Business Analysis of Peak Garage Doors Inc Essay example -- Business

Business Analysis of Peak Garage Doors Inc INTRODUCTIONPeak Garage Door Inc. has set a goal to increase their gross gross revenue for 2004. Garage door industry is expecting a growth of 2.4% while the management of Peak is looking to increase conjunctions sales 26.4%. The company soon has 50 exclusive dealers and 300 non-exclusive dealers. Management has three proposals in front of them. The first suggestion is to increase the number dealers in their existing markets. The second testimony is to develop an exclusive franchise agreement with existing non-exclusive dealers. The third recommendation is to decrease the number of dealers and focus companys resources on increasing represent for the existing dealers. Of course there is an woof for them to leave everything as it is. My suggestion is to go with the second recommendation due to the fact that exclusive dealers produced 70% of companys sales and non-exclusive dealers contributed only 30%. In order for Peak Garage Doors Inc. to reach their sales goal for 04 they will have to gain more than exclusive dealers since they contribute much more profit to the company. THE INDUSTRYThe residential garage door industry sales for 2003 were $2 billion 90% ($1.8 billion) of these sales were steel doors, the type of door the Peak specializes in. Projected industry sales for 04 were $2.05 billion, representing 2... ...Net Sales$8,452,518.40Cost of Goods Sold$6,900,000.00Gross Profit$1,552,518.40 Selling, General and Admin get down$1,600,000.00Net Profits Before Taxes-$47,481.60Choosing option 3 would lead to a loss.Option four is to do nothing. This would mean that everything would stay the same, and Peak could expect a 2.4% increase in sales.INCOME STATEMENT 2004 Net Sales$9,420,800.00Cost of Goods Sold$6,900,000.00Gross Profit$2,520,800.00 Selling, General and Admin Expense$1,840,000.00Net Profits Before Taxes$680,800.00 destinationAccording to the calculations, it will be impossible for the company to reach the sales goal of 12.5 million regardless of which option they choose. However the best outcome is with the option number two which is to develop an exclusive franchise agreement with existing non-exclusive dealers.