There is some problems show why the company’s profits going down

1. There was little advertising and sales promotion the company has a little spare cash. The company didn’t active support on advertising and sales promotion. The company produces 95% of technically sophisticated electromechanical control devices to the chemical industry. The company thought that they keep going well in chemical industry but their thinking was wrong. With they have skills and ability; they didn’t invest in variety industry.

2. Pricing was done on cost plus basis with total costs being calculated and a fixed percentage added to an account for profits. The accounts department thus fixed prices and sales had no say in how they were established. This led to much dissent among the sales people who constantly argued that prices were not competitive and that if they were cut sales could be increased substantially. Sales people are very important for company. Actually sales people communicate with customers or buyers directly for this reason arguing among sales people is not good for their business.

3. Delivery times were slow compared with the average in the industry and there were few discounts for large orders quantities, with the sales person first have to clear such discounts with accounts before agreeing to such an arrangement. Regarding Watkinson’s philosophy “if they want the product badly enough they will wait for it. And why offer discounts for large quantities if they did not want that many they would not order them.”

These problems strongly affected Mephisto market, so market shares dropped and they became less competitive in the market. In another way responsibility goes back to managers if we want to put the blame on.

SWOT Analysis:

Strengths (internal) * Excellent customer awerness and an image of reliability and quality * Salesforce is