Essay: Selling Products through CompUSA
Q) Mark’s goal was to grow the business. What risks was Mark taking with the decision to discontinue selling products through CompUSA?
A) Mark Dwight purchased a business in jeopardy (Timbuk2) in 2002 and transformed it into a successful venture. After taking over the organization Mark incorporated values of discipline, controlling, product innovation, and production management in the company. Initially, “Mark re-introduced a messenger-style laptop bag offering more features at a lower price point” (When less is more). He accomplished this by outsourcing the production to China to achieve lower cost advantage and signed a deal with the retail chain CompUSA and sold its product through this chain.
On one hand, the sales of the company were increasing and on the other hand, posing problems to the organization. These problems stemmed from the lower profit margins offered to Timbuk2 and the constant production pressures to meet the demanding sales volumes. Even soaring sales were not bringing in healthy revenues to the company because of lower profit margin. The business grew but at the expense of profits, which did not serve the purpose of profit maximization. Therefore, Mark decided to call off the deal with CompUSA and searched for other channels to market his product. By terminating his relationship with CompUSA, Mark assumed a risks of immense proportions. Firstly, he was giving up on an already established product channel. Secondly, he was giving up on a business relationship and that too on the expense of an uncertain future. He would have been in dire straits if he could not have found another channel to market his company’s product. Or in a worse situation, if his alternative strategy to sell his company’s product had not worked. Nonetheless, most successful businessmen always assume risks and all is well that ends well.