Scenario:
XYZ Widget Company has lost 20% of its market share over the past two years resulting in a sales loss of 1.5 million in 2017 and 2 million in 2018 for a total of $3 million. Each widget costs the consumer $29.99 to purchase, and the average customer will purchase three widgets annually. Each XYZ widget is produced for $8 dollars and is of higher quality than the competition.
One competitor (Jim’s Widgets) in the widget industry with a similar product has increased market share by 12% due to a lower production cost of $4 per unit and price to the consumer of $9.99.
The CEO of XYZ Widget Company is reluctant to lower prices and has had to eliminate commissions and bonuses of sales employees who exceed goals. In addition, seven of the 21-member sales team were laid off for non-performance of sales goals.
Develop an Action Research Strategy Plan covering the following Action Research Phases in a report to the CEO.
Data gathering and Diagnosis
Feedback
Planning Change
Intervention
Evaluation
What are the reasons behind the decrease in sales?
What actions or strategy (data/sales/changes) should be taken to turn sales around and regain market share?
What strategy should be taken to increase employee morale?
How long should this strategy take to complete?