The establishment of an effective model of leading business in the organization can be seen as one of the main factors in providing the company a long and successful existence. In that regard, it is not enough for a corporation to be a leading manufacturer of a quality product, where the ability to sell such product is an aspect, which importance cannot be overrated. Understanding the needs and wants of market, and finding a corresponding strategy to fulfill these needs can be seen as important as maintaining quality and innovation in the process of manufacturing and production. In that regard, this paper analyzes the business model in general, and the selling structure in particular, based on the case study “Personal Selling at the Lear Corporation”.
In addressing the selling aspect of the company, the main role is played by the sales force, which purpose can be seen through serving as “the critical link between a company, and its customers” (Kotler 780). In that regard, the classification of various products and integrating several product lines led to that there some structures being adopted. The structures are: a generalist structure, market-based structure, product-based structure, activity-based structure, and a hybrid structure of two or more of the previous types (Zoltners, Sinha and Zoltners 117). Generally, the structure is customer oriented, where the sales teams are specialized in selling only to certain customers and industries.
The type of structure used in the Lear Corporation can be classified as market-based structure, in which such structure implies that the main focus of the sales is the customer, and at the same time the effectiveness of such sales force structure is directly related to the company’s knowledge of their customers. In that regard, it can be stated that the selection of such structure as well as the structure’s main attributes was influential in both the company’s success and failure.
On the one hand, the specialization on specific markets, led to that the Lear being able to deliver the size of the sales teams corresponding to the size of the market. This was specifically evident through the structuring the divisions of the company to meet the demands specific customers, e.g. Ford division, General Motors division, etc. Such structuring allowed the company to get exclusive contracts from customers.
On the other hand, such devotion led to that the company putting major investments to become a total supplier, while the customers might abandon the strategy of relying on a single supplier. Additionally, such structure might lead conflict related to the marketing organizations, where the product marketing strategy implies working with several sales teams, which at the same time put difficulties in terms of measuring the effectiveness, where individual contribution of the salesperson would be difficult to separate.
It can be stated that team selling has a small role in the aforementioned strategy, where the separation of the company’s activities into complete divisions-platforms comprising of different teams such as engineers, program managers and others, resulted in that the salespeople teams are only a part of such division. Additionally, as admitted by the company, the salespeople are not selling, rather than serving as consultants who work with the customers as a part of a larger team. Accordingly, it should be mentioned that despite the fact that such strategy worked for the corporation in the past, Lear should consider making changes in such strategy.
It can be seen that sales approaches are mostly similar between different divisions, and thus, it can be seen that the responses of the salespersons’ team are mostly similar. In that regard, taking the mixed Sales Force structure, where building a team will be based on a mix of activities. In that regard, the team structure should make sure that the individual contribution of the team is not lost. The initial role of the team was successful, but carried a possibility for the company to suffer losses for their dedication to a particular customer.
Interior Systems Division
The selling of the interior systems division might result in the company shifting toward the product-based structure, where the selling process will imply “differentiating lines” (Zoltners, Sinha and Zoltners 117). As the remaining two divisions in the company are the seating division and the electronics division, it can be assumed that the products will be differentiated and approached separately, rather than implementing a homogenous approach selling both products with a single team. Such approach can be apparent through the division of the product lines on the company’s corporate website, where the homepage of the company provides separate directions for different divisions of the company, each with their line of products (Lear Corporation). Although both web pages provide cross referencing between them, and a single financial report, it can be assumed that they are approached differently, due to their differentiation.
The recommendations for Lear Corporation can be seen through implementing an adaptive approach Sales Force Structure, which will remain focused on customers, although on a wider scale toward target customers. The latter can be explained through the differentiation based on common needs of the customers rather than customers as organizations, e.g. differentiation not between Ford and General Motors, but between groups of products, classes, automobiles subtypes, sizes, etc. In that regard, most diverse needs, i.e. the needs that cannot be combined, would be divided into separate segment needs. It should be noted that such differentiation will make the company less dependable on a specific brand, and accordingly less influenced by the misfortunes and the financial problems a particular automotive company is going through. Accordingly, the steps for implementation of the adaptive approach will be summarized as follows (Laundry et al.):
- The development of segment needs
- Sales Roles definition – these steps imply that there would be different approaches required for different customers. It can be seen that different approaches would be rather implemented in different division of the company, i.e. seating and electronics. For example, seating might require individual sales approach for customization companies, serving individual orders, while the electronics division might take OEM sales approach, or vice versa.
- Establishing the management mode and structure –This step addresses the issue of establishing the level of organizational control to keep the Sales Force structure manageable. It should be mentioned that the current management approach in the Corporation, where each division will be operated as its profit center, although not based on separate automotive brand.
- Establishing detail call standards and strategies – a detail list of activities, responsibilities and critical decisions that should be outlined and accordingly, a detailed benchmark established to manage each. The latter can be used for evaluations and improvements. In that regard, setting standards for evaluation will be beneficial, so that the contribution of each sales team would be recognizable and areas of improvements are easier to identify.
- Configuration of the Sales Force and resources –a step required to match the capacity of each team as well as their resources to specific activities and segments. Such step will act as a proof against instances, in which large capital investments are made for activities that are no longer needed, such as the case for the $586 million spent on capital investment, after which the customer chose to abandon the strategy “of sourcing all vehicle-interior components to one supplier”.
Adaptation is a necessity in the constantly changing world, and in that regard, it should be stated that adaptation should not be considered as an isolated event, rather than a constant approach to increase competitiveness, and reduce the possibilities for suffering losses due to mismanagement.
This paper reviews the selling structure in the Lear Corporation, analyzing the existent structure, the role of the teams, and the selling of their interior division as well as providing recommendations that would help the company t manage its difficulties. The recommendations comprised of the steps necessary for the company to implement the adaptive Sales Force Structure. The main advantage for such approach can be seen through helping the company to cope with the changes in the business activities, which might be caused by internal or external factors.
Lear Corporation. “Lear Corporation”. 2009. Lear.com. Web.
Kotler, Philip. Principles of Marketing. 5th European ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2008. Print.
Laundry, Edward, et al. “The Adaptive Sales Force”. 2007. Booz Allen Hamilton Inc. Web.
Zoltners, Andris A., Prabhakant Sinha, and Greggor A. Zoltners. The Complete Guide to Accelerating Sales Force Performance. New York: AMACOM, 2001. Print.