Jones Blair Company Case Study
Jones-Blair Company, primarily based in the Dallas-Fort Worth (DFW) area, is an established company in the $13 billion US paint industry. A large portion of the maturing paint industry, $10 billion, is established from architectural coatings and the annual growth rate is expected to equal that of general inflation in the coming years. As the growth rate is slowing, the number of paint companies is shrinking at a rate of 2 to 3 percent per year. This decline is due in large part to the slow sales growth, but is also fueled by the necessity for continued expenditures in research & development and recent compliance standards set forth by the EPA. In the coming years, the Jones-Blair Company faces these challenges, as well as those presented by mass merchandisers competing with Jones in current business sectors, as they attempt to exponentially increase company sales growth. In order to reach these business goals at a time when growth is nonexistent, Jones-Blair must take immediate action and increase their sales team and refocus their sales energies. Mass merchandisers pose a serious threat to the future achieved sales levels of Jones-Blair Company. Of the three primary groups of customers, do it yourself - paint contractors
There are a few options to consider when determining how Jones-Blair Company will achieve their business goals of exponentially increasing company sales. One would be to make an additional expenditure in advertising in the DFW area to increase the awareness of the company brand to do-it-yourself painters. Another would be to cut the price in both the DFW and non-DFW areas of all paint products by 20% in order to achieve parity with national paint brands. As well, the company could consider increasing their present sales reps, eight, by an additional representative. Those within the company afraid to step forward and attempt to grow are content maintaining the present business plan and guard margins and control costs. The present plan has increased dollar sales by 4% annually without increasing the amount of gallons sold. In such an instance, increases in sales come with increases in variable costs related to the product. So with a contribution margin of 35% the final dollar amount to hit the bottom line would be minimal and not add significant value to the company. Given that the sales representatives' forecast for the next year does not include increased demand for Jones-Blair paint this is additionally a risky business option. (See exhibit 1) After analyzing the previous options, it is apparently clear that in order to exponentially increase sales the Jones-Blair Company should hire an additional sales representative. The cost of such an addit
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Approximate Word count = 988
Approximate Pages = 4 (250 words per page double spaced)
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