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    Becker Textilwerk: Preparation Sheet

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    abeer fatima
    The document discusses Becker Textilwerk, a company that produces specialized fabric. It made a profit of over 100 million euros in 2017 despite economic challenges. It analyzes the effect of matching a competitor's offer to a client named Stein. Matching a 7% discount would result in the highest net sales revenue and profit. Doing so could impact other clients and be affected by demand for other products. Overall, the document recommends Becker match the competitor's offer of 7% to retain Stein as a customer.

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    Becker Textilwerk: Preparation Sheet

    Uploaded by

    abeer fatima
    80 views2 pages
    The document discusses Becker Textilwerk, a company that produces specialized fabric. It made a profit of over 100 million euros in 2017 despite economic challenges. It analyzes the effect of matching a competitor's offer to a client named Stein. Matching a 7% discount would result in the highest net sales revenue and profit. Doing so could impact other clients and be affected by demand for other products. Overall, the document recommends Becker match the competitor's offer of 7% to retain Stein as a customer.

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    R04267

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    The document discusses Becker Textilwerk, a company that produces specialized fabric. It made a profit of over 100 million euros in 2017 despite economic challenges. It analyzes the effect of matching a competitor's offer to a client named Stein. Matching a 7% discount would result in the highest net sales revenue and profit. Doing so could impact other clients and be affected by demand for other products. Overall, the document recommends Becker match the competitor's offer of 7% to retain Stein as a customer.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    80 views2 pages

    Becker Textilwerk: Preparation Sheet

    Uploaded by

    abeer fatima
    The document discusses Becker Textilwerk, a company that produces specialized fabric. It made a profit of over 100 million euros in 2017 despite economic challenges. It analyzes the effect of matching a competitor's offer to a client named Stein. Matching a 7% discount would result in the highest net sales revenue and profit. Doing so could impact other clients and be affected by demand for other products. Overall, the document recommends Becker match the competitor's offer of 7% to retain Stein as a customer.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Becker Textilwerk

    Preparation sheet

    Introduction:
    The Becker business was originally founded in early 1961 and its products include specialized

    fabric with expanded polytetrafluoroethylene (ePTFE) membrane finishes. Observing its

    financial growth, it can be seen that even in the economic crisis in 2017, the company made

    a profit on sales of more than 1.2 billion. All this is possible due to its strong R&D team and

    advanced technology.

    1. Quantify the effect the decision to match the competitor’s offer to Stein on
    Becker’s profits. To do that, compute:

    a) The relevant sales volume


    b) The relevant costs and revenues
    Ans: According to the income tax statement for 2017, the profit of the company was:

    Profit= 100,150,000 €

    Total profit= 100,150,000 €

    Total revenue= 1,250,470,000 €

    According to Margin on Sales to Stein Assuming Average Discounts of 7%, 8%, and 15%

    (2017). At a 7% discount, the Net sales revenue is 62,001,000 € and the Variable cost is

    28,095,000 €. At an 8% discount Net sales revenue is 61,335,000 € and the Variable cost is

    28,095,000 €. At a 15% discount, Net sales revenue is 56,669, 000 € and Variable cost is

    28,095,000 €. It can be analyzed from this data that at a 7% discount, the profit of the

    company is greater as compared to 8% and 15 %. From exhibit 2 it can be analyzed that at


    different product lines, the contribution margin is different whereas, the total average

    margin is 201.16 €. From this product line it is seen that among different products, the

    contribution margin for the product Endurance is 273.38 €. Thus this contribution margin is

    high which recommends for the company that it covers the cost of creating the product and,

    ideally, generates a profit. The higher this ratio, the more money is accessible to cover the

    company's overhead expenses or fixed costs.

    2. Analyze this decision from the perspective of Becker’s competitive position:

    a) Could this decision affect the sales to other clients of Becker?


    b) Could this decision be affected by the demand for other products of
    Becker?
    Ans:
    a) Yes, this decision will affect sales to other clients of Becker as they will also demand

    the discount offered to Stein.

    b) Yes, this decision can be affected by the demand for other products.

    3. Should Becker match the competitor’s offer to Stein?

    Ans: Yes, Becker should match the competitor’s offer to Stein. If Becker match the offer than

    in this way he can retain his customer. Even if he offer 1% increase or can match with the

    offer, Stein will continue to buy from the company.

    Recommendation:

    Thus if in future the company wants to generate more profit, then it is recommended that

    they should offer 7% discount (Becker Textilwerk GmbH1, n.d.).

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