You have been hired as a consultant to help Darla Jones and Isabelle Hunter decide on the best distribution strategy to use if IO enters the U.S. market. Their options include attending trade shows or hiring a sales force. Each option brings its own opportunities and risks, so Jones and Hunter must balance the qualitative factors with the quantitative factors when making their decision.
The report should be presented as a business case. It requires a cover page, introductory paragraph, body, conclusion, and appendices.
The report should be no longer than four (4) pages, plus an additional three (3) pages of appendices to present your analysis. The following questions should be addressed/answered in the report and/or appendices:
- Pros and cons of each distribution strategy from a qualitative point of view.
- Prepare a quantitative analysis of each distribution strategy, using a contribution margin approach.
- For each distribution strategy, calculate the total contribution margin for each of the two product lines.
- Calculate IO’s break-even point for each distribution strategy.
- Determine which distribution channel will be more profitable in 2020.
- Recommend a distribution strategy based on your qualitative and quantitative assessment.
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