Puritan Drug

Executive Summary

On 1984, David Thomas, who was one of the dozen young employees whom Richard Topping had brought into the New York office as assistants to the top sales executives, transferred to the Syracuse Division of the Puritan Drug Company as a divisional manager, because his predecessor, Harry Schultz died after 15 years of work in the company. The Syracuse Division was one of the 74 wholesale drug division in the Unites States by the firm. Each division acted as a functionally autonomous unit, maintaining its own warehouse, sales, buying, and accounting account department. The division sold approximately 18,000 items to retail druggist.

After the first month as divisional manager, Thomas found the first problem, one of his executives sales man, Harvey Brooks, announced his retire of the company effective the next month.

At the same time, the division was operated profitable since 1964, id had not shown a profit on sales equal to the average for the other wholesale drug division of Puritan Drug. Although the last 10 years the net sales of the division rose each year, Syracuse was below both the median and the mean for other division. While the market for wholesale purchase of retail drugstores held by Puritan Drug was 20.05%, the other division were 48% of share.

Since Thomas assumed his new job as a divisional manager, he had devoted four days a week to travel with the nine sales reps and four trainees, and know how works each reps, and take advantage in knowing the company's customers. Each sales reps has his own commission rate, which depends in customers, time in the company, and sales.

One morning, Clifford Nelson, who is one of the sales reps, went to the office of Thomas to talk about Harvey Brooks and his announced. Nelson and Brooks built this customers together and he don't want to lose them. Actually years ago, both reps spoke