Down East Spud Busters is part of a conglomerate that represents the potato growers of eastern Canada and northern Maine and that also oversees the collection, processing, and distribution of potatoes and potato products. For many years, the industry functioned as a local cooperative. The cooperative was simply a collection center where potatoes were weighed and received, washed and graded, bagged and distributed. Potatoes were the only product. Potatoes were distributed in a variety of bag sizes and weights and were also sold loosely in large bins. The first phase of Down East Spud Busters’ strategic plan resulted in the building of a large manufacturing plant in northern Maine with a focus on value-added products. The major strategy is to process higher-value potato products. Those products include a frozen division line (French fries, home fries, gourmet stuffed potatoes, flavored potato skins, and so on), a dried-food division line (instant mashed potatoes, freeze-dried potatoes, potato pancake mix, and so on), and the traditional potato line (bagged potatoes, loose potatoes, microwave singles, baby pota-toes, and so on). The corporate group figures that it can triple sales revenues from the existing yield of potatoes. The second phase of Down East Spud Busters’ strategic plan calls for a nationwide sales and distribution program. A gigantic market in retail food sales has gone untouched by this group of growers and producers. The major strategy is to recruit the appropriate sales force and to set up a system for selling and distributing the products. The major markets are supermarket chains, smaller retail grocers, major hotel chains, and governmental/school institutional kitchens. Down East Spud Busters is leaning toward the concept of hiring sales associates who will work out of their own homes in strategic locations throughout the United States. Those sales associates will be assigned to specific territories challenged be challenged to meet or exceed specific quotas of each of the conglomerate’s products. The sales associates will also be responsible for overseeing the distribution and delivery of the products, and for dealing with any and all after-sale problems or issues. The third and final phase of Down East Spud Busters’ strategic plan is to build a second manufacturing plant in Idaho in five years and to possibly facilitate and oversee an increase in crop planting and yield in both territories. The company also plans to expand its market territories into selected locations in Europe and the Pacific Rim.
1. Select options from the chapter text, and prepare an organizational chart for the national distribution program that this company is about to embark on. Be sure to incorporate the company’s goals into your overall structure.
2. Given the vast geographic expanse and logistical challenges of this new program, what recommendations do you have for the company regarding HR policies and procedures?
3. What other types of industries could use the model from this case as a means to expand sales nationally or internationally?
