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The Valley Winery Case Study Essay

The Valley Winery is one of the nations largest privately help companies, and the top domestic producer of wine selling more than 40 percent of all wine produced in the United States. Valleys success is largely due to their high quality wine sold for a lower price, and a very aggressive and innovative sales force. Sales groups are separated into three main categories:

1) Liquor stores and bars
2) Restaurants, resorts, hotels, and motels
3) Chain Division

The company has experienced many sales organization changes in their San Francisco chain division; recently focusing on the importance of key customers classified as major accounts. Pat Waller was hired as sales manager of the San Francisco region’s branch, where he manages two are managers. The two area manages are responsible for nine district mangers, who supervise five to six sales reps each. Each sales rep is responsible for a certain number of stores from all major grocery chains, caring to all their merchandising, service, and miscellaneous needs related to Valley Winery. Although the company has had favorable sales results in the San Francisco Region in recent years, Waller recognizes problems within the company and is concerned that the company will have difficulty in maintain their current status with the rapid increase of competition within the wine industry. Key problems in the management of Valley Winery consist of but not limited to:

•No experienced sales reps
•Sales reps aggressive attitudes
•Spraying hairspray on competitors wine bottles to look “dusty”
•Hiring and training processes
•Lack of leadership in management
•Non constant administrative structure
•Different levels of pay grades by district
•No respect for private (home) life
•District managers calling Murphy and complaining late at night about issues that could have been taken care of early that day
•No vision for future
•High turnover rate, nearly 100%
•Most experienced guy being 2 years but most not even reaching 1 year
•Having to spend up in the $25,000 a year to recruit and train an individual employee
•Solution: get rid of finder’s fee (perhaps with lowering the turnover rate less money will be invested in the pay out of recruitment)
•Lack of diversity for sales reps

•Mostly male reps
•Female sales reps could benefit sales, bars and liquor stores more likely to buy from attractive women instead of and older man
•Unrealistic and changing quotas
•Flanigan was told to lie just so he would meet his quota
•If they earned commission they would be more motivated to sell more

Possible options to address the problems and recommended action plan for Valley Winery With a turnover rate nearly reaching 100 percent, Valley winery needs to invest more time and money in their employees so that they can avoid paying $25,000 a year to recruit and train 50 new employees each year. Valley Winery needs to start preparing for the future by applying different strategies to retain employees through commission, rewards, and bonuses, which will significantly lower the turnover rate. Cost can be cut in places that aren’t necessary, such as the employment agency used for hiring (around $40,000/year) and training cost(approximately $1,250,000/year). Money saved by lowering these cost will raise the companies’ profits, and can be used invest in a CRM software and other areas that could improve the company in the long run.

As far as recruiting new employees, college graduates and other employees who apply with sales experience should easily cover the needed amount of sales reps. While interviewing, managers have a standard process for all interviews, and clearly identify the specific role of a sales rep, and the new direction of the company that is looking for loyal, trustworthy, and ethical employees willing to work as team to reach the organizations goals. Sales reps should all receive the same salary with lower(reasonable) sales quotas , and earn a small commission of each sale until the goal is reached. End of the year bonuses and rewards can be offered to the top salespersons as extra incentive to keep working even after the sales quota is reached.

Upon hiring new sales reps, a group training session should be mandatory, touching on the companies goals, what to do and what not to do to make a sale, and real world sales scenarios. Valley Winery needs to establish supporting leadership(mentoring), realistic targets and sales for each sales rep, ethical standards for the entire organization, and a better communication system from top to bottom so that everyone is on the same page. Although it may take time and money to implement all of the changes, in order to sustain long-term growth and profitability for the company, these changes are necessary, viable for Valley Winery.

•With turnover: perhaps add a “end-of-year” bonus to add incentive for people to stay oPros:
•People would stay
•Have more experienced sales reps
•Money invested in each employee
•Stay until end of year bonus and just leave?
•Put more females in the predominantly male sale chains as well as with males in females one. And equal out the pay/reward/benefits given out to each sales group •
•Each division could perhaps be more effective with similar incentives for reward
•Cost more money offering each person commission and similar benefits such as a company car
•Lower the quotas required by sales reps
•Incentive to sell because your objectives are feasible, but still a challenge
•Employees desire to stay
•As long as there is commission they will still attempt to exceed their sales quotas oCons:
•If everyone reaches their quotas your pay out would be obnoxious to fund everyone’s bonus checks
•Why is there not someone there that can handle the problem at that time? After work hour’s companies shouldn’t be calling and demanding the sales reps to perform tasks. Better communication during work hours is needed to avoid such issues, organization can be increased by implementing CRM.


•Avoid the issue with Murphy
•Better at handling issues with customers and improves communication between Napa and customer oCons:
•Cost a little more money
•Takes time to implement
•Takes time for people to learn it
•Work on business ethics? With the sales quota being lower they won’t have to commit devious deeds to get head. Just being less aggressive in general.

•Won’t create bad image
•May sell less
•Like in {#2} adding commission to each branch sales so that all benefit the same •Perhaps do an in depth study to see how efficient the employees sent Napa’s way have been. oPros:
•Figure out where your best employees are coming from
•Paying so much ($2000) per individual
•Only one guy with any experience to base study on
•Solution: just cut it out completely and save the money and focus more on just training as well as specifying who you hire by seeking people with experience

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