The Jones Blair Company Case
Case Review # 2: The Jones Blair Company
Facts of the case
Fact #1 – The case stated that Swisher Mower Company (SMC), which was established in 1945 by Max Swisher, grew steadily with unit volume for SMC riding mowers peaking at 10, 000 units with sales of $2 million in 1966. In the 1990s, the unit volume remained constant with around 4,250 riding mowers per year. Compared with 1,263, 000 unit s ales in riding mowers and tractors industry, SMC only occupied around 0 .3% market share. Max Swisher, the current CEO, thought maintaining a s mall company image had also been an important aspect of his business philosophy, which led to the good personal relations hips with dealers and customers alike.
Fact #2 – SMC produced differentiated products. SMCs flagship product, the Ride King, was credited with the first zero -turning- radius riding mower. SMC also produced a trail – mower called T-44 with a cutting width of 44 inches. Kits, the self- propelled push mower, accounted for 8. 2% of SMCs total sales, though it did not provide a material contribution to the companys gross profits. The replacement parts for mowers posed a good business for SMC, accounting for 20% of the total sales.
Statement of Problem
How to grow the business since sales plateau existed for almost 20 years despite continuous profits? This is what Wayne Swisher had been concerned for several years. In early 1996, Wayne Swisher received a certified letter from a major national retail merchandise chain, inquiring about a private branding arrangement for SMCs line of riding mowers. Wayne had to decide whether or not to accept the proposal as well as the next step to grow SMC.
Below is the analysis of the case identifying areas which needs to be considered in relation to the problem at hand, suggesting possible solutions and recommending the best alternative.
Areas of Consideration
The Preventable Proposal:
Contract: A 2-year contract which could be automatically extended on a year-to-year basis, with price and other terms negotiable then. Also can be terminated by any party with a 6 – month notice.
Product: Minor changes based on Ride King.
Order: An annual order of approximately 8, 200 units, a sample order of 700 standard riding mower units to be delivered in Jan 1997.
Price: FOB; 5% discount on SMCs manufacturers list price for its standard model; Reorders will be at the same price.
Marketing: SMC did not need to make any promotion effort to either the chain or the consumers. In addition,