Options

1. Accept the offer by the retailer

2. Reject the offer and hire a sales consultant

3 Reject the offer and continue the operations without any change

Criteria

1. Revenue Growth

2. Volume and profit

3. Brand Value

Evaluation of Options

1. Accept the offer by the retailer:

The client is constituting 33% of total sales of WLHF’s wholesale business in 2006 and after
predicting the 2007 revenue growth, it is constituting for over 42% (Exhibit) of total wholesale
business which is a rise of 27% as compared to last year. If we consider the increase the volumes
(quantity sold), we will have higher market presence with 190505 units predicted to be sold in 2007
as compared to 38101 in 2006 (Exhibit ). The increase in net income is around 240% as compared to
2006. The brand value will increase among customers due to higher presence in market as there is
an increase of 5-fold in quantities sold

2. Reject the offer and hire a sales consultant:

The cash flow statement of WLHF (Exhibit) shows that WLHF has $ 3,18,300 cash in hand to spare for
hiring sales consultant. The predicted increase in revenue due to hiring the sales consultant is
around 12.14% (Exhibit). The profits from operations are predicted to decrease by around 13%
(Exhibit) due to rise in expenses by 14 %. Hiring a sales consultant will help in increasing the brand
value because that will attract businesses from home designers.

3.Reject the offer and continue the operations without any change

The increase in revenue due to rejection of the offer is around 9.5% (Exhibit). The net income from
the operations are predicted to increase by the standard 9.5% (Exhibit) with no substantial increase
in volumes. There will be no significant increase in brand value as compared to 2006.

Recommendation

After evaluating the above options, the first course of action, accepting the offer by the retailer,
seems to be the most profitable in terms of growth as well as new customer acquisition. The
increase in revenue is predicted to be around 42% for the first option whereas it is 13% and 9.5%
respectively for the other two options. Similarly, the profit margin is also predicted to increase by
240% for the first option as compared to -14% and 9.5% for option 2 and option 3 respectively.
There will be an increase in brand value due to prominent shelf space provide by the wholesale
consumer.

Action Plan

1.