Jones Blair Case

Jones Blair Case

SWOT Analysis:

Strengths

* High quality products

* High quality service with

* Knowledgeable sales representatives that know customers personally

* Mature market 1-2% sales growth long-term

* Shelf goods 43% of total industry dollar sales

* Specialty paint stores & lumberyards most frequently patronized

* Distributes through 200 independent paint stores

* Maintaining margins while increasing R&D, material, & labor costs

* Market to major business/financial center (DFW)

* Total sales/year increasing dollars sales rate 4% each year

Weakness

* Slow sales growth

* Reduce emissions of volatile compounds

* Compliance w/ EPA = low profit margins

* Presence in DFW do it yourself market, in-home centers

* Non-DFW market

* New accounts, only added 5 in last 5 years

* High costs for product

* DFW Sales decreased

* Paint gallon-age hasn't changed in years

* Highest priced paint in service area, especially in DFW

* Awareness of the company

Opportunities

* Need to increase customer awareness by 30%

* Increase demand for paint sundries due to trend towards do it yourself painting

* Interior more popular than exterior

* Expand beyond paint

* Primarily in DFW area, so advertising outside of DFW

* Increase advertising over all mediums, catalogs etc

* Develop new retail accounts leads and penetrations

* Professional painters could solicit business to them

* Discount coupon offers on every purchase after first to build loyalty

* Increase contractor sales

* Number of paint companies are declining at a rate of 2 to 3% a year

* US Paint industry is maturing, over $13 billion in 1997

Threats

* Research & design= low profit margins

* Customers choose store first, then brand

* Companies like Wal-Mart becoming bigger

* Competition from cheaper paint brands

* More options besides painting

* Competition in DFW market

* Competition in non-DFW market

* Sherwin Williams, Benjamin Moore, Sears, Kmart, Home Depot etc., strong brand names & retail department have recently increased competition

PEST:

Politics

* Compliance with governmental regulations is partially responsible for the merger and acquisition activity in the U.S. paint industry since 1990

Economic

* The EPA proposed plan for 25% reduction of VOC in 1996, 35% in 2000, and 45% in 2003, furthering the low profit margins in the paint industry

Social

* Do-it-yourself painters first choose a retail outlet for paint and paint sundries, then choose a paint brand

* 4 Step Buying decision process: decide on project/product, gather information (first from friend/relatives), decide on store, and then decide on product

Technology

* New distribution strategy

* Lack of available technology and the difference in paint formulations for regional climatic needs, a small number of regional paint manufacturers can successfully compete against the nationally distributing paint manufacturers

3 C's:

Consumers

* 200 independent paint stores, lumberyards, & hardware outlets

* 40% of outlets in the DFW area

* Markets paint & sundry items in over 50 states including Texas, Oklahoma, New Mexico, & Louisiana

Competitors

* 60% of sale in architectural coating segment go to Sherwin-Williams, Benjamin Moore, the Glidden unit of Imperial Chemicals, PPG Industries, Valspar Corporation, Grow Group, and Pratt & Lambert

* 50% of sales in the architectural coatings are sold under private controlled, or store brands in Sears, Kmart, Wal-mart, and Home Deport

* Retail outlets outside the DFW area with paint and sundry purchases exceeding $50,000 annually carry only this product line.

* Only 14 outlets in DFW carry the Jones/Blair line exclusively, other carry two or three lines of which Jones Blair is most expensive.

* All other brands in the service area are cheaper than Jones/Blair.

Company

* Architectural paint & allied product sales volume in 1997 was $12 million & new profit before taxes was $1140000

* Dollar sales had increased at an average annual rate of 4% a year over the past decade

* Paint gallonage, has remained stable over the past five years.

* Successful in maintaining margins even with increased research and development, material and labor costs, but could be approaching the threshold on prices.

* Paint cost-of-goods sold, including freight expenses,