Consulting Project Proposal – ARDEX Hong Kong Limited
September 11, 2009
Team: Craig Dixon, Jennifer Kim, Fabrizio Palombi, James Stout, Jana Svedova
Client
ARDEX Hong Kong Limited - Andreas Oberecker, Sales Manager
Client Organization
ARDEX Hong Kong Limited is a member of the ARDEX group, a developer and manufacturer of
high-quality specialist construction materials specifically for substrate preparation, leveling
floors, and the fixing of natural stones, ceramic tiles, and other surfacing materials. The
company is a medium-sized, independent, family owned business The company was founded in
1949 and is based in Witten, Germany and currently generates consolidated annual sales of
over 475 million EUR. ARDEX has 35 subsidiaries, 1,863 employees and factories and sales
offices in over 50 countries worldwide.
The vision of the ARDEX Group is to be one of the world’s leading solution providers of high
performance specialty building materials. The company guides itself by a culture based on the
principle of “excellence in all that we do” and sustainable, long-term growth objectives
underpin all of its activities. ARDEX products have been specified on buildings such as the Burj
Al-Arab Hotel, the Hong Kong Mandarin Oriental Hotel and the Shaghai Jinmao Tower.
ARDEX considers its products to be superior in terms of performance and life expectancy, and
they are priced considerably higher than the products of most competitors. The business of the
company is very local and as such regional offices such as Hong Kong possess a high level of
autonomy. As ARDEX sells specialist construction products, they engage in a consultative
selling process and also provide the necessary training and support services for the application
of their products.
Objective
The objective of this project is to determine the optimal sales strategy with respect to the
structuring of the sales force of ARDEX’s Hong Kong branch. Specifically, we will consider
whether having the current sales force aligned by product focus or by customer focus will result
in higher growth in sales and profits in a shrinking industry. Further consideration will be given
to what compensation scheme will best support the recommended structure.
The consultants will provide an independent assessment and recommendation that will be
delivered to ARDEX’s Hong Kong office Sales Manager in seven weeks.
Key Issues
The key issues to be resolved from the issue tree are whether to structure the sales staff
according to product specialization, client specialization, or to focus on the structure of
compensation in order to drive higher sales, taking all other factors as constants.
In order to analyze these potential solutions, we will begin with interviews of the management
and sales staff. In the interviews we will ask management and sales staff what aspects of the
current process are working well and which are not, and what improvements they would like to
see and why.
In addition, we will look externally at ARDEX's competitors and benchmark the company's sales
strategy, compensation scheme and sales force structures with other similar regional
construction businesses. To do so we will obtain market research information from a third party
company specialized in providing applicable benchmarking data. This data will be supplemented
from the management and sales staff interviews, where we will gain some industry knowledge
as well.
Further research and information gathering will help us navigate the issue tree through more
detailed issues. We will need to examine the drivers of sales in the industry and in the
particular geographical region in order to determine what segmentation of the sales force will
result in the highest sales. When considering a client-focused structure the sales force, further
analysis will be done to determine whether this should be further segmented by geography,
industry, or client size. When considering a product-focused structure, we will further analyze
how best to segment the company’s products. Further consideration will be given to the
compensation scheme for the sales force, and its implication on the how it is structured.
Scope:
The scope has been limited to address the issues around the most pressing question for ARDEX:
How to best focus and structure its sales force. The final deliverable will include an actionable
recommendation. The following are items that are outside of the scope of this specific analysis:
1. Changing the size of the sales force:
This proposes the initial assumption that the consulting group will consider organizational
solutions that pertain to the current sales force. The findings may apply to future growth of the
number of employees on the sales force as deemed appropriate by management of ARDEX
Hong Kong Limited, however changing the size of the sales force is not within the scope of the
proposed solution to be delivered upon project completion.
2. Product mix:
The scope of this project is limited to organizing the sales force with respect to the current
product mix. As such, recommendations for adding, subtracting, and/or otherwise altering the
current product mix are considered to be beyond the scope of this proposal and will not be
addressed. However, the benefits of increased focus on particular products will be considered
3. New clients:
The scope of this project is limited to organizing the sales force with respect to the current
client base. Consideration will not be given to altering the current client portfolio in number or
in name, rather potential for deepening relationships with existing customers will be
considered.
4. Forecasting a growth target:
Forecasting a specific growth target for sales is beyond the scope of this proposal. Although
growth in sales is the target of optimal sales force structuring, the analysis focuses on
comparing various options rather than determining how to grow sales by a specific amount.
5. Chain of command:
The chain of command with respect to the company's formal organizational chart will not be
altered. Changing internal reporting is beyond the scope of this proposal, which is limited to the
organization of the sales force.
6. Compensation augmentation will serve as an auxiliary recommendation:
A compensation scheme will not be recommended. Rather, this recommendation will address
possible compensation strategies with respect to the recommended organizational structure.
7. Organization capabilities and resources available to the sales force:
The organizational and structural decisions of the company are driven by the market, and thus
the capabilities and resources can be built to fit the market requirements and subsequent
recommendation.
Resources
To analyze the client’s question, we will need to access the following sources of information:
Interviews
· Interview with the client
· Interview with a member of the sales staff
Information from client
· Details of current sales force structure
· Details of the current sales strategy and focus
· Details of current sales persons’ compensation structure
· Sales performance figures
· List of company’s top competitors
External information
· Industry benchmarks
High Level Workplan
Start
Date
End
Date
Activities
Owner
Deliverable
Project Kick-off
Phase 1: Current State Assessment
Present Current State Findings
Checkpoint to Assess Project Progress
Phase 2: Future State Design
Phase 3: Presentation of
Recommendation
Jana
Team
Team
Jen
Team
23-Sep
21-Sep
2-Oct
2-Oct
5-Oct
23-Sep
2-Oct
2-Oct
2-Oct
20-Oct
ppt
Team
21-Oct
21-Oct
ppt
Appendix #1: Issue Tree