Information provided

Tiger currently sells its footwear through its own retailer network of 36 stores, plus 2

outlet locations at which they sell factory rejected shoes that did not meet the aesthetic standards

of Tiger's stringent quality control screening, as well as the regular, first-run boots sold at the

retailer stores. The outlets sell the sub-standard boots at as low at 50% of the original retail cost,

and so these outlets see quite a bit of business from bargain hunting shoppers. Each retail

location has one manager, two full-time salespersons, and 2 part-time salespersons. The parttime

workers equate to 0.3 full-time workers each in terms of pay, hours of work, and benefits.

The outlets each have a single manager, 5 full-time, and 5 part-time salespersons. The revenues

for the retail stores work out to roughly $200,000 per full-time equivalent (FTE), whereas the

clearance outlets sell $250,000 per FTE because they are so much busier.

Tiger Boots are priced at the top end of the market for work boots and shoes. The average

price for a pair of Tiger Boots is around $300, with a range from $250 to roughly $450 for the

company's products, whereas many of their competitors in the boot/shoe industry price their

products at $100 or less.

The market for work boots has been steady over the past 25 years, but the industry has

seen an uptick from the fashion industry, where a new market niche of urban-cool fashion has

made Tiger work boots something of a phenomenon. Photos of celebrities wearing Tiger boots

float around the internet, and Tiger has seen an increase in sales of roughly 15% every year for

the past 5 years, and expects this trend to continue for another 5 to 10 years. Dave Davenport,

CEO, believes that this represents a tremendous opportunity for Tiger Brand Boots to enter a

new market and become a bigger company. Preet Gupta, the head of marketing is not so

convinced; she points out that in order to develop this market, Tiger will need to adopt an

entirely new marketing strategy, to say nothing about the differences in boot and shoe design

between the construction market and the casual menswear market. Do buyers in the casual

market really want a steel-toed dress shoe? On top of all this, the cost of leather is increasing due

to the increased global demand for leather goods. Tiger's boots are currently double the cost of

the average buyer's boot/shoe. As the cost of production continues to increase, will Tiger have to

price itself out of the market altogether, or cut its quality to better compete with the lower end of

the market

Dave believes that Tiger can meet these challenges in a number of ways. Costs will need

to be reduced, but quality must stay at the forefront of what Tiger produces. Dave believes that

the current manufacturing process can be made much more efficient by reducing the number of

plants that produce Tiger boots from 3 to 1. When Tiger first started business in the early 20th

century, it made sense to have plants located in the northwest, eastern, and southern United

States to design boots for the kinds of work skilled tradespeople did in these different parts of the

country and to efficiently transport the goods to retailer stores. However, the cost and ease of

transporting goods around the world, and the internet have made both these practices obsolete.

Dave believes that an investment in retooling and expanding the original plant in Massachusetts,

and then moving all production to this plant will save Tiger roughly 10% in costs every year

while maintaining Tiger's roots in Massachusetts. Another scenario he is considering is

shuttering all 3 plants and moving production to Spain. Spain has a highly skilled workforce for

shoemaking, and is currently a major worldwide producer of quality footwear for many of the

world's largest and highest quality footwear manufacturers. A plant in Spain would cut costs by

roughly 17% and position Tiger Boots to gain better access to the European market. These two

benefits to moving production to Spain could position Tiger to double its current yearly profit in

less than 10 years.

My question

How do you forecast the demand for salespersons at the retail stores for the next 5 years with this given information.