Inner City Paint

Summary:

Inner-City Paint Corporation is a small company that had steady growth. However, the slow down of the housing market in addition to an overall slow down in the economy caused financial difficulties for the company.

Although the company has a few strengths and has a reputation for fast delivery, Mr. Walsh is overlooking a lot of opportunities that could solve his financial problems. He is also very reluctant to change his policies, procedures, management and financial structure which are also negatively affecting his business in terms of growth and development.

Statement of the problem:

What are the strategic steps that Mr. Walsh can make to improve the financial situation and reputation of Inner-City Paint Corporation?

Strategic Factors affecting Inner-City Paint Corporation:

• Environment: Mr. Walsh manages the company the same way he did when he started the company. He doesn’t delegate or empower employees. He also doesn’t have a policy around recruiting and hiring the right employees for the job that is affecting the growth of the company because he can’t trust hiring new salesmen he is losing an opportunity to penetrate the market and getting a bigger share, the same issue exists with hiring unskilled laborers that is affecting his productivity level and the opportunity to serve larger clients and getting larger orders.

• Product: Mr. Walsh didn’t anticipate possible change in the external environment; he also didn’t have a strategic plan for company growth and the steps that he needs to take when his company grows. Therefore, he got lost and couldn’t deal with the problem of slow down in the housing market and economy overall and didn’t have an options. His inventory record keeping is also a major problem that is holding his customers from relying on him for big orders.

• Competition and Market Entry: Inner-City Paint is confronted by aggressive competition in its business. There are small paint manufacturers in Chicago that supply the immediate area. The market for paint is highly competitive. It doesn't compete with giants such as Glidden and DuPont. Competition among the giants isn't that fierce, but they lose their large orders to them.

• Financial Structure: Inner-City Paint is in a difficult financial situation due to the fact that they have to pay their suppliers and taxes and because they didn’t have an audit because Me. Walsh didn’t want to incur the expense of it.

Inner-City Paint Corporation Competencies:

• Price: Inner-City Paint has been able to provide competitive prices for their clients at a higher quality.

• Delivery: Inner-City Paint Corporation supplied paint to contractors within 24 hours and built a reputation of speedy delivery.

• Facilities and Equipment: Mr. Walsh has enough equipment to fill the orders of his clients in addition to facilities at a low rate that can provide him with the ability to be competitive in the market in terms of pricing.

SWOT Analysis:

Strengths • Competitive price

• Fast delivery for contractors

• Steady growth in the market

Weaknesses • Lack of delegation, employee empowerment and operating without management or financial controls

• Lack of a consistent and reliable inventory control system

• Customer perception as a company that negotiates price and unreliable to fill large orders.

Opportunities • Increasing market share by taking larger orders

• Purchasing a computer to organize business and reduce needless paperwork

• Hiring professional salesmen to ensure consistent growth and consultants to identify problems and provide solutions

Threats

• Slowdown in the housing market combined with the slowdown in the overall economy caused financial difficulty for the company.

• Rumors