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West Lake

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Submitted By koolsasi2k6
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Case Analysis on

WEST LAKE HOME FURNISHINGS LTD.

A report submitted to

Professor Swatantra

In partial fulfillment of the requirements of the course of

Written Analysis and Communication

On
December 24, 2011

By
Sasikumar parupalli

2011PGP853
(Section E)

INDIAN INSTITUTE OF MANAGEMENT
INDORE

Executive Summary

Charles Bowman, the CEO of West Lake Home Furnishings LTD came across a proposal of reducing the retail price of a signature line of decorative lamps from $69.99 to @29.99 for a period of one year. This customer has a large U.S based retail chain accounted for one-third of West Lake’s wholesale business in 2006. He also assured for providing prominent shelf space to their product.
West Lake Home Furnishings LTD is intending to stay at top of its business and is very eager to grow. After analysing the benefits like increase in profit, growth of sales, market penetration, effect of reduced price on other businesses and the rapport with the wholesaler, it has been decided to accept the offer. Large and promised order for a year is the justification for accepting the reduced price in the offer.

Problem Statement:
To take a decision on “whether to accept the proposal or to reject it”.

Evaluation Criteria * Increase in Profits * Growth in Sales * Market penetration & Market Share * Effect of price reduction on other customer’s retail pricing * Maintaining good rapport with the wholesale customer

Evaluation of Options:
Rejection of the proposal An immediate growth in sales cannot be achieved after rejecting the proposal. The growth in the retail store will follow a steady trend. In the retail sector, profits can be increased by hiring a sales consultant. Similarly, by improving the marketing strategy & internet sales profits can be increased.
Market penetration will be following normal

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