CMR Enterprises

Presented by : Group 7
Tanay Chitre

G013

Spandana G

G019

Purva Ganediwal

G020

Ankur Gupta

G029

Himank Rathour

G047

Harsh Shah

G052

What shouldCMRdo about the Blackstone

account?

Current Problems were a

matter of Blackstones
internal crisis and CMR had
little control over it

2
A more proactive approach
acknowledging the
problems that persisted

3
Discontinuing the
relationship with
Blackstone in entirety or at
least restructure

Continue with the relationship as it had become largest account with projected
revenues upto $400,000
Significant changes in the agreement: Interaction of CMR managers with other
subcontractors and homeowners because cabinetry is the framework for all other
elements
Re-examining InfoCentrals abilities to cater to residential accounts and suitably
incorporating appropriate features
Increased communication between CMR and Blackstones project managers
Fiscal Year 1998
Reven
Re-evaluating
resource allocation
for major
like Blackstone
This accounts
huge percentage
of 25.46% shows that
ue

Residential

$15960
00

Top 15 Residential
Accounts

$82600
0

Blackstone

$210,3
14

Blackstone Homes is a very important

customer.
If CMR has to achieve its objectives of making
the company scaleable and replicable
business model in this industry, it has to
continue the relationship with Blackstone
Homes.

How much profit is being generated byCMRs

commercial relative to its residential business?By
the Blackstone account?

Profit generated
byBlackStone Account

Profit generated byCMRs

commercial and residential
business Residentia
Commercial
Revenue(1998)
Revenue per Shop
Hour
Shop Hours
Material Cost
SG&A
Shop Cost
Total Cost
Profit
Profit Margin
Shop
rate($/hr)
SG&A

7270000

1596000

89.75
81003
2471800

44.69
35713
414960

34%
2377961
1296045
6145805

26%
522039
571403
1508402

1124195
15%
16
2900000

Budgeted

87598
5%

Actual

Revenue
Revenue per Shop
Hour
Shop Hours
Material Cost
SG&A
Shop Cost

210314

210314

51.78
4062
54682
68792
64987

40.63
5176
54682
68792
82821

Total Cost

188461

206295

21853
10%

4019
2%

Profit
Profit Margin

Microsoft Office
Excel Worksheet

Shop rate($/hr)
SG&A for
Residential

16
522039

WasCMRs decision to initiate a relationship

with Blackstone a good one?

OR

CMR always targeted the large account and the huge volumes of sales order that came
along with it.
CMR when getting into a relationship with Blackstone, didnt account for a strategic fit
between the two organisations.
CMR was just trying to overcome competition and in that bid decided to enter into a
relationship with Blackstone
It didnt account for Blackstone's reputation of being hard on its Subs which through some
research and background check could have been easily established
CMR should have been cautious to avoid situations by defining terms beforehand which it
didnt put up any to please the big customer. The company should have clearly stated its
delivery capabilities and conditions in case there was change requests by Homeowners

What is the nature ofCMRs business? How

does it differ across the two market
segments?

Commercial

Name: CMR Business

Structured

Residential
Name: Mikes Cabinets

Project cycles were long: 6 months

Mainly dealing in residential

carpentry like cupboards, kitchen
and bathroom cabinetry

Evenly spread between new and

remodeled buildings

Operated on referrals and word-ofmouth

Conversion ratio @ 20% only

because of less negotiations

Project cycles were only 4-6 weeks

Based on bidding and contracts

Subcontracting

The Mikes Way helped company

maintain good customer
Target Consumer
relationships and charge a premium
on the service
Commercial

Residential

Home Owner

Primary target

How did theCMR-Blackstone relationship

evolve over time? Highlight important events
and actions that influenced this evolution.

Blackstone Homes
It is one of the largest homebuilders in the area
It was a company that started construction at open areas of land and developed communities
on them right from building streets to installing utilities
They made three types of homes for the consumer
Starter Homes - $120000
Family Homes - $150000-$200000
Luxury Homes - $200000

Key strategy to offer lowest price: Partner with subcontractors, and offer only these options to homeowners

Why should CMR go

it?
for
High
volumes of sale was compelling

Great strategic fit between the two brands

Opportunity to build a scalable, replicable business model
Opportunity to improve processes and expand in the residential market
Processes could be standardized into flexible cells

Blackstone would specify only CMR cabinets in its homes and one project manager from CMR
would work with Blackstone

The evolution of the relationship

Why didCMRpersist in the Blackstone

relationship? How would you remedy such a
situation?

asons for persisting in the Blackstone relationship

Provides steady profitable income that could moderate the impact
of any wild swings in income
Biggest customer in the area both huge opportunity for
immediate market share
Revenues of $400,000 annually, hence so far the largest CMR
account.
High growth plan
Steady revenues 25% of their business comes from Blackstone
Can play a major role in reaching the target sale of $70 million by
2007

One can remedy the situation

by:
Increased use of mass customization

All residentials handled by Mikes Cabinets should be handled by CMR and only customers who
want bespoke cabinets should be sent to Mikes
Scrape the existing allowance scheme
Improving partnership between CMR and Blackstone:
Understanding the process at Blackstone and suggest ways to improve it
Explaining the reasons and the need for the price increase by CMR to Blackstone
Increased use of united information channels
Relationship manager only responsible for Blackstone account
Greater use of software for information sharing
Reworking the flow of information between CMR & Blackstone
Improving transparency and tractability
Updating the Info Central for all internal communications by the residential team for easy
analysis of customers and funds coming from customers