Presentation Case 02

8/3/2019 Presentation Case 02

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Wayside Industries


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Overview

Wayside Industries was established in 1983 and was located in Saint

John, New Brunswick. They produced non-corrugate boxes forfisheries industries.

Bob Snodgrass was the owner and the president of the company.GuyRichard was the plant manager and the vice president of thecompany. He was also the 20% owner of the company and Bob

Snodgrass owned 80% of the ownership. Guy Richard was the main

strength of the company. Wayside is a very successful company within the institutional market

segment, with an account base that was primarily composed of fishprocessing plants. There was $15 million Atlantic Canadian market fornon-corrugated cardboard packaging. Segments were: fish business,near markets and consumer markets


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PROBLEMS


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Selection of Target Market:

Wayside industries have chosen institutionalsegment as their target market, which operateson low profit margin.

Business cycle of fish industry:

Wayside Industrys main customer in institutional

segment is fish industry. But fish processingindustry is seasonal in nature so profits cant beearned throughout the year.


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Continued..

Production facility Poor production facility of Wayside is

prohibiting its entry into the consumer

segment market. They dont have enoughproduction capacity to produce boxes forconsumer segment after meeting the

demand of institutional segment.


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Contd.

Poor Equipments: Printing equipment used by Wayside are

incapable of producing high quality graphics forpackaging of the boxes used in consumer

segment. Quality Implication:

Quality is another major problem that prohibitedthe entrance of Wayside into the consumer

segment. Double pass technology used by them

produced low quality graphics.


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Contd.

Forecasting demand: Due to the high uncertainty associated with the

fishery business it was difficult for WaysideIndustries to use the forecasted demand to

smooth the production rate.

Labor force:

Due to the uneven demand it was difficult for

Wayside Industry to hold on to their skilledlabors. Because they have to layoff workersduring off-peak season.


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Contd

Inefficient use of plant capacity: Printing capacity of Wayside Industry works as a

limiting factor on utilizing full productioncapacity.

2-bottlelenecks in the manufacturing process

( inefficient die cutter and gluing) made it

impossible to use the full production capacity.


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Contd..

Utilization of labor force: Labor force couldnt be fully utilized

because of the

poor plant layout

the difficulties faced by the labors inhandling the materials

Outdated equipment used in Wayside

Industry


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Contd.

Incompetence of Sales Director

Sales Director seemed to be less

enthusiastic about pursuing marketopportunities outside the fishery market ashe has experience with the institutionalsegment


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Contd.

Problem with Sales and Marketing effort

Wayside Industry relied on its sister distributioncompany ATSCO for its Sales and Marketingefforts

But ATSCO wasnt capable to operate as thesales arm of Wayside Industry

ATSCO doesnt have any packaging expert

which is necessary to operate in consumersegment market.


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Recommendations


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Recommendation (Contd.) Consumer packaging market:

Consumer market is a high growth segment so itwould be easier for Wayside to enter that segment.

Free Trade Agreement resulted in tremendousgrowth in packaged food processing.

The suppliers of consumer market segment alreadyearned a reputation of poor service record and longdelivery times.

The major supplier in this segment is Royal Print. Butthe services provided by Royal Print are inadequate,so it would be easier for Wayside Industry to enterthis segment.


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Recommendation (Contd.) Diversification:

Wayside Industries to go for other segments sothat they dont become fully dependent on fish

industry for their earning of revenue. As a result of

that their business risk will be diversified. Improve Graphic capabilities:

To exploit the market opportunities outside the fish

industry especially in the consumer marketsegment, Wayside Industries need to improve theirgraphic capabilities.


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Recommendation (Contd.) Equipment upgrade:Wayside should upgrade their equipment. To

penetrate that market they require offset lithocapabilities, high level graphics. Also they should

change the existing die cutter and should buyadditional gluing machines that would be needed toaccommodate the growth objectives.

Changes in workforce:Reduction of seasonal workers will give rise tospecialization of labor which in turn will help toimprove the competitive position for the firm.


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Recommendation (Contd.) Infrastructure development:

Some modest improvement would be required in the currentplants infrastructure to accommodate the modernization.These included Structural reinforcement the floor for new production

equipment

Minor roof modifications Additional electrical and plumbing work A new loading dock A modern staff service facility

Near market:Wayside industries also can enter the near market which isconsisting of garment boxes, dairy packaging and bakeryboxes. This segment represents immediate marketopportunities for Wayside because it can be addressed with

the firms existing technology.

Documents

Presentation Case 02