Swisher Machine And Mower Company

335 Words2 Pages
Swisher Machine and Mower Company Swisher Machine and Mower Company (SMC) is proposing a private-brand distribution agreement. They seek the opportunity of expanding production that would add benefit of a broadened distribution in metropolitan areas such as Minneapolis and Kansas. These areas make up of 40 percent of SMC sales. Wayne Swisher, President and Chief Executive Officer of SMC is contemplating about accepting this proposal to further expend the company’s growth. He is concerned about SMC’s future prospects and how private-brand distribution arrangements with a major national retail merchandise chain might offer benefits to SMC, but Swisher is wondering if other actions might be more attractive rather than the proposed proposal. The Private-brand distribution proposal has positive and negative factors that need to be taken into account from a management perspective. This proposal will bring additional revenue to SMC by expanding their private-brand distribution throughout metropolitan areas. The proposal arrangement is to bring 700 standard riding mowers into the market compared to the national retail merchandise chain that is expected an annual order of 8,200 units. SMC would have 11.7 percent market capitalization among its competitors in the Private-brand distribution in orders. SMC has consistently generated net profit sales of 10 percent annually and has a strong reputation of being successful. This company needs to understand the guidelines of the contract and see if the proposal is feasible for their company to keep their reputation high. Management needs to discuss contract factors such as: * purchase price 5 percent lower the SMC’s manufacture list price for its standard model; * prices would be fixed with free shipping (no seasonal or promotional discounts); * greater exposure to liability claims; and * 45-day collection payment

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