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1. What type of competitive environment does Electronic City face? Why do you say so?


Answer: As there are only a few major retailers selling these brands, the competitive environment can be termed as oligopoly for the Electronic City. These handful numbers of chains engage in intense competition with each other to capture market share. The strategic decisions of one firm influences the decisions of another in terms of pricing, marketing strategies, etc. as everyone is aware of each other's moves.


2. What can you say about the management style of the VP of Marketing in the case? Is it appropriate? Why, or why not?


Answer: The management style of VP of marketing, although aggressive in nature, was not suitable and bit autocratic in nature because of stringent rules regarding delivery of script. I do not think it is appropriate strategy in all scenarios and the sales people should be given certain level of autonomy and flexibility to ensure that sales tactics remain effective and can be modified to suit the preference of different type of customers.


3. Define any ethical issue that you perceive in this scenario.


Answer: One of the ethical issues is the strict guidelines regarding script. VP of marketing should not force sales people with such stringent conditions regarding delivery of script and should give more autonomy and flexibility. Also, the bar for warranty sales was too ambitious in nature, creating pressure situation for the sales people. The conditions were forced on to the sales people, which was unethical in nature.


4. Should Phil become more adept at predicting which of his customers will likely buy the warrantyâ?"say he goes from 80% accuracy to 90% accuracyâ?"will this impact his incentive pay? Explain your answer.


Answer: I do not think any impact on the incentive pay because he will anyways make equal effort to sell warranty to all the customers as per the rules of the organization/VP of marketing. From a psychological perspective, it might be the case that better accuracy in judgement will boost his motivation to higher levels and influence his drive to make the sale.


5. How do the comments/reactions of each of these people shape Phil's thinking regarding his job?

 a. Maria

 b. Dr. Smith

 c. Fr. George


Answer: Maria's reaction will result in positive reinforcement for Phil and he will be more proud of his achievement and motivated to further excel in the job. Dr. Smith's comments can be taken positively as well by Phil and he would feel that this questioning would help him identifying opportunities for improvement in his job. However, Father George's comments would have disturbed him a little bit because it pointed out to the failures or negative aspects of his job.


Overall, I think that comments from these three will have a positive impact on Phil's thinking towards his job and he will be able to return to work with greater enthusiasm and motivation to further succeed in his position.




6. What will Phil do when he returns to work next week? Why do you think so?


Answer: When Phil returns to work next week, he will be more motivated to learn from his earlier mistakes and identify/innovate new ways to convince those customers that have not been buying from him. He will become even more positive and improve his success ratio with prospective clients.


Part 2:


1. What is the dollar amount of warranty extensions that Phil sold in January 2007?


Answer: The dollar amount of warranty sales was 10 times the commission earned by Phil, i.e.

= 10* 360.40 or $3,604.


This is because his commission was 10 percent of total warranty sales.


2. Estimate the dollar amount of HDTV sales that he generated in the same month, assuming that he was able to sell warranty extensions in roughly 55% of eligible transactions?


Answer: Since the total warranty was 8% of the total TV sales, the $3,604 earned by Phil was 8% of the total dollar sales.


X/8%= 3,604 or 3,60,400/8= $45,050 of total TV sales attributed to Phil for 55% of the transactions.

If 55% of the sales made by Phil is $45,050, the remaining 45% is: $36,859.


Total sale = $45,050+ $36,859 = $81,909.


3. Suppose that the number of HDTV sets sold in 2007 is projected to be 4% more than the number sold in 2006. How much profit can ElectronicCity expect per-store in 2007 from its warranty extension business? (Assume that the average selling price of an HDTV set in 2007 remains the same as in 2006.)


Answer: First of all, let us calculate the total unit sales, which is 4% more than 320,000 units or 12,800 units more or 3,32,800 units.


Let us assume that Phil's success rate of selling warranty in 55% of the cases can be replicated. This will result in warranty being sold for 1,83,040 units (55% of 3,32,800 units).


Value of per unit sales: 2,220.93 (710.7 million last year sales divided by 320,000).


Multiplying it by unit sold with warranty: $40,65,20,400


Value of warranty (8% of dollar value): $3,25,21,632


Less Sales person commission of 10%: 32,52,163.2


Less expenses of $800 per unit sold with warranty: 1,83,040*800= $14,64,32,000


Net gain: $1,46,26,268.8 or 14.62 million approximate gains

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1. What xxxxxxx of competitive xxxxxxx does Electronic xxxxxxx xxxxxxx Why xxxxxxx you say xxxxxxx As there xxxxxxx only xxxxxxx xxxxxxx major retailers xxxxxxx these brands, xxxxxxx competitive environment xxxxxxx be termed xxxxxxx oligopoly for xxxxxxx Electronic City. xxxxxxx xxxxxxx numbers xxxxxxx chains engage xxxxxxx intense competition xxxxxxx each xxxxxxx xxxxxxx capture market xxxxxxx The strategic xxxxxxx of one xxxxxxx influences the xxxxxxx of another xxxxxxx terms of xxxxxxx xxxxxxx strategies, xxxxxxx as everyone xxxxxxx aware of xxxxxxx other's xxxxxxx xxxxxxx can you xxxxxxx about the xxxxxxx style of xxxxxxx VP of xxxxxxx in the xxxxxxx Is it xxxxxxx xxxxxxx or xxxxxxx not?


Answer: The xxxxxxx style of xxxxxxx of xxxxxxx xxxxxxx aggressive in xxxxxxx was not xxxxxxx and bit xxxxxxx in nature xxxxxxx of stringent xxxxxxx regarding delivery xxxxxxx xxxxxxx I xxxxxxx not think xxxxxxx is appropriate xxxxxxx in xxxxxxx xxxxxxx and the xxxxxxx people should xxxxxxx given certain xxxxxxx of autonomy xxxxxxx flexibility to xxxxxxx that sales xxxxxxx xxxxxxx effective xxxxxxx can be xxxxxxx to suit xxxxxxx preference xxxxxxx xxxxxxx type of xxxxxxx Define any xxxxxxx issue that xxxxxxx perceive in xxxxxxx scenario.


Answer: One xxxxxxx the ethical xxxxxxx xxxxxxx the xxxxxxx guidelines regarding xxxxxxx VP of xxxxxxx should xxxxxxx xxxxxxx sales people xxxxxxx such stringent xxxxxxx regarding delivery xxxxxxx script and xxxxxxx give more xxxxxxx and flexibility. xxxxxxx xxxxxxx bar xxxxxxx warranty sales xxxxxxx too ambitious xxxxxxx nature, xxxxxxx xxxxxxx situation for xxxxxxx sales people. xxxxxxx conditions were xxxxxxx on to xxxxxxx sales people, xxxxxxx was unethical xxxxxxx xxxxxxx Should xxxxxxx become more xxxxxxx at predicting xxxxxxx of xxxxxxx xxxxxxx will likely xxxxxxx the warrantyâ?"say xxxxxxx goes from xxxxxxx accuracy to xxxxxxx accuracyâ?"will this xxxxxxx his incentive xxxxxxx xxxxxxx your xxxxxxx I do xxxxxxx think any xxxxxxx on xxxxxxx xxxxxxx pay because xxxxxxx will anyways xxxxxxx equal effort xxxxxxx sell warranty xxxxxxx all the xxxxxxx as per xxxxxxx xxxxxxx of xxxxxxx organization/VP of xxxxxxx From a xxxxxxx perspective, xxxxxxx xxxxxxx be the xxxxxxx that better xxxxxxx in judgement xxxxxxx boost his xxxxxxx to higher xxxxxxx and influence xxxxxxx xxxxxxx to xxxxxxx the sale.


5. xxxxxxx do the xxxxxxx of xxxxxxx xxxxxxx these people xxxxxxx Phil's thinking xxxxxxx his job?

 a. xxxxxxx Dr. Smith

 c. xxxxxxx George


Answer: Maria's xxxxxxx will result xxxxxxx xxxxxxx reinforcement xxxxxxx Phil and xxxxxxx will be xxxxxxx proud xxxxxxx xxxxxxx achievement and xxxxxxx to further xxxxxxx in the xxxxxxx Dr. Smith's xxxxxxx can be xxxxxxx positively as xxxxxxx xxxxxxx Phil xxxxxxx he would xxxxxxx that this xxxxxxx would xxxxxxx xxxxxxx identifying opportunities xxxxxxx improvement in xxxxxxx job. However, xxxxxxx George's comments xxxxxxx have disturbed xxxxxxx a little xxxxxxx xxxxxxx it xxxxxxx out to xxxxxxx failures or xxxxxxx aspects xxxxxxx xxxxxxx job.


Overall, I xxxxxxx that comments xxxxxxx these three xxxxxxx have a xxxxxxx impact on xxxxxxx thinking towards xxxxxxx xxxxxxx and xxxxxxx will be xxxxxxx to return xxxxxxx work xxxxxxx xxxxxxx enthusiasm and xxxxxxx to further xxxxxxx in his xxxxxxx What will xxxxxxx do when xxxxxxx returns to xxxxxxx xxxxxxx week? xxxxxxx do you xxxxxxx so?


Answer: When xxxxxxx returns xxxxxxx xxxxxxx next week, xxxxxxx will be xxxxxxx motivated to xxxxxxx from his xxxxxxx mistakes and xxxxxxx new ways xxxxxxx xxxxxxx those xxxxxxx that have xxxxxxx been buying xxxxxxx him. xxxxxxx xxxxxxx become even xxxxxxx positive and xxxxxxx his success xxxxxxx with prospective xxxxxxx 2:


1. What xxxxxxx the dollar xxxxxxx xxxxxxx warranty xxxxxxx that Phil xxxxxxx in January xxxxxxx The xxxxxxx xxxxxxx of warranty xxxxxxx was 10 xxxxxxx the commission xxxxxxx by Phil, xxxxxxx 10* 360.40 xxxxxxx $3,604.


This is xxxxxxx xxxxxxx commission xxxxxxx 10 percent xxxxxxx total warranty xxxxxxx Estimate xxxxxxx xxxxxxx amount of xxxxxxx sales that xxxxxxx generated in xxxxxxx same month, xxxxxxx that he xxxxxxx able to xxxxxxx xxxxxxx extensions xxxxxxx roughly 55% xxxxxxx eligible transactions?


Answer: xxxxxxx the xxxxxxx xxxxxxx was 8% xxxxxxx the total xxxxxxx sales, the xxxxxxx earned by xxxxxxx was 8% xxxxxxx the total xxxxxxx xxxxxxx 3,604 xxxxxxx 3,60,400/8= $45,050 xxxxxxx total TV xxxxxxx attributed xxxxxxx xxxxxxx for 55% xxxxxxx the transactions.

If xxxxxxx of the xxxxxxx made by xxxxxxx is $45,050, xxxxxxx remaining 45% xxxxxxx xxxxxxx sale xxxxxxx $45,050+ $36,859 xxxxxxx $81,909.


3. Suppose xxxxxxx the xxxxxxx xxxxxxx HDTV sets xxxxxxx in 2007 xxxxxxx projected to xxxxxxx 4% more xxxxxxx the number xxxxxxx in 2006. xxxxxxx xxxxxxx profit xxxxxxx ElectronicCity expect xxxxxxx in 2007 xxxxxxx its xxxxxxx xxxxxxx business? (Assume xxxxxxx the average xxxxxxx price of xxxxxxx HDTV set xxxxxxx 2007 remains xxxxxxx same as xxxxxxx xxxxxxx First xxxxxxx all, let xxxxxxx calculate the xxxxxxx unit xxxxxxx xxxxxxx is 4% xxxxxxx than 320,000 xxxxxxx or 12,800 xxxxxxx more or xxxxxxx units.


Let us xxxxxxx that Phil's xxxxxxx xxxxxxx of xxxxxxx warranty in xxxxxxx of the xxxxxxx can xxxxxxx xxxxxxx This will xxxxxxx in warranty xxxxxxx sold for xxxxxxx units (55% xxxxxxx 3,32,800 units).


Value xxxxxxx per unit xxxxxxx xxxxxxx (710.7 xxxxxxx last year xxxxxxx divided by xxxxxxx it xxxxxxx xxxxxxx sold with xxxxxxx $40,65,20,400


Value of xxxxxxx (8% of xxxxxxx value): $3,25,21,632


Less xxxxxxx person commission xxxxxxx 10%: 32,52,163.2


Less xxxxxxx xxxxxxx $800 xxxxxxx unit sold xxxxxxx warranty: 1,83,040*800= xxxxxxx gain: xxxxxxx xxxxxxx 14.62 million xxxxxxx gains

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