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Case 3 3 biomed co ltd designing a new sales compensation plan

This is the amount earned if a sales representative achieves expected performance.

  • Take a small break, grab a cup of coffee or whatever you like, go for a walk or just shoot some hoops;
  • This will help in promoting competition and provide an incentive to the sales force to improve their performance, by achieving or exceeding their desired quotas;
  • Refine the central problem the protagonist is facing in the case and how it relates to the HBR fundamentals on the topic;
  • The criteria to be used are the sales target and the contribution of sales personnel.

We would not like to reduce this in the new compensation plan unless we have sufficient reasons for doing so. This will help in promoting competition and provide an incentive to the sales force to improve their performance, by achieving or exceeding their desired quotas.

We feel that this should not be the case and all sales people meeting the target Sales of THB 2,000,000 should be given a maximum of THB 400 per day, rather than in ascending bands of increasing allowance per day. For those sales people who exceed the Target Sales, they can be given a greater allowance of say, THB 450 per day. In the case of bonus, the existing structure seems to be sufficient and we feel there is no need for it to be changed. Ans Sales and contribution would be the drivers for commission.

Biomed Co., Ltd.: Designing a New Sales Compensation Plan Case Study Analysis & Solution

In order to motivate employees, they need to be compensated based on the sales that they individually generate and their contribution to the profit of the organization. This will ensure that all sales employees will work hard to exceed their targets. Since this is a sales driven business, targets are vital to the role of each sales employee and hence sales and contribution should form an integral part of the compensation structure.

Hence those who significantly exceed the target sales should be compensated or rewarded appropriately. Therefore we would come up with various bands in the commission structure.

The criteria to be used are the sales target and the contribution of sales personnel.

Commission on sales volume Commission rate 0-2,000,000 1. Ans Commission on sales volume Commission Rate 0-2,000,000 1.

  1. Since this is a sales driven business, targets are vital to the role of each sales employee and hence sales and contribution should form an integral part of the compensation structure. You can use this history to draw a growth path and illustrate vision, mission and strategic objectives of the organization.
  2. For those sales people who exceed the Target Sales, they can be given a greater allowance of say, THB 450 per day. You have to recommend business unit level recommendations.
  3. It also provides starting ideas as fundamentals often provide insight into some of the aspects that may not be covered in the business case study itself. Case study solutions can also provide recommendation for the business manager or leader described in the business case study.
  4. Begin slowly - underline the details and sketch out the business case study description map.

We have decided the commission rates taking into account the previous question. Q3 What other issues i. This would require training for all the reps in order for them to be able to consider factors like cost of the products, transportation costs and ordering costs.

However there were several sales reps who had a lot of activity within this segment. Hence it would be difficult to encourage these reps to change their planning and working style away from hospitals. Hence the job of sales representatives would now include promoting and selling focus products rather than simply taking orders from customers.

  1. Hence those who significantly exceed the target sales should be compensated or rewarded appropriately.
  2. My case study strategy involves - Marking out the protagonist and key players in the case study from the very start. Build a corporate level strategy - organizing your findings and recommendations in a way to answer the larger strategic objective of the firm.
  3. My case study strategy involves - Marking out the protagonist and key players in the case study from the very start.
  4. Therefore we would come up with various bands in the commission structure. HBR case studies provide anecdotal instances from managers and employees in the organization to give a feel of real situation on the ground.
  5. Focus on the following - Zero down on the central problem and two to five related problems in the case study. Since this is a sales driven business, targets are vital to the role of each sales employee and hence sales and contribution should form an integral part of the compensation structure.