Thursday, August 15, 2019

Revenue Assessment Essay

Thank you for the opportunity to assess your sales data in order to provide recommendations for increasing your sales. The analysis and recommendations below are based on the data you provided, which covers a period from May 2004 through June 2006. The analysis below is based on this data alone. Therefore, our recommendations should be tempered by your knowledge of business realities and your market. Please let us know if we can answer any questions concerning the analysis or the recommendations provided. Discount Analysis Analysis – An analysis was carried to understand if there is a relationship between the percentage of discount offered and the number of orders from customers or the number of items ordered by customers. Orders were grouped by the percentage discount offered, with the results seen in the below graphic. Most of the orders were placed without any discount, followed by orders placed at discounts of 5% to 25%. It can be seen that for discounts in the range 5% to 25%, there is not much of a different or a direct relationship between the discount offered and the number of orders or quantities placed by the customer. Based on this, it can be concluded that there is no significant relationship between the discount level and the extra orders by a customer. Graphic Recommendation – Based on the information above, I recommend that the company should not allow very high discounts for orders such as 20% or 25%, and it would be able to obtain the same level of sales by giving lower discount such as 5% or 10% for volume discounts. The surplus funds kept will add to the revenues and profits of the company, and can be used for other items. Revenue Share Analysis Analysis- An analysis was performed to find out which countries created the biggest market for the company and also to review each salespersons performance in relation to each other. A majority of sales come from Germany and USA, with Austria, Brazil, and France in that order followed by other countries. It would be better for the company to focus on customers in these areas. The top salesperson are Peacock followed by Leverling and Davolio. The salesmen can be identified to receive provisional training for better on going performance. Graphic Recommendation – Since markets are becoming increasingly competitive, I recommend that the company concentrate on its major markets and increase market share there. It is suggested that the company select its major markets, USA, Germany, Austria, Brazil, and France and then focus its marketing and customer management efforts in these demographics to continue success in a competitive market. Sales Trend Analysis Analysis – Revenues per month per country were considered and plotted as can be seen in the below graphic. From the graph below we can see that the company has gradually added more countries to its target areas and has shown a consistent growth in revenues. Looking at the revenue movement of two of the company’s biggest markets, USA and Germany, we can see that there is a trend of orders peaking and falling down in a span of every three to four months. This essentially shows that customers are ordering in large quantities and then not ordering for some time, and then ordering after a certain gap. One aspect that has to be examined is if these spikes and troughs are to do with discounts that are given on quality due to which customers are ordering in bulk and then not ordering at all. Graphic Recommendation – The spikes and troughs in the sales over a regular basis and time period need to be analyzed further. These spikes and troughs could be the result of price discounts that the company is offering due to which customers are buying in bulk and stocking up on products. This could lead to variability in demand, leading to excess demand or no demand that would lead to non-efficient production by the company. Root cause analysis should be performed, and if it is established that volume discounts are leading to this phenomenon, it is recommended that the company minimize discounting and work with the customers using a partnership model to ensure a steady demand. Category Analysis Analysis – About 21% of total sales come from Beverages making it the largest category of products, followed by dairy products, confections and meat/poultry. The other categories are relatively smaller and the company can see at increasing their sales and offer them as combinations with merger products that would help in increasing the category and overall sales of the company. Graphic Recommendation – To improve revenues and margins, the company will have to increase the revenue contribution of every product category. I recommend that the company go into its customer requirements and see if it can cross sell product items, so that it can get more revenue from each customer. This will ensure that the company is able to offer competitive prices to customers and grow its business using its existing customers. The excel project allowed me to fully understand and â€Å"bring together† all of our Terminal Course Objectives and apply my learned skills into a real world scenario. I believe I have a better knowledge and proficiency of MS Excel spreadsheet formulas, charts, tables, graphs and a better understanding of data analysis, then ever before.

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