SME Year 1 Sales Case Exam

19 Mar

SME Year 1 Sales Case Exam
1. Answers are due at the start of class (7pm) on Monday, March 19, 2018. We
will be discussing the case in class on March 19th so late exams cannot be
accepted and will receive a grade of zero. It is expected that everyone will
attend the class discussion. In the event of extenuating circumstances, be
sure to email your case answers to by 7pm.
2. Your exam must be an independent effort. You may not jointly answer the
exam questions with another member of the class. Anyone caught violating
this rule will receive a grade of zero on the exam. In fairness to all students,
I will not respond to any questions regarding the exam.
3. Please number your answers and answer the questions in order.
4. Please be as concise as possible. Point form/bullets are acceptable but you
must be sure that you fully explain your reasoning and any assumptions that
you make.
5. Please remember that language clarity, spelling, grammar etc will be
considered in your mark. If you require assistance to ensure that you don’t
sacrifice marks, please make arrangements in advance to ensure that you
don’t miss the deadline to hand in the assignment.
Good luck!
Case Overview:
Mercado is a company based in Palo Alto, California that provides the search and
merchandising technology to power retail web sites. CEO Corey Leibow had just
met with another venture capital (VC) firm in an effort to raise a $26-million round
of financing.
It is June 2008 and Mercado currently offers both on-premise and on-demand or
“software as a service (SaaS)” versions of its applications. Despite the fact that
revenue from both solutions is projected to grow in excess of 80 percent that year,
Leibow found that investors generally pushed back on the company’s hybrid
approach to distribution.
Some VCs want Mercado to focus solely on its traditional enterprise business
based on a perpetual, on-premise licensing model. Other investors preferred to see
Mercado morph into a pure play SaaS company. Leibow knew that he had to make
a decision quickly in order to raise the capital the company needed, but he also
wondered if it was possible to continue pursuing both angles. The choice he makes
will significantly affect Mercado’s sales force and R&D team as well as which
customers the company targeted and how it would attract and retain them.
Exam Questions:
1. Evaluate Leibow’s decision to enter the SMB market with MIOD. What, if
anything, would you have done differently?
2. Design a distribution segmentation model that maximizes both its AE and
ISR sales forces (e.g., by size of customer / by AE for MI and ISR for MIOD
/ geographic teams for AE + ISR). Explain how your segmentation plan
encourages channel harmony and explain the risks and benefits of your
3. Compare the ISR and AE compensation packages. How do these packages
affect the expected behavior?
4. What are the advantages and disadvantages of having one “generalist” R&D
and support team manage both MI and MIOD, versus two specialized
teams? Which approach would you pursue and why?
5. As Corey Leibow, what go-forward strategy would you pursue for Mercado
and why? Explain how the concepts we discussed in the course lead you to
make this decision.

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Posted by on March 19, 2018 in Academic Writing


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