Ingersoll Rand Case Study

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1. Identify all reasons for Ingersoll Rand’s (I-R’s) impressive performance between 1980-1985. In 1982-83, due to industrial recession sales of complete compressors in the US market had declined, yet the number of units sold had gone up by 3,00,000 units which was as a result of intense price competition in the lower horse power range ( especially less 25hp) which accounted for nearly 8,50,000 units in 1985. In 1982, to focus on sales of below 5 hp compressors market directly to institutional customers, a merchandising team had been set up. In 1983, -the cut off for distributor class products was raised to 250 hp for recips and 450 hp for rotaries. This helped them to push sales from their wide network to bring in better performance. In 1984, in order to expand the reach of small hp market, it appointed five manufacturer representatives to sell directly to retail chains. In 1985, Distributor and air center sales to end users and OEM’s accounted for 55% of sales revenues. Ingersoll-Rand had sales of $2.64 Billion in 1985, had manufacturing operations in 16 countries, sales offices in 40 countries, and distribution arrangements in 80 others. 2. What are the highlights of Ingersoll Rand’s method of managing multiple channels? The high-point of Ingersoll Rand’s method of managing multiple channels was the implementation of Full Partner Program. To reduce inter-channel competition I-R managers initiated this Full Partner program where commissions were available to distributors

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