AAA Office World (AAA)
I. Key Facts
1. AAA Office World is a manufacturing company making office supplies.
2. Stasia Acosta must decide whether she should permit her largest customer to buy some of AAA’s commonly used file folders under the customer’s brand rather than AAA’s own FILEX brand. 3. If Stasia refuses, this customer BCI will go to another file folder producer and AAA will lose this business. 4. AAA’s refused this proposal twice in the past because of the company policy to avoid one company dependency and not to brand the product by customer name or logo. 5. BCI is a nationwide distributor of office supplies with 150 retail stores accounted for 30% of AAA’s business and its own brand on more
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2. Stasia must decide to allow a production of private label, and this encourages wholesalers/retailers to procure the items from AAA instead of getting their own branded products from different manufacturer. This will produce potential benefits to AAA. 3. The policy should be changed and this impact AAA to acquire more Wholesalers and grow their profit margin by allowing the label. 4. By expanding the distribution channel one single customer doesn’t dominates the market share, and limited distribution channels could affect company’s bottom line.
IV. Recommendations 1. Stasia needs to accept the offer with a condition by locking BCI into a long term contract. 2. By allowing a private label AAA may profit while holding the brand name, and she makes sure the company requesting the label would get for what they paid for across the board without any loyalty to one specific company. 3. The Policy must be changed to attract more customers and less dependency in one customer. In addition, the quality of the product is crucial in a sense that AAA needs to introduce or implement a policy pay for quality per customer provided specification. 4. She must be determining to expand the channels and able to supply to all distributor who are willing to pay for the commodity depends on the quality requirements paid for. And no single entity
The company was recently presented an opportunity by its largest retail customer to significantly increase its share in their private label manufacturing. The prospect of growth was risky, since it
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With a steady business in place, AAA isn’t sure on how to go about with this offer. Stasia Acosta’s main concern, however, comes from the fact that if she declines Business Center’s proposition once again, they may forever lose them as a customer. Furthermore, another turning point would be the sole idea of having a newly formed competitor, essentially created by themselves, who could potentially lower the market price making it a critically devastating move for AAA. Needless to say, with one single customer holding thirty percent of AAA’s sales, making the right decision here is imperative for the long term success of AAA Office World.
b. Does the issue of branded vs. private label enter into this consideration? Why or why not?
The company employs and trains skilled sales personnel to promote its items. Besides, direct sales branches are strategically located in high traffic zones to attract more potential buyers and strengthen revenues. The company manages its supply chain effectively. It produces annual publications of supplier codes of conduct, a move that increases brand recognition. The company enjoys implausible trade name trustworthiness, implying that many people will
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17. To persuade at least 15% of our main competitor’s customer base to switch brands.
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Top managers develop long-range plans, called strategic plans that define the company's overall mission and goals. Strategic planning focuses more on issues that affect the company's future survival and growth. To develop strategic plan, top managers also need information from outside the company, such as economic forecasts, technology trends, competitive threats, governmental issues and shareholder concerns.
As a result we can see that only one of the four above criteria is met and it is a fixed price. Based on these findings we can advise to change WAG’s policy on revenue recognition upon the delivery of the product. This will lower the sales revenue by $50,000, as well as cost of goods sold and net income.
Twenty plus years ago, the terms “private label” or “own brand” were usually synonymous with “cheap knock offs.” These products were viewed as inferior to the national brands and just a low cost alternative for the extremely price conscious. However, in the last 20 years, the paradigm has changed. As major retailers sought ways to expand their brand and entice customers to become loyal to their stores, private label (“PL”) and own brand (“OB”) products became a more viable and significant component of their marketing and brand strategy. However, this came with the caveat that their PL/OB offerings had to meet or exceed the quality of the national brands but at a price point of 10-20% less.
Now we are down to choosing the brand associations. Who will promote and what events or causes will be align our brand with? The focus groups chose Maria Switzer as the spokesperson. They also pointed to two functions of interest, Partner with GreenEco and providing grants to
In addition to increased sales, the company sets out to enhance the number of the overall customer share that they have.
Brand security: This will help in making an impression available about its particular kind of item thus it will get the consideration of its clients prompting them having a upper hand over others.