Palladium Door Anaylis

CASE

Palladium Door, Inc.

In November 2003, the company planning process for Palladium Door, Inc. had just concluded, and Richard Hawly, director of sales and marketing, was reviewing the corporate sales goal for 2004. The plan established a sales goal of $12.5 million for 2004, \vhich represented a 36 percent increase in sales over projected 2003 year-end sales. During the planning process, a number of fellow executives had voiced concern over whether the distribution approach used by Palladium Door was appropriate for the expanded sales goal. Hawly felt that their concerns had merit and should be given careful consideration. Though he had considerable latitude in devising the distribution strategy, the final choice would have to be consistent with achieving the 2004 sales goal. His approach and action plan had to be prepared in a relatively short time to permit implementation in January 2004.

THE COMPANY

Palladium Door, Inc. is a privately owned regional manufacturer of residential and commercial garage doors. Projected year-end company sales were $9.2 million in 2003 with a net income of $460,000 (see Exhibit 1). The company manufactures both insulated and noninsulated steel residential and commercial garage doors and supplies springs, cables, rollers, and side roller tracks for its products. Surveys of its dealers indicate that the majority of its doors are replacement purchases in the home remodeling segment of the residential housing market, with the balance of sales going to the new residential housing market and the commercial replacement garage door market. The company distributes its garage doors through 300 independent dealers that typically offer three different garage door manufacturer brands and 50 exclusive dealers EXHIBIT 1 Palladium Door, Inc. Income Statement Projection: For the Period Ending December 31, 2003

Net Sales Cost of Goods Sold Gross Profit Selling, General & Administrative Expenses Net Profit Before Income Tax $9,200,000...