GLOBAL SOURCE CASE STUDYHALIL YILDIRIMKTPUF6

GLOBAL SOURCE”S SALE EFFECTIVE?Ineffective due to;

Clients are mainly in North East mostly in New York-%80 of revenue derived from top 3 accounth-which is a sign for high number of unprofitable clients

Hospitals are not confortable to deal with one company for internation and domestic staffing

Global Source does not have a competitive edge as a company in domestic staffing. Cost structure is high due to rationalization

Special Discount for the companies which are signed both for domestic and international contract. Despite People Responsible for international staffing had nothing to gain by negotiating better billing rates for domestic staff. It’s also hard to obtain domestic level sale without offering deep discount. Problem of incentive and rewarding clients.

Inability to Acquiring new contracts – diminishing of return, limited resources of the company, existing contracts were being serviced at a moderate level. Need to increase the level of service for existing clients.

2/3 of all job orders continued to be left unfulfilled due to the same domestic pool of nurses, therapists, and the other allied health professionals. Pool was limited. Competing for the same supply.

At least 100 new sales calls/each day- majority of these being short cold calls. High Pressure on sales personal

Sales people are also account managers maintain a relationship with the client. Despite Global Source has a high turnover rate among sales personal. Thus, when they leave all their good relations with clients are also lost. No Bonus or performance-based incentive down the line for sales people. He couldn’t decide what kind of system due to the characteristics of long run returns of international recruiting and short run of domestic recruiting.

Changes In Sales Strategy

COLD CALLQUALIFY THE

PROSPECT

CONTACT WITH

RELEVANT PERSON

BROCHURES ARE SENT

RECALL FOR BRIEF

MEETING

PROPOSAL SENT-

FOLLOW THE PROCEDURE

Build a reward mechanism to motivate both sales in International and Domestic RecruitingIncrease the sales and services on the existing clients-make them profitable and become the 1 st alternative not 2 nd.Instead of focusing whole country, focus on three region where you can provide excellent service and face to face interactionRestructure the sales process, Account Managers and Sales activity must managed by different personal.Ease the stress on Sales Personal by eliminating the number of call rule instead reward the quality not the quantityDecrease the Employee turn over rate and continiously train your sales personal to increase the effectiveness on the sales process

EVALUATE THE OPTIONS AVAIBLE FOR GLOBAL SOURCE

CONTINUE THE AGRESSIVE ACCOUNT SELLING • Location of New York/New Jersey/ Connecticut – around 500 hospitals which are potential not prospects.• Target = Small, Medium or Large and Healthcare System is a question• Where the Sales Strategy should focus? Domestic or international?• Current Strategy: Nationwide account acquisition strategy; 5764 registered hospitals-much larger pool. Question of

efficiency? Successful sales achieved in tri-state area. Domestic sales can be processed by phone but international sales cannot due to the complexity

• Important domestic travel staffing opportunity; Department of Veterans Affairs VA-163 hospitals• VA awarded contracts through an RFG process, 6 months already spent and can take several months more. Direct mail and

print campaign to recruit nurses by appealing to their sense of patriotism- drawing effort away from international recruitPENETRATE EXISTING ACCOUNTHS• Global Source at best is a secondary vendor.• Salespeople contacts once a week for new openings but most of time spent foe new prospect• Supply side of company is also weak, small pool of nurses divided among 20 domestic staffing clients• In every 3 months only 1-3 nurses placed.• Vendor Rationalization process- low switching cost of Global source in domestic travel staffing• Increase of placements around 5 placement /per hospital in 3 month by greater relation building.• Sales person has to spent much more time to contacting hospitals-also for regular meetings• 4 contracts for international recruitment = 5-10 nurses and 15-20 is attainable.• It needs devotion of time, logistics, due to complexity of international recruiting process

CROSS SELLING EXISTING ACCOUNTS• Obtaining international recruiting will provide domestic staffing as well.• 5 international recruiting can be obtained from %50 of existing domestic staffing clients which will be enough for the

profitability • Clients must be educated about International recruitment, simplify the process• East to sell domestic staffing to international clients than the other way around• A company already expressed interest in establishing strategic alliance with Global Source which s tech based vendor

management system which will provide additional revenue.• Disadvantages; relationship was too fragile and new also may distract the company”s resources time and focus

INTERNATIONAL

Strength And Opportunities• Competitive Advantage in International Staffing • High Margins up to 50-60%• Undiscovered Indian Market Opportunities• Strategic Alliance with a CGFNS test-preparation company in Bangalore• Revenue was not immediately realized. Turnaround time was 10-14 months. Average cost of processing was 7 000 $• Flat Fee: 15 000 – 20 000 per candidate, margins are 50-60%. Some prepayment-half- before stuff arrived. • Around 7,500-10 000$ profit from Fee / Each Candidate Weaknesses / Threats• Hard to understand the local market conditions during the recruiting(India)• Prepayment is hard to be taken due to fraudulent in the sector. Thus, cash flow is struggled in initial process.• Ethical Question; further depleting these countries of already scarce healthcare staff. EU banned• Amelioration of the Nursing Shortage- short term. It’s not easier to sell staff contract when there is more supply of nurses. International Recruitment is under

threat except Global Source’s top clients.

DOMESTIC

Strength and Opportunities• Amelioration of the Nursing Shortage- short term• Cash Flow is continuous and realized quickly. $4000 for every 13-week• Nationwide account acquisition strategy, wide range of placement option will attract nurses Weaknesses and Threat• Internalization threat• Hospitals started to rationalize their vendors. They put pressure on staffing companies to reduce to billing rates.• Short term- large companies have competitive advantage due to their contracts on high rates, despite Global Source unfortunately has to offer low rates for

nurses in lower billing rates. Lack of competitiveness for Global Source will continue until 2004• Massive influx of startup staffing companies with their slim margins and additional benefits for staff.• Low Staffing Margins 10-15%• Very Competitive. It is hard to obtain domestic travel staffing contracts without offering deep discounts. • 2/3 of all job orders continued to be left unfulfilled due to the same domestic pool of nurses, therapists, and the other allied health professionals. Pool was

limited. Competing for the same supply.• Nationwide approach on domestic sales is not efficient, successful sales largely come from tri-state area

Options Recommend to Pursue

• Global Source should continue efforts for international recruiting in expense of domestic recruiting because lack of competitive advantage and huge competitiveness in supply (20 domestic vendor for the same pool) in domestic recruiting are main obstacles. Global Source has low switching cost, secondary vendor and can be replaced anytime to another company. Even though short-term market conditions favors the domestic recruiting with the abundance supply of nurses, situation will change in short term.

• Global Source should also use resources to increase the quality of relationship with existing clients by devotion of more time and efforts from sales personal instead of cold call.

• Company should target large hospitals, which have less price sensitivity.

• Sales activity plays a vital role in Global Source success. Establishing a rewarding system for sales personal to motivate them is a must. Sales personal turnover rates should be lower and they should be trained to be more effective informing the clients about benefits of international recruiting

• International recruiting provides long term fixed agreement with full-time working opportunity, which is 90% of Temporary Staffing Market (Fixed). Market is huge and supply is abundant.

• Cancel the nation wide recruiting and rather penetrate more into tri-state area because Nation Wide recruiting requires excessive cost, time and effort. Moreover successful sales are mainly achieved in tri-state are. In order establish better relations with clients and for possible future cross-selling opportunities like international recruitment offerings, are requiring face-to-face meetings and locational accessibility, which favors the tri-state area over nation wide focus.

• Cross-Selling opportunities must be exploited. Existing domestic clients should be informed about benefits of international recruiting. Global Source should also establish the vendor management technology based software to entrench the position of company.