ClamDoors Main Objective and the Company Strategy - Research Proposal Example

Insert ClamDoor 1 Executive Summary ClamDoor is a growing company that manufactures superior products, the ClamDoor bulkhead. The company was built 10 years ago. Their goal is to provide high-quality doors to clients at competitive prices increase the market coverage and ensure a gross profit of $67,500. They want to increase production to 158 doors a year, but they opt to outsource production to china, which will reduce production cost and further increase production to 365doors a year. Compared to competitors, they have higher selling price. What distinguishes them is the use of fiberglass while the competitor company Bilco and Gordon Corporation uses steel. The company found out that to increase traffic to ClamDoor.com marketing campaign should be the most efficient idea to implement which will in turn grow direct sales to homeowners. They believe in speed, quality service and investing in high-quality machinery, which increases productivity. A SWOT analysis shows that ClamDoor lack a well-organized manufacturing process, the use of single mold system is incapable of increasing production in case of high demand. Moreover, they products are easy to install, installation tips and guides are always on the website. Products are highly priced compared to their competitors whose prices are much lower. ClamDoor’s lowest priced cellar door is $1,490. Roughly, double the price of the top selling cellar door Bilco Classic Series, Powder Coated Steel Door. A projection shows that they will use a budget of up to $42,000 to make a profit of $48,000. The projections solely depend on the assumptions that the company’s sales will increase, and production cost will reduce. In addition, they make utility by assuming that there will be no interferences from the government and industry regulation, and production will increase. The company strategy understands that technology has changed for the past years and is still changing and perceives that internet strategy must be seriously covered; a good website must be developed immediately. 1.2 Products and Services They manufacture high-quality bulkheads that are 100% weather-tight and energy efficient with 100% fiberglass. The ClamDoors are durable and do not rust, they are easy to install and weigh much less than steel doors (Akyol 4). 1.3 Market Analysis They target homeowners, homebuilders and resellers locally and internationally. In addition, they target local retailers to help improve sells. 1.4 Statement of the Problem ClamDoor’s main objective is to build a brand awareness to expand market share on local and international level. Other objectives are to reduce production costs in order to reduce product cost, to access the total cost of sales through large retailers and increase online orders at their website. ClamDoor wishes to ship their products directly to consumers who purchase their products online. They want to increase production to 100 doors a year, but they opt to outsource production to china, which will reduce production cost. Targeted audiences include homeowners, homebuilders, and resellers. The business problem presented included unsatisfactory traffic on our website ClamDoor.com, sales growth underperforming and high production cost. Lack of an efficient process of manufacturing and reduction in profit margin, when retailers are involved instead of direct sales to consumers or homeowners, were also reported as problems to be tackled (Akyol7). Labor is very expensive since there is a need to train all workers in case technology changes. 1.5 Competition Their competitors are Bilco and Gordon Corporation, which are manufacturing companies. They manufacture similar products with our company. The advantage they have over us is their selling price is very low as compared to ClamDoors. What distinguishes us from them is our use of fiberglass while they use steel (Akyol 12). Bilco manufactures steel doors and sometimes use high-density polyethylene. Prices range from $519 to $870, and they are available in national retailers Do It Best, The Home Depot, Lowe, and Menards. They have a strong distribution through local building supply outlets in all states except Hawaii. Their product is available in 4 powder coat finishes. They have advertisement sites in social media including Facebook, YouTube, LinkedIn, Twitter. They have a strong customer support department which is available from Monday to Friday. They offer a five-year warranty, 1-year finish warranty (Akyol 14). Gordon Corporation manufactures steel bulkhead they have two models RD, which is a flat unit for existing sloped wall and CD, which is a sloped unit for the flat foundation. Prices range from $319 to $419. They have strong distribution through local building supply outlets, and their products are available in national retailers The Home Depot, Lowe’s and Menards. They distribute their products through local building supply outlets. They have Facebook and YouTube accounts. They offer a 5-year product warranty. 1.6 Research Avenues of Research and methodology: The company uses social media site like Facebook, LinkedIn, Instagram and YouTube for advertising the product print media and radio. To increase web traffic (Akyol 23) sent emails to their existing customers with messages like Promotional giveaway- and offer 5-10% discount on email purchase or purchase during the off-season. Follow us on our Facebook and YouTube pages Purchase of keyword search for Google AdWord (Akyol 17) and the company sets maximum bid per word. The site is “pay for click” one only pays when someone clicks on the advert and the company can choose specific days to run their campaign to cut the cost of advertising. Findings The company found out that to increase traffic to ClamDoor.com eMarketing campaign should be the most efficient idea to implement which will in turn grow direct sales to homeowners. Email can be sent to existing customers. Creation of accounts about ClamDoor on social media sites like Twitter, Facebook, YouTube, Instagram, and LinkedIn will help drive traffic to ClamDoor.com to reach homeowners, upscale homebuilder associations both locally and internationally. Use of social media is cheap, many potential customers can be reached locally and globally unlike using print media or radio that is expensive, and target audience may not be extensively reached (Akyol 7). To lower retail prices, production cost need to be reduced to make sure the products become less expensive as compared to the competitors. Outsourcing production to China could eventually reduce production cost. Recommendations: It is recommended as follows; Using social media site proved more effective, a site for ClamDoor needs to be created in Facebook, YouTube LinkedIn, and Instagram. This is cheap and effective since many potential customers can receive the information no matter their destination. Sharing plans of the company with clients and gaining their approval helps increase sells. Creating instruction videos on the installation of ClamDoor and videos of customer testimonials can create a positive image of the item thus increase in sells. The videos can be posted on the created sites on Facebook, YouTube LinkedIn, and Instagram. This is likely to increase website traffic that had gone down. Social campaign must be upgraded to include comparison pictures of ClamDoor bulkhead and steel bulkhead with accompanying message a.ClamDoor Bulkhead b. Steel Bulkhead Our product is Lightweight compared to steel doors. 100% Weathertight& energy-efficient 100% Fiberglass construction Never rusts and maintenance-free Quick and easy to install More Durable eMarketing by sending an email to existing customers is also viable. Promo Emails like this can be posted to customers Inspired by nature Designed to weather the elements Crafted with sailing technology Spring has finally arrived! It is the time the company got to work on that list of home repair projects and replace that old and rusty bulkhead door with a maintenance free ClamDoor fiberglass bulkhead. - creating Google AdWord where you can share costs - organizing home shows and creating search engines for finding home shows (http://10times.com/usa/buildingconstruction/tradeshows). Information about the event will feature on the site including location, date and time and details on the cost of the exhibition. Contact details are also given out in case of questions from interested parties. Application forms are uploaded on the site, and those interested can apply for exhibition. 1.7Implementation Time Lines Social media campaigns are to be done weekly while posts on sites like YouTube, Facebook are updated monthly. Google AdWord initiation may take approximately seven days then it can run throughout the week or on specifically chosen days to cut cost. 1.8 FEATURES & BENEFITS To distinguish the company from the other companies, they produce high-quality doors with fiberglass unlike other companies producing doors using steel which is heavy and less weather proof. They believe in speed, quality service and investing in high-quality machinery, which increases productivity. This will make them more favorable due to high-quality products 1.9 SWOT Analysis Strengths Our products are unique ClamDoor is 100% weather tight & energy-efficient Fiberglass is used in construction More durable as compared to competitor’s doors made from steel. ClamDoor does not rust thus reduction in maintenance fee. ClamDoor weighs much less/3 the weight of steel doors Easy to install, installation tips and guides are always on the website (Akyol 20). Weaknesses Products are highly priced compared to their competitors whose prices are much lower. ClamDoor’s lowest priced cellar door is $1,490. Roughly double the price of the top selling cellar door Bilco Classic Series, Powder Coated Steel Door High manufacturing costs, which result in the low-profit margin and high selling price, thus low sells (Akyol 20). Opportunities An opportunity to acquire exclusive production contract with Major National Contractor/Homebuilding Corporation Toll Brothers. The company has extended Product Warranty, which enables them establish higher value with the consumer when evaluating higher cost sales, consumers will feel confident transacting with the company. Use of more superior material fiberglass unlike the top competitors who use steel in manufacturing their products. Opportunity to improve their internet campaign using Google AdWord / Google KeyWord analytics and the social media campaign, which has gone viral. Their capability to distribute email blast to the customers unlike competitors is higher. (Akyol 20) Threats Competitors have broad distribution channels – top competitors Bilco and Gordon Corporation already have established retail distribution with national retailers like Do It Best, The Home Depot, Lowe, and Menards. The competitors benefit on lower price points; the product ClamDoor is significantly more expensive than its top competitors are three times more. Bilco sells at $519 to $870; Gordon Corporation sells at $319 to $419 while we the ClamDoor sell our product at $1500. ClamDoor lacks a well-organized manufacturing process; the use of single mold system is incapable of increasing production in case of high demand (Akyol 22). 1.10 USE OF FUNDS Company’s budget The company will use its funds to cover manufacturing costs, which include labor, taxes and utilities. The company aims to increase sales by doing advertisement of their products and it involves good funding. Door to be produced- 158 and each will be sold at $1500 (year 1) Doors to be produced-185 each will be sold at cost $1500 (year2) Doors to be produced- 365 each will be sold at $800 (Year 3) (outsourcing to China) (clamdoors.com) Profit/loss statements Particulars Amount of $ Total revenue Less cost Gross profit 276,712 209,212 67,500 Less Expenses Training Advertisement Labor Miscellaneous Electricity Wages and salaries Total Expenses 12,000 7,300 600 250 200 5,192 25,542 Net profit 41,958 Source: clamdoor.com Profit/loss statements for outsourcing to China Particulars Amount in $ Total revenue Less cost(subcontracting) Gross profit 292,000 120,000 172,000 Less Expenses Advertisement Labor Miscellaneous Freight Wages and salaries Total Expenses 7,300 310 250 1695 5,192 99,439 Net profit 72,087 Source: clamdoor.com Cash Flow statements and projections for year 1, 2, and 3 Particulars Amount of $ Year 1 Year 2 Year 3 Total revenue Less cost Gross profit 235,035 179,870 55,165 276,712 209,212 67,500 292,000 120,000 172,000 Training Advertisement Labor per door Freight Miscellaneous per door Electricity per door Wages and salaries Total Expenses Net income 12,000 7,300 600 - 250 200 5,192 25,542 29,623 12,000 7,300 600 - 250 200 5,192 25,542 41,958 - 7,300 310 1,695 250 100 6,500 99,439 72,087 Source: clamdoor.com Assumptions The forecasts are based on assumption that the company’s sales will increase, and production cost will reduce. In addition, they make a clear assumption that there will be no interferences from the government and industry regulation, and production will increase. On the other hand, banking and economic trends will be stable, customer buying trends and orders grows and no decline in supply. Another assumption is the internet, and email-buying trend grows. So far, there is no indication of negative influence on the company’s performance (Akyol 23). 1.11Strategy and implementation The company goal, mission, and vision must be achieved, and the target arrived at. Technology has changed for the past years and is still changing. Internet strategy must be seriously covered; a good website must be developed immediately. It must be a secure and effective site where company’s details on sales, market share and daily operations are conveyed to customers (Soenen 320). Online forms for questions and comments about our company or products are uploaded to the site. The social media campaign is the best tool for marketing, and its implementation must be immediate. Facebook, Instagram and LinkedIn among other sites are most visited and likely, our products, if advertised on them, will receive positive response and customers. Upgrade of the existing websiteClamDoor.com must also be immediate within a week. All our sites must contain success stories and images of ClamDoors with additional instructions on installation of the ClamDoor. Market analysis must be carried out to ensure products get immediate market and additional markets for more production. For a period that takes longer than two months, the company may hire services of sales and marketing team from a renowned marketing firm and best public relations firm. This will boost sales since potential customers will receive a word about ClamDoor from an expert and he/she may ask questions receiving immediate responses. Attending and or organizing home improvement events at least twice a year increases sell since it markets the product extensively (Akyol 23). Marketing materials such as brochures can be printed and distributed. Promotional items like T-Shirts, umbrellas and pens with the company’s logo can be given out to home improvement events. To gain positive perception from the public, participation in charity events and sponsoring sports is necessary. For international customers, the company perceives that shipping of products to their doorstep is necessary and will increase sales. To reduce the cost of production, I recommend the company to outsource the ClamDoor manufacturing to China since local production is too high. 1.12 Future issues To ensure success in manufacturing, modern technology must be put in place. To reduce production cost, there is need to expand the manufacturing process. Mold increase to 2 molds will lead to proficient production. Marketing must be done day by day, and a marketing team must be employed to carry on extensive marketing to increase orders. The company must diverse ways and look for another profitable business idea that can be done in line with the manufacturing. The company must ensure raw materials for manufacturing ClamDoors are produced within the company to reduce the high cost of production. Works Cited Akyol, Şeyda. Social Media and Marketing: Viral Marketing. Academic Journal of Interdisciplinary Studies (2013): n. pag. Web. Soenen, Luc A. THE CONCEPT OF CASH FLOW. Management Decision 11.5 (2010): 314-322. Web. Read More