Sam Marcus decided that small business was his passion along with his business partner Mr. Willam Walters who he had known from his previous days as an undergraduate at Harvard. They had decided to go into business together splitting the company 50/50, Marcus decided it was time to invest in a company known’s as Mike’s cabinetry which was known for customer cabinetry and architectural work. The firm was broken down basically into two different types of segmentation this was the business market and the assembly market.
Sam thinking ahead decided the company will bring around 70 million is sales by the next couple of years; this was a high mark for a small company. On the business aspect this created number of opportunities that would generate a good percentage. The largest commercial market was in retail store fixtures although woodwork is mainly in building executive sweets and offices in buildings the interior components relatively brought in much more between remodeling and construction.
The company was located in Nebraska where the two entrepreneurs had purchased it employing around 100 something workers and was doing initially 6. 8 million in sales. In this business landing major accounts is how you build your brand and this is how CMR enterprises was on the map they had begun subcontracting and remodeling office building and commercial spaces. Commercial work was 2/3 of the industry but 80% of the company was in residential such as building homes and laying foundation.
Marcus and Walter faced a huge obstacle with taking the company, which was started in small a rural town, and expanding the companies worth with much to lose since they were outsiders and didn’t know the industry. Marcus had stated “Increasing profits and cash flows was always at the top of his list” but when taking over a company with large debt from previous owners this presented a minor set back for CMR. The second factor was making sure that the employees were involved in the work that they were doing.
Marcus and Walter wanted them to feel as if what they were building posed some form of satisfaction and ownerships, which was the key to keeping the employees for a long duration of time. Changes in the company were starting to come together, because a lot of the work involved proper coordination and measurements they had began investing in information technology and developing ideas from the information which were being gathered, Marcus also decided the plant in which they had produced the material needed to be improved.
CMR brought in most of their revenue from commercial projects which contractors were bidding to project owners whether or not to accept a job, these tactics were genius because not only did they have the way of building relationships with contractors, they had the opportunities of negotiating bids this was major for the companies growth, Eventually CMR had built a connection with Blackstone which had was generating 2. 4 % of the companies annual sales.
Marcus had decided quickly building a relationship with this company could be beneficial as well as harmful. CMR had stated they wanted to increase revenue 10 times in 10 years by drafting a company model, which would lay the groundwork out. Blackstone helped CMR elevate its sales, but at the sometime created a sudden halt in the residential marketplace segment. Blackstone created a difficult environment for CMR to adapt in because the company would have to standardize its procedures and effect its normal operations. Assumptions and Analysis
In this particular case the past of Mike’s shop seemed to haunt CMR although the company had been proved successful, they could not get away from the small town mentality. Approximately 70 contractors with a minimal mile radius knew that Mikes Cabinetry was the place to go. The company did not place a lot of effort marketing to residential contractors, with many of the choices made by homeowners this had seemed to work for the company. Since this was proven successful building relationships with contractors was extremely important and gaining their loyalty-generated referrals were most of the business had derived from.
As a simple analysis the company’s success had generated from the new sales team and the project management team who began interacting with customers, maintaining and relaying information. However there were many set backs such as the customer not being able to give specific delivery dates which had caused error they have then since learned to ask the right questions and use the information to their advantage. Another major setback would be Blackstone Homes.
Problem Identification Client Requests 1) Blackstone Homes had stated most of the pre finished work and kitchens had come with a pre existing price had been presented early on, this would create a problem for CMR because then the customer would have to go to the showroom and woodwork would have to be crafted according adding prices to CMR, and it would be added to their Bill. Technical Adaptation 2) Marcus was also concerned that focusing on the residential side was not paying off, because not enough information was added into Info Central this did not allow the CFO to roll up financial and operate measurements accordingly.
Setback in company relationship The company’s relationship with Blackstone had declined towards the end because they were rushing to finish and they did not have enough lead time, and many changes were constantly being made, CMR had done many things without paper work and towards the end the projects were late and added $3000-$4000 in extras which didn’t get to Blackstone after the house closings Conclusion Evaluation Internal miscommunication was the major player when it came to closing the deal.
Marcus had insisted that InfoCentral had been used now for everything. The software did not capture the needs of residential business but over many years it had been everything Marcus had hoped for. InfoCentral was able to produce reports showing differences between estimated and actual cost for many of the projects. Too much dismay CMR had realized that when bringing in new company’s you need to become more flexible and encounter issues with pre existing companies and client decisions.
One thing that had been stated was that indirect labor and lower physical prices, residential pulls much more profit and higher margins. CMR was successful but needed to focus on working with clients. Clients are the decision makers and the connection that lies there is very important. Residential clients need more exposure and step-by-step process then select business clients.
In conclusion Marcus had realized for all of its problems Blackstone and the rest of the residential business still contributed a lot of money, which Marcus had used to fund investments. Blackstone had provided steady, profitable income, that could impact the industry heavily as well as the commercial industry. Marcus had grown as a person and realized this experience had changed him in less than two years. Marcus relied on their experience to help him run the business.