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Fundada en 1987, porJohn Abernathy, actualmente CEO - su esposa, Jean, es actualmente CFO Realiza contratos eléctricos con grandes instalaciones industriales, edificios comerciales y de oficinas, instituciones educativas, obras públicas, y muchos sistemas especializados, entre ellos los servicios de mantenimiento Compite en el sur de California con la industria de contratación eléctrica Empresa reconocida por su excelente servicio al cliente
Industria en crecimiento Regulado por las ciudades y los estados La innovación tecnológica moderada Cambio en el sector de la contratación, debido a la economía Fragmentado
Buck Electric. edificios comerciales. Inc. oficinas.Intensity de Intensidadof laRivalry rivalidad Very high Muy alto Nuevos Competidores Energias alternativas Of buyers: High Alto De compradores: Of suppliers: Medium De proveedores: Medio Bargaining Poder de Power Negociación Proveedores Mayoristas eléctricos Rivals J & J. and Champion Electric..instituciones educativas. sector público y privado Threat of Amenaza de Substitutes Sustitutos None Ninguno Sustitutos Contratistas eléctricos no licenciados Barreras de entrada Bajas . McBride Electric. Power Plus!. Compradores industria. Daniel’s Electrical Construction Co.
1 0.7 0.6 2.5 9.0 30 30 20 0.0 16.5 0.Factors Degree of Regulation Degree of technological innovation Intensity of competition Industry growth rate Size of potential market Weight Rating Product 5 15 0.0 21.0 .8 3.
0 25.5 - 10.5 10.0 Totals .0 74.7 0.0 24.0 0.4 1.Success Factors Management Financial Strength Customer Service Brand Image Marketing Weight Rating Product 15 10 25 35 20 100 0.7 0.5 4.
Price [esp.Quality .Many competitors Basis of competition .Intense competition .Reputation . public sector] .Low barriers to entry .
Daniel’s Electrical Construction Co. A few very large national competitors But they go after large contracts More direct competitors include Buck Electric. McBride Electric. whereas J & J Electric is focused more on commercial and public sector [classrooms] . Power Plus!.. and Champion Electric Buck Electric specializes in solar photovoltaic Most competitors are doing residential construction field.
bringing public buildings up to code. on-time completion. industrial. commercial. and energy conservation incentives . and public-sector electricalcontracting work in the Inland Empire Price-sensitivity is high.• • • • The target market is all residential. initial installation. especially in public-sector bidding Growth rate was high in residential construction in mid-2000s Current customer needs are: quality. price.
and microturbine-power plants Greater demand for networked installations and security systems . due to recession of early 2000s Energy Policy Act of 2005 was passed and. State and local government legislation increasingly addressed code updates for older buildings Population growth was increasing. Declining of commercial and industrial construction. as a result. creating more potential jobs Greater affordability and demand for alternative-energy installations such as solar photovoltaic. fuel cells.
6 5 4 3 2 1 0 2001 2002 2003 2004 2005 .
500 450 400 350 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 .
5 4 3 2 1 0 2001 2002 2003 2004 2005 .
6 0.1 1 0.5 0.8 0.7 0.1 0 2001 2002 2003 2004 2005 .4 0.2 0.3 0.9 0.1.
450 400 350 300 250 200 150 100 50 0 -50 2001 2002 2003 2004 2005 .
80 70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 .
Safe Zone .
82—good working capital • Debt-to-equity ratio is 55%—good financial leverage • Cash is $108M—good for future investment • Z2-Score is 8.57—well in the safe region However… • NIAT declined 20% to $136.The company is in strong financial condition. but NIAT is declining and ACP is too high In 2005… • Revenues increased 2.3 days .9K • ACP is 63.62% • Current ratio is 2.
Strong reputation for integrity. responsibility. and reliability Strong working relationships in the private sector Additional estimator/project manager enabled J&J to bid on larger projects Master Builder software allowed for more precise bidding Ahead in the experience curve Revenues increased 2.6 .62% Cash is $108 Million Z2-Score is 8.
Criteria for Sustainable Competitive Advantage Capability Is this Is this Is this capability capabili capabili valuable? ty rare? ty costly to imitate? Master Builder Software Yes Yes Yes Is this Competitive Performance capability consequences implications nonsubstitutabl e? No Sustainable Abovecompetitive average advantage returns PublicSector Projects Customer Service Yes No No No Competitive Average parity returns Temporary Abovecompetitive average advantage returns Yes Yes No Yes .
alternative-energy-source installations.to private-sector projects No technical expertise in low-voltage applications. Not competitive with price wars in private sector Limited geographic expansion into different markets Low “hit rate” in public-sector bidding (1 in 15) Declining NIAT Very high ACP because of high A/R in publicsector projects High ratio (9:1) of public. or system wiring .
Low barriers to entry Increased price of raw materials Supply shortages .
How can J&J… … expand into private projects? … expand into other sectors and other geographic areas? … keep up with its competitors? .
low-voltage installations. or installation of alternativeenergy-power sources expand into other high-growth areas . … … … … … Should J&J… reduce its ratio of public to private projects? pursue more community-college and university bond projects? become a general contractor? broaden its services offered to include home-audio or security systems.
. 3.1. Reduce ratio of public/private jobs Expand geographically Offer advanced technical services 2.
Become more selective in pursuing public projects But pursue the lucrative community-college and university bond projects Get more residential-remodeling and commercial work Do more market research within the growth areas Form strategic alliances with corporate developments Hire a marketing consultant to help promote the company’s name in the private sector Continue working closely with other general contractors Continue the company’s culture of outstanding service and ethical operations Continue current programs Increase market share Finance through cash and debt .
Expand to other high growth areas in Southern California Expand into Northern California Increase market share Open new locations—one at a time—in developing parts of the Inland Empire Acquire small 1–3 person firms in the right locations that have the right skill sets Continue bidding on school and community-college projects—but now in an expanded area Improve the hit ratio through better estimation of future costs Continue the company’s culture of outstanding service and ethical operations Continue current programs Finance through cash and debt .
Begin offering high-tech services such as home-audio or security systems. low-voltage installations. or alternative-energy-power sources Increase market share Seek and hire individuals (not all at once) with the experience and expertise to install both systems and alternative-energy-power sources Form strategic alliances with manufacturers of alternative-energy-power sources and telecom/network systems Cross-train employees in these new areas Continue current programs Continue the company’s culture of outstanding service and ethical operations Finance with cash and debt .
Expand 3. Reduce ratio of 2.Criteria 1. Offer advanced private/public jobs geographicaly technical services Profitability P 5 5 5 -3 -6 6 7 8 7 -7 -7 8 9 7 9 -7 -4 14 Growth in revenues P Competitive Advantage Investment required P N Overall riskiness N Overall Score .
Increase revenues 15% and NIAT 10% Increase market share Aquire resources necessary to advance technology Raw materials and operation equipment Hire individuals who are experienced in both new and current systems Implement training and development programs Market to new and existing customers Continue the company’s culture of outstanding service and ethical operations Maintain customer loyalty .
causing revenues to lag projections by 15%. then J&J should intensify its marketing efforts . If competition is severe in offering new advanced technical services.
Increase revenues 20%/yr and NIAT 15%/yr Increase market share Offer price incentives for first-time customers Maintain customer loyalty Form strategic alliances with manufacturers of alternative-energy-power sources and telecom/network systems Cross-train employees in these new areas Stay current with the latest technological advances Continue the company’s culture of outstanding service and ethical operations .
then J&J should use R. causing NIAT to lag projections by 15%. If copper-wire costs increase. F. Romex wire instead of electrical conduit .
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