General Electric (GE) Appliances Case Study :: Business Management Analysis

Abstract The newly appointed district sales manager, Larry Barr, faces the problem of allocating sales quotas among his various sales representatives. This decision will affect everyone's earnings including his own. This problem is compounded by the fact that different territories have, for a variety of reasons, different potentials. In addition, the territory that is known to be the toughest will soon require a new sales rep. Company History/Background Canadian Appliance Manufacturing Co. Ltd (CAMCO) was created in 1998 under the joint ownership of Canadian General Electric Ltd. and General Steel Wares Ltd. (G.S.W.). CAMCO purchased the production facilities of Westinghouse Canada Ltd. under which the brand name White-Westinghouse was created. Appliances manufactured by CAMCO in the former Westinghouse plant were branded Hotpoint. G.E., G.S.W., and Hotpoint major appliance plants became divisions of CAMCO. These divisions were operated independently, had their own separate management staff and competed for sales although they were all ultimately accountable to CAMCO. Larry Barr has recently been promoted to the district sales manager position for G.E. Appliances. One of his more important duties was the allocation of his district sales quota among his five salesmen. He received his 2002 quota in October 2001 at which time his immediate task was to determine an equitable allocation of that quota. This was important because the company’s incentive pay plan was based on the salesmen’s attainment of quota and a portion of his remuneration was based on the degree to which his sales force met their quotas. The five territories were: Territory Destination/Sales Person Description 9961 Greater Vancouver Hudson's Bay, Firestone, Kmart, McDonald Garth Rizzuto Supply, plus seven independent dealers 9962 Interior All customers from Quesnel to Nelson, Dan Seguin including contract sales (50 Customers) 9963 Coastal Eatons, Woodwards, plus Vancouver Island Ken Block north of Duncan and upper Fraser Valley (east of Clearbrook) (20 customers) 9964 Independent and Northern All independents in lower mainland and Fred Speck South Vancouver Island, plus northern B.C. and Yujon (30 customers) 9967 Contract Contract sales Vancouver, Victoria All contract Jim Wiste sales outside 9962 (50-60 customers) The sales incentive plan was a critical part of G.E.’s sales force plan. Each salesman had a portion of his earnings dependent on his performance with respect to quota as well as Barr being awarded a bonus based on the sales performance of his district.