Go Mobile Aligning District Managers and Store Teams Case Solution
What is going mobile’s competitive environment
In retailer business, there was heavy competition due to the fastest growing demand for the mobile phone handsets. Many retailers were competing and using different strategies to get more customers. Nokia and Samsung retailers were market leaders and they were selling products at lower prices. Both the companies had large retail chains and well-trained workforce, with an inclusion of a huge number of customers. For Go Mobile, it was a challenge to set its prices to be more competitive. It was challenging for the company to make a good team and find leaders who would help it in competing with the market rivals. The retailers were selling three products that were mobile devices, sim cards and top ups. Many companies like Airtel and Idea-were providing connection services for which they were charging lower-prices to attract more customers. In India, there were many well-known retailers, one of which was mom-and-pop shop that had dominated the retail industry. The Go mobile’s main competitor was the popular mom and pop stores, to compete with which;Go mobile had to build the entrepreneurial organization where it could engage its customers for sales.(Sandino, 2014)
What is its strategy?
- Modi and Wang’s Go mobile store was opened in Nehru, after operating which, their insights into this business helped them in shaping strategies for the Go market.
- Their first strategy was to provide a high quality of personalized and trustworthy service as compared to Go mobile’s competitors. Their broader range of high-quality handsets and connection services gave the company a competitive edge over its competitors, such as: pop and mom shops.
- The company motivated their staff by providing them with attractive incentives and for giving opportunities to achieve success; the company enforced a zero-tolerance policy for the employees’ unethical behavior.
- Go market also developed an IT system that helped its employees to control the location of stock and cash of each store.
- The company found an opportunity to expand its connect and recharge business, for which, it created Whirlpool, where many mom and shops joined this brand.
- The company increased the number of company-owned stores it planned to launch their handset as well as an online mobile store called Modi talk.
- The company compensated the teams and leaders to enhance its sales and that’s how it had planned to compete with its competitors.
Describe how the team leaders are compensated. Focus on July in stores 8 and 20?
Go mobile store has a team leader, cashier and 11 sales promotional employees placed in different brands. Go market team leader’s incentive plan included commissions of sales, which are adjusted according to products’ sales margins and go market provided additional incentives to the sales promoter who was already getting compensation from his company. It was the element that differentiated Go market from its competitors .It has monetary and non-monetary awards which are given for achievement of targets, including: daily, monthly, quarterly and annually. This also includes penalties for unethical behavior and negligence like missing products, selling products below the authorized price and when the CF forms are delayed e.g. in store 8; the fixed salary of the team leader in July was 6,500 and that of store 20 was 5,500, showing a difference of 1500 Indian Rupees, so the salaries varied from store to store.
Sales in store 20 as of July were 964,459, and in-store 8; saleswere 5, 187,391.The team leaders did not get any bonus in July because they were unable to meet their monthly sales targets. The value of missing items in store 8 is 2,000 and in-store 20 it is 8000, so both of the team leaders would get a penalty for the missing items. There are daily targets assigned for the team leaders.If they meet the daily sales target; they will get the reward.
What are the advantages and disadvantages associated with the compensation scheme
- They used Pay for performance scheme which was directly related to an individual’s performance in business objectives. This scheme is effective in motivating the employees to be committed and to provide exceptional performance and better results. Due to the highly skilled workforce and their performance; Go Market’s profit and sales have increased. Motivated employees tend to work for the company with honestly, which helps the company in retaining its customers.
- Setting pay levels provides the company with clarity regarding the performance of each of its employees,as this scheme helps the managers in retaining the good employees and getting rid of the underperforming employees who are not fit for the job. The Pay based team performance leads the employees to have better coordination with each other, strengthening the teamwork.
- Salary plus commission schemes make the employees to have aggressive behavior, after they get low-income security.
- Due to a diversity in the compensations and the responsibilities of the employees; many employees will perceive the company to be biased.
- In many stores, the employees did not know how their performance was evaluated, due to the fixed salaries in those stores.
- In this scheme, the company was paying fewer incentives as compared to its competitors, due to which many employees did not give their best performances.
- Many employees will lose their trust over the company as they would feel their job will always be at risk…………………….
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