四大会计师事务所群面案例分析之Epton Retail

Epton Retail

Objective:

To work with a team to provide a proposal to Epton, a local office furniture retail company, to help them increase their sales revenue.

Background:

Epton Retail, an office furniture retail company, was formed fifteen years ago in China, and has grown to 250 retail stores nation-wide with over 6,000 employees, as a result of growing demand and its unrivalled reputation for quality and service.

The market supplied by Epton Retail and its competitors is broken down into three categories:

1)Computer desks, chairs, cabinets, and book shelves sold to professional and

small business customers (i.e. those with fifty or less employees).

2)Computer desks, chairs, cabinets, and book shelves sold to individuals for

home use.

3)All other office furniture accessories including backrest cushions, pillows,

table mats, etc. sold to both professional and individual customers.

Epton Retail does not manufacture products itself, but purchases the products in the first two categories above from Epton Technology who also provides sales training and after-sales services of the relevant products. The third category of products is purchased by Epton Retail from multiple external manufacturers who also provide sales training and after-sales services for their products.

(Note: Epton Retail and Epton Technology both belong to the Epton Group and operate independently. Epton Technology manufactures office furniture, and sells them to larger corporate customers; While Epton Retail sells the products to small business customers and individuals through its retail stores and online official website.)

Graph 1 below shows the growth in overall consumer demand for the products in the three increase categories in China. Market share of Epton Retail for all products has changed over time (see Graph 2).

In Epton, stores and regions work in isolation and are fully responsible for their won sales target. Each retail store is supervised by a store manager who has staff ranging from 20 to 50 depending on the size of the store. They are divided into a Sales team, Warehousing team and Servicing team. Store manager, salespeople and servicing team are well trained in the technical aspects of their products but have little sales or softer skills, such as people management and customer service. The Warehousing team is responsible for keeping the shelves stocked and the store full, and also for processing online orders. However, most store managers see the online processing of orders as an unnecessary burden and do not encourage their staff to prioritize this work. Recently, several store managers have reported losing some well-trained staff to their major competitor.

The customer satisfaction survey implemented by Epton Internal Auditing (see graph below) shows that sales and customer satisfaction across the stores is remarkably consistent:

Regarding competition in China, there are many companies offering a similar service as Epton Retail. The major competitor is Cornee. This company is France based and began operations in China eight years ago. It has now built 40 to 50 stores in each of the Epton Retail regions, selling a similar product range. Cornee’s management focuses on branding and satisfying customer needs. It spent 140 million RMB on branding through different advertising channels and gained the revenue of over 1350 million RMB last year. Managers and staff are selected

primarily on their skills in customer orientation. Technical and customer oriented training is provided where the focus is on understanding the customers’ needs and incorporating them in Cornee’s products. The graph below shows the percent of market share for Cornee over the past 5 years.

Tasks:

Your team is expected to provide and present a proposal to management of Epton Retail, including:

a)The most two important reasons why the sales slowdown

b)The corresponding action to increase the sales revenue