Industrial Equipment Case

1997 words 8 pages
Industrial Equipment INC.
Table of Contents

Problem Identification 1
Internal Analysis 2
Strengths 2
Weaknesses 3
External Analysis 3
Opportunities 3
Threats 4
Alternative Strategies 5
Strategy 1 5
Strategy 2 5
Strategy 3 6
Recommended Strategy 7
Implementation Plan 8
Appendix A: Gantt Chart 10

Problem Identification

Industrial Equipment INC. sold and serviced a variety of industrial equipment and related products to hospitals, nursing homes, hotels, motels and various other organizations in the four Atlantic Canadian provinces of New Brunswick, Nova Scotia, PEI and Newfoundland/Labrador. In addition to distributing a broad line of specialized equipment IE provided design, specification and planning assistance to architects,
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Opportunities do exist for the business based of the expected increase in the market. However there are many threats that are likely to hinder the growth potential of the company. In order to grow and to increase profitability Mr. Costello will have to devise strategies that differentiate his business, so that it can grow in the long term.
Alternative Strategies

Strategy 1: Buy Hines Equipment

The first alternative strategy for Jim Costello is to go ahead and buy Hines Equipment. Hines equipment is IE’s most direct competitor in the region. Purchasing Hines would give IE more market share thus providing it more control from its distributors in the region. Even after losing half its sales Hines has maintained a constant profit margin over the period. Purchasing Hines and merging it with IE will reduce significant expenses such as marketing, wages and others as IE already has these in place and would not need duplication. This is likely to increase the company’s margins. Due to the extreme similarity in the businesses no training will be required. Alternative 2: Buy Metro Service

The second alternative strategy for Jim Costello is to buy Metro Service. With Industrial Equipment (IE) and Hines Equipment being the only two equipment distributors that focused on after sales equipment it was very important for Jim to hold on to this advantage. Currently, Metro Service was in the

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