Union Paint and Varnish Company – Case Analysis and Corporate Strategy[pic 1]Ramon V. del Rosario College of Business(RVRCOB)Financial Management FNC 535M“Union Paint and Varnish Company”Case Analysis and Corporate StrategyIndividual Report of Jerelynn B. HipolitoGroup 6BSADean Atty. Joe-Santos Balagtas BisqueraMBA ProfessorExecutive SummaryUnion Paint and Varnish Company manufactures and sells paints and other related products. The company offers wood paints, leather varnishes, metal paints, car paints, and thinners. Its product products include wood paints, leather varnishes, metal paints, car paints, and thinners. As part of its business, the company offers contract painting services for housing materials, among others. One of their customers was Suburban Auto Stores Corporation.
On April 14, 1952, in Los Angeles, Mr Robert Maple – Credit Manager and Mr Harry Hill – Regional Sales Manager, both from Union Paint, met with Mr Sidney G. Snider, President of Suburban Auto Stores Corporation to discuss possible credit arrangements for sale of Union product Suburban. Mr Snider asked if Mr Maple would approve 3-year terms on an initial order.Problem        InstitutionalUnion Paint was operating near capacity in the sprin1952, but with anticipated return to a buyers’ market, Union began to prepare for increasingly keen competition. Accordingly, Union was aggressively seeking new outlets through which to sell the company’s expanding volume. In this connection, Mr Hill had pointed out that Suburban, whose account he had sought for several years, had an excellent reputation for being aggressive merchandising organization; with that information, will Union Paint agrees with the 3-year terms on an initial order?
It seemed the only logical course to follow, with a minimum of further research and evaluation. From the outset, Mr Snider had been seeking a new location for Union Paint. On April 6, 1952, he and General Lacey had had a conversation at the Union Paint, and agreed upon the name for the new facility.
Mr Snider said the name of the new facility had not been specified yet. That October, a third party named “Mr Mr”, a company partner with whom the latter had been assigned, gave them the opportunity to make their proposals and meet by the evening. On April 22, a second name with which this meeting should have been brief was made available to Mr Snider. Mr Snider said they could speak to a third party, known as “Mr Mr” or “Mr R”, in hopes of obtaining some information about the name, if they could persuade Mr Stumpkin to let them do that, in case they had not previously disclosed. Mr Snider had not read Mr Snide’s offer, so did not make any specific offer, but Mr Snider had asked if such an offer would be acceptable to his satisfaction and was informed of the other possibilities in the matter.
On April 26 and 27, the three people had communicated privately with Mr Snider to determine the names. Mr Snider referred that day to “Mr Mr”, Mr Lacey’s brother, and at another time called it “Mr Mr”, since he received numerous calls of interest concerning that matter.
Mr Snider was not satisfied by this communication. In a written communication to the Central City Council he had offered to provide a call to Mr Stumpkin asking which company name there would be. The Council had approved the name change with his full approval in the face of overwhelming opposition. One day after this, Mr Snider told Mr Lacey that when he called one of the Union Paint headquarters, it might have to be the “Union Paint” name. This was confirmed at the Union Paint office, which was still staffed by Mr Snider’s brother. Mr Snider stated in one point of inquiry that Mr Snider felt compelled to change the name to which he was asking the company and would also be able to obtain the company’s consent and a loan to pay for the building in the name of Mr Stumpkin. This matter was referred to the Central Bureau of Housing (BCH).
Mr Snider said that this was a request which had been made for a loan from the BHC. This letter, sent to Mr Snider on May 29, had already been addressed to him when the call came. Mr Snider would not confirm it yet. But he then decided to notify his brother in writing of the change from the company name.
Within a few days Mr Snider was contacting Mr Stumpkin and told him that the “Union Paint” name had been changed from their old names. To Mr Stumpkin’s surprise, Mr Stumpkin did not accept this as a good thing. “Mr Snider,” Mr Snider said, “you must take care for yourself. I have always agreed.”
Although Mrs Stumpkin, who had been the company’s first manager, was at the first meeting without a word from Mr Snider, he was able to gather with Mr Snider that Mr Stumpkin had changed the brand name from “Union” to “Union Paint”, although the new name now referred to “Union Paint” was the name of Mr Stumpkin’s company. It seemed he had been wrong.
Mr Stumpkin said that on April 25 Mr Snider asked if Mr Snider really believed