Case notes: designs by kate, review essay.

Please answer this question because it will  cover 70% of the grade

DO THE MATH… I will be grading this partially based on whether you attempted any analysis or not.  No analysis… max grade is 70%.

1. Discuss DBK’s historic growth rate. How does its growth compare to the industry overall? What are the drivers of top-line growth?

2. Working from Exhibit 1a as well as the information in the case, how much would the average sales representative earn in a year? How does this change as the sales representative remains with the company over time? How does this change as the sales representative transitions to a leader? A manager? A director? To make for a more straightforward discussion of the revenues associated with these positions, the instructor might ask the students to consider specific scenarios: a.) Compare an average first year sales representative with an average fifth year representative. How much does each earn? b.) Compare the commission dollars of a sales representative with $1,000 in monthly sales and no team with those of a Leader with $1,000 in monthly sales and 2 team members. b.) Compare the commission dollars of a sales representative with $1,250 in monthly sales and no team with those of a Manager with $1,250 in monthly sales and 3 level-one team members and 2 level-two team members.

3.Discuss the importance of retention of sales representatives. If the attrition rate had averaged 25% or 30% over the past five years (not unusual for a direct sales model), how would this have impacted the total number of sales representatives? Given that not all sales representatives are equal (experience is a big driver of productivity), how would this impact revenues?

4.Evaluate the potential costs associated with the two options Creevey is considering. Which option would you advise her to take?

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