Problems Facing John Stone'S Company

Problems facing John Stone's Company

Some of the most pressing issues the company is facing are low liquidity, deficient marketing strategies – accounting for low sales, lack of clear brand positioning, and small presence in the industry – heavy reliance on Dupont, and the presence of a very strong competitor, Carblyn. Given Carblyn's well-established business relationships and it’s the price of its products, which is approximately half of the client's, the company needs to clearly distinguish itself from Carblyn and other players in the industry in order to change the competitive landscape.

The ideal scenario for John Stone's company would be to receive funding from investors from Mr. Moneybags, who John Stone has personally known for years, or angel investors who are willing to take high risks. However, given the unlikelihood of finding such investors, the company would have to look for ways to mitigate its current risks so that it would be able to receive venture capital funding.

Business Strategy

        There are high barriers to entry in this industry, which is why it is important to note the client has acquired intellectual property from Willy that can help the firm differentiate from other firms and their products.

Aggressive Investment in R&D and Marketing

        Sales had insufficiently represented the firm’s superior technology, through which it offers anti-corrosive and environmentally friendly products. As of now, the firm appears to have low control over its sales reps, which is critical given that sales for its products is highly technical. The firm needs to develop a concrete plan for sales to help its representatives perform well in their respective regions. Also, the firm would be able to boost its sales if it were to target a market where customers are more likely to choose environmentally friendly products to receive tax cuts and other government benefits. Upon identifying the market(s), the firm will need to study the competitive landscape of those markets and create a blueprint for successful penetration into the market.

        The firm’s heavy reliance on Dupont may pose a significant risk for the firm, which can potentially prevent new investors from investing or existing investors from making additional investors. Through forming tight relationships with other customers, the firm needs to broaden its customer portfolio so that if the firm was to lose Dupont, which comprise 70% of sales, as a customer, it would not be as affected as it would be now.

        Also, client appears to be hovering around the idea of developing applications for many industries. Client mentioned that vessel head may be a rapid-growth market. The firm can significantly benefit from identifying a couple of industries/markets where they can be successful and investing in R&D so that their product can be far superior to those of other firms. Through this, the firm should also be able to address the issue of its unclear brand positioning and find its niche.