REACHING THE BOTTOM:

UNIGLOBE’S LOCAL STORE

DILEMMA-CASE STUDY
Submitted by:

Rohit Yadav-P182B65

Damandeep Singh-
P182B14

Kartik Mehrotra-
P182A20

Chayya Rathi-P182B52
COMPANY PROFILE
• Uniglobe is a consumer goods company operating in Philippines since 1989
• The company was headquartered in US and it had a large customer reach in 5 continents

• Company has a strong presence in terms of consumer goods like healthcare ,beauty care
,paper ,food and beverages.
• The company performed exceedingly well in the year 1996 where the profit rose
unexpectedly to 30%
• Since then the company is relying on high expectations and wants to meet higher goals
year by year
• Uniglobe Sales Operations: 1) Wholesale Trade Division, 2) Small wholesale Trade
Division, 3)International Supermarket Trade Division, 4) SLS Division
 SLS DIVISION
 Introduced in 1995,SLS was designed to create a new distribution channel
and cater rural people
 The company wanted its products to reach to small geographical dispersed
and hard to reach retailers
 The Uniglobe SLS division was managed through 3 national distributors, who
had an exclusive contract with Uniglobe
 Distributors were required to make all capital investments, however
Uniglobe would assist them in training their salesforce and help them in
doing effective and efficient business
 Distributors were paid on the return of investment they had put up in setting
up the warehouses.
 SLS model only accepted cash, therefore the distributors did not have
accounts receivable.
 PROBLEM FACED
 SLS was one of the worst performers in terms of profitability
compared with other trade channels
 SLS provided lower incremental margins despite of volume sales
 The dilemma that Martinez faces every quarter is whether they
would risk pulling out SLS and losing volume sales from this
particular trade channel
 Pulling out of the SLS division would require paying a
compensation the distributers
 The SLS is not performing well because they are paying high
commission to distributor on the investment they had made in
setting up the business.
RECOMMENDED SOLUTION
 As per recommendation, we would suggest the SLS operation to be
incorporated in-house.
 This would provide more control on the channel by UniGlobe, thus
increasing the gross profit margins by 2.5% annually by eliminating
the commission paid to distributers
 Eventually this process would make it more compatible with
UniGlobe’s standard corporate business model
 However, this would involve onetime capital investment and a
increase in fixed costs
 In addition to the above, the ROI would decrease from 15% to 12%