C. K. Worth Co., Ltd., was founded by Clayton Ken Worth, who also serves as president. C. K. Worth’s primary activity is representing U.S. processed and fresh foods to retail and food service distributors. The company is also engaged in representing processed and fresh food producers in international trade. Principals in the company have many years of business experience in sales and the food industry. The company has been in business for twenty-five years, and President Worth is interested in diversifying the company’s products to ensure its continued growth and success.
C. K. Worth has employed Kathy Green for the past twenty years. During that time, Green has worked in various capacities with the company. She has seen the company grow from a small operation to a large brokerage firm, which employs fifteen salespeople located throughout the United States. However, Green always thought that the C. K. Worth Co. should expand its services to represent other U.S. and international products. Given that Green has a sport background and has tracked the growth of the sport industry over the past decade, she approached Worth with the idea that the company should expand its product line to include sporting goods. Green was confident that the Worth Co. could improve its profit margins by representing another product line, in addition to food. After listening to Green’s idea, Worth developed a sporting goods division within Worth Co. and named Green as its vice president. Her job was develop a plan to expand the company’s services to include sporting good products and to get the division up and running.
Green was excited about the opportunity and proceeded to develop a plan for C. K. She developed a mission statement for the sporting goods division, which was to represent manufacturers of sporting goods products in sport retail stores within the United States. Her goal was to acquire at least ten product lines. With the approval of Worth, Green attended the National Sporting Goods Association shows in New York, Chicago, Dallas, and Los Angeles. In addition, she contacted sport manufacturers by telephone, letter, email, and personal visits requesting to represent their products. Within six months, Green had acquired more than twenty product lines to represent to sporting good retail stores. Primary lines acquired were Converse, Salzenger, and some Wilson products. She was pleased with the product lines, and reported her progress to Worth.
After their meeting, Worth decided that, instead of hiring salespeople specifically for the sporting goods division, it would be more efficient to use the existing food sales force to represent the sporting goods products. Green thought it would be better to hire a sales force specifically for sporting goods products, however. Worth stated that he did not have the resources to hire new sales personnel; instead, Green should train the existing food sales forces to sell the sporting goods products. Given the situation, Green scheduled a sales meeting to discuss the selling of sporting good products.
Fourteen of the fifteen sales personnel attended the meeting. Although some personnel were happy to have another product line to sell, many voiced their opposition to selling sporting good products—stating that they did not believe that the product lines of food and sporting goods were compatible. After much discussion, however, the entire sales force decided to give the sporting goods line a try. After all, as one salesperson stated, “selling is selling.” Green distributed procedures for selling the sporting goods line and assigned sales territories to be the same as the food territories.
As time went by it became apparent to Green that having food sales reps sell sporting goods products was not working. She received phone calls from manufacturers complaining about the lack of knowledgeable people selling their product. In addition, she received phone calls from retail stores stating that the reps did not seem interested in the products and that they were providing poor service. Green reported the situation to Worth.
Worth’s reaction was simple. He instructed Green to “either get the food sales force to do a good job in selling sporting good products or get rid of the sporting goods line.” Green decided to work with the sales force a while longer. She provided more training and sales meeting. Sales personnel attendance at the meeting went down, as did the sales of sporting goods products. Furthermore, manufacturers were beginning to pull their lines from the C. K. Worth Company. Given all these facts, Green decided that she could no longer support having the C. K Worth Company sell sporting goods products. Therefore, fifteen months after the inception of the Sporting Goods Division of C. K. Worth Company, Worth discontinued the division upon Green’s recommendation.
1. How effective was the C. K. Worth Company’s planning regarding the sporting goods product lines? Where did the company go wrong? What planning steps could have been considered and/or undertaken to improve the effectiveness of the sporting goods product lines?
2. In what areas were the goals of the food division and the sporting goods division compatible, and in what areas were the goals not compatible? Explain.
3. Undertake and report the results of a SWOT analysis for the expansion of C. K. Worth Company’s business into sporting goods product lines. What factors should have been considered in the decision to create a new division to sell sporting goods?
4. If you were an advisor to Worth and Green, what advice would you have provided to them about planning, budgeting, goals, forecasting, and knowledge management?
5. Go online and locate two sporting good manufacturers’ websites to determine how they sell their products. What types of information are included in these manufacturers’ mission statements?