t.  When you can’t expand anymore in the market you are in it is best to expand into other markets where there are more opportunities.  She needs to expand her target market to attract new and different people into her store.  The third recommendation will also help with the internal weakness of customers leaving without buying anything.  If your salespeople are more aggressive they will end up making more sales and less people will end up leaving to buy from other stores.  The last recordation is because your salespeople are not listening to what you have to say, so you need to show them that you are in charge and they have to listen to you.  If you threaten your employees and show them you are not afraid to hire in new people then they will start to listen and do what they are told.  Once they start doing what they are told they will start making more sales and your internal weakness will again be solved.

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2 Comments

  1. Great blog post about your case study! It was very informational. I would suggest a little more background on the actual case itself, and a little more in depth S.W.O.T Analysis. Overall, this is very good work!

    • Thanks for the incite I will definitely look into that. I know it’s not done and it’s helpful to get an outside opinion.


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