Appendix A. Complete Descriptions of the Activities Selected by the Managers
Appendix A.1. Supplier Management
The certainty that a trading company has that its products will be sold are based on the conditions negotiated with its suppliers, which include:
- The Purchase Price: Obtaining the best purchase price in the market guarantees the trading company that its sales price will not only be competitive, but also will get the widest Margin on sales, giving them a competitive advantage. If eventually there is a need for a price reduction, this can be done more easily than its competition.
- The Selling Margin: By obtaining the best purchase price, the best selling margin is obtained.
- Credit: Obtaining the longest credit term provides room for maneuver if the trading company grants the necessary credentials required by the market.
- Quality: The trading company must review and confirm that the supplier has implemented qualities systems that guarantees that it complies with the technical specifications of the product offered, guarantee supply, and meets delivery times by reviewing its sources of supply or at least an investigation that shows that the raw materials used are available in time and form in the market.
- Supply: This means that the supplier must have the capacity to supply the quantities required by the trading company promptly to avoid the damage caused by losing the sale due to shortages in the customer’s inventory.
- Warranty and Service: The supplier must offer immediate response to customer claims for defects in the product, the replacement of the same, and bear all costs of handling and freight in the process of return and replacement of products.
- Marketing: Nowadays, all suppliers, manufacturers, and distributors have in their budget a sufficient amount to support their customers with financial resources, and in-kind for marketing actions, since these represent the indispensable distribution channel to move their products making them reach the final consumer.
The money support can go from the rent of spaces, for exhibition, or preferential positions, payment of advertising, exclusivity, etc., in-kind can be with promoters personnel to restock the sales floor with merchandise, demonstration-saleswomen to move the merchandise, POP material, exhibitors, promotional campaigns, and others.
- Strategic Alliances: This is the highest level that can be reached in the relationship with suppliers, it is reached when the purchase volumes of the commercial company represent an important percentage of the supplier’s sales in such a way that if the supplier were to lose the client, this would cause disruptions in its operation that would eventually translate into losses.
The benefits of an alliance for the commercial company includes: preferential prices, guaranteed supply, free replacement of merchandise, promotional and advertising support, cashing-kind payments, prizes and incentives, exclusivity in product lines, and market territories, etc. They are frequently formalized with the signing of the corresponding contracts, which are renewable from time to time.
Appendix A.2. Marketing and Sales Management
- Sales Management: The sales generate the income of the commercial enterprise, the security to a great extent that these are given, has its origin in the quality of the negotiation with suppliers, but the other part is complemented with a deep knowledge of the product, the market, and the competition. Among the most important points that the general manager must attend to are the following:
- In-Depth Knowledge of the Wants and Needs of His Customers: There are multiple software tools known as CRM (Customer Relationship Management) that provide all the information regarding the tastes, needs, frequency, and buying habits of the customers in addition to providing complementary valuable and personal information about them such as, names, birth dates, anniversaries, number, and ages of children, etc., which facilitates the company to have personal and close communication with its customers.
- Sales Force: To create, develop, and maintain the quantity and quality of elements necessary for the generation of sales is a fundamental task of the general manager, whether it is a linear or pyramidal structure, on-site or virtual, must maintain permanent attention to the performance of each and every one of its members, always taking care, not only to cover the established objectives but also to meet the needs expressed by its members, through adequate dynamic retribution of performance that includes the granting of incentives to maintain high motivation and satisfaction for their work.
The permanent training in the sales technique, the method and work plan whose objective is the increasing attention of prospects and the coverage of the sales quota must be permanently attended by the General Manager.
- Marketing: The general manager must know and define the customer and consumer profile, what it is like, where is located, where it moves, what places frequents, what is it socioeconomic level, this leads to identifying the target market and to quantify potential market with which will be able to implement.
- The Communication Plan: The target market must know the existence of the commercial company, its products, offer, and service it provides. The quantity, quality, frequency, and intensity of the messages received by the target market will largely determine the level of response to the offer provided by the commercial company, which is translated into: traffic of potential customers (prospects) to the company’s sales floor, phone calls, emails, and other digital media, requesting information and quotations, increasing acceptance of visits from the company’s salesperson, increase in orders and consequently higher sales.
The implementation of a CRM in the company is of great help for the success of the communication plan.
- Media Plan: The selection of the media to be used for communication is very important, so the general manager must apply himself to investigate which are the ones that have a greater impact on the target market depending on the objective of the communication, which may be to provoke immediate sales, increase traffic on the sales floor, fix the commercial brand in the customer’s mind, create loyalty, etc.
Traditional media; press, radio, television, billboards, specialized magazines, flyers, direct mail, tabloids.
Digital Media; websites, social networks, web search engines, influencers, sales chats, and others.
- Competitor Analysis: Daily monitoring of the competition will allow the general manager to know promptly the commercial and promotional actions which will allow him to react adequately to avoid the loss of customers and eventually anticipate better actions, counteracting its main competitors.
- The Selling Price: The determination of the selling price is fundamental for the commercial company as it fixes its competitive position in the market since it can be a low price, equal to or higher than the competition, it impacts directly on the volume of sales and the most important part, it contributes to the gross profit margin that must be sufficient to cover its operating expenses and provide the profit desired by the company.
Appendix A.3. Strategic Planning
The company define well its goals, its aspirations, and how far it wants to go in the medium–long term. It is up to the general manager to visualize the scope, coverage, growth, the position it wishes to have in the market, and the time frame in which it wishes to achieve it.
Setting the direction, determining the objectives, formulating the strategies, allocating the resources, executing the action plan, and inspiring the team is the role of the general manager.
Appendix A.4. General Management
In the broadest sense, the general manager applies the administrative process of planning, organization, direction, and control in all areas of the company implicit in the value chain in what Michael Porter defines as primary activities and costs, as well as the support activities and their costs. The common thread is represented by its internal processes, which must be formulated in a clear, complete, and updated manner at all times.
- The Value Chain: Every commercial enterprise shares the same value chain, starting in the suppliers’ market for the purchase and supply of the goods to be sold, the transportation of the products to the company’s warehouses and the inherent logistics, the safekeeping, rotation, and, if necessary, the movement to the sales floor for display, sale, invoicing and collection, packaging, physical delivery to the sales floor or home delivery and the corresponding logistics, to conclude with warranty support and after-sales service.
In the whole chain, there are several activities that the general manager must be personally involved in, some of them being executed in their totality and permanently, that is to say, they cannot be delegated, for example, the negotiation with the suppliers, while some roles can be delegated, he cannot stop being personally involved.
In each of the processes derived from these activities, the general manager must be involved by executing, delegating, or supervising their correct and timely application.
Appendix A.5. Inventory Management
The commercial enterprise must deliver to the customer a quality product, the product must be at the beginning of its life period, whether it is of short duration such as perishables or long life such as furniture, machinery, and capital goods.
Some long-life products, however, only have a short period of time to be sold, as in the case of fashion items or those that are replaced by the next year’s model, as in the case of automobiles.
Long stays in warehouses or on the sales floor makes them obsolete and discontinued, in addition to the natural deterioration due to the passage of time.
The constant review of rotation, proper management of inventories, and their replenishment to maintain adequate levels and avoid shortages that cause loss of sales is an obligatory function of the general manager.
Appendix A.6. Financial Capital Management (Cash Flow)
The company must have at all times the availability of financial resources to meet its operating needs, the timely payment even in advance to suppliers, the emergency purchase of assets such as the replacement of computer equipment or the repair of transportation equipment, the payment of taxes, personnel settlements and similar require having the liquid capital on hand to cover any requirement; therefore, the planning, collection, application, and control of resources is a daily task of the general manager.
- Operating Expenses: These are disbursements intended to keep the company in operation; they enable the various activities and daily operations to be carried out, without which it would not be possible to achieve the company’s objectives.
The expense is necessary and unavoidable and the resources necessary for this purpose come from the margin provided by sales, so the higher the expense, the lower the margin, hence the importance of maintaining strict control and vigilance in the amount and destination of the expense.
Appendix A.7. Strategy Management
The strategy is how the company decides to compete in the market, it represents the specific actions it takes to serve the market, face the competition, and offer greater value to the customer.
How is it going to differentiate itself from the competition, how is it going to make the market perceive greater value when selecting its offer, how is it going to obtain a competitive advantage?
The strategy for a company as such does not exist, it is created, it is the result of the creativity, ingenuity, knowledge, and experience of the general manager who many times is the same entrepreneur. Of course, many managers decide to imitate the actions of the market leaders, but that makes them followers, places them always behind the competition, and generally in last place.
The planning, design, and implementation of the strategy is a very personal function of the general manager.
Appendix A.8. Quality and Service Management
Delivering quality products implies impeccable execution in every process along the value chain. It is the general manager’s role to ensure that he and his team of collaborators carry out the assigned activities promptly. Planning, process implementation, resource allocation, and close supervision is the task of the general manager.
Appendix A.9. Human Capital Management
The company is its people, the customer deals with people who represent the company and are responsible for fulfilling the company’s promise to the customer by exceeding their expectations.
This is only possible if the team of collaborators is kept at a high level of motivation, committed, and willing to provide solutions.
The primary need is the perception of adequate and sufficient remuneration, but it is not the only one, it also seeks to satisfy the needs of professional development, belonging to a team, recognition, and security of permanence, and growth in the company, among others.
The general manager must create working conditions that meet the expectations of all employees, motivate them, inspire them, and focus on the vision.