12 SW Printing

S/W Printing Company – 2007

Tabatha Bellflowers: Francis Marion UniversityKelly SongWinds: Francis Marion University

A. Case Abstract

S/W Printing (www.swprinting.com) is a family-owned business in Florence, South Carolina which has a long and storied history dating back to 1932. The current owners, Steve and Susan Powers purchased in 2001 with the idea of totally re-energizing it as a career legacy for their son, Jason. Since their purchase, the Powers’ family has totally revamped the entire operation to make it more relevant to the current environment, more competitive and more forward positioned. As a result of this new attitude, they have experienced very strong growth each year since their acquisition. They have done this by: investing in new, more efficient equipment; expanding product and service offerings; re-structuring the management and personnel team; increasing marketing and promotion activities and reorganizing all operating procedures.

At this point, they are very well positioned to capitalize on the growing need of the 9-county Pee Dee market in which they operate to serve. They have become the leading provider for a wide variety of printing jobs basing their main competitive advantage on a most effective customer service orientation. Their strategic plan call for continued financial investment in the capital equipment necessary to produce the latest and greatest technological advances in the field of printing. Their sales efforts are directed at adding new and better regular clients to become the printer of choice for large, top-quality consumers. Going forward, son Jason Powers is being trained in all aspects of the operation by dad Steve (sales and marketing) and mom, Sue (financial) to provide a smooth and well-prepared plan of succession when his parents retire.

B. Vision Statement (proposed)

S/W Printing Company is committed to becoming the most trusted and used printing company in the Eastern Carolinas.

C. Mission Statement (actual)

Our mission Is to provide our customers with high quality professional printing services at an affordable price.

(proposed)

S/W Printing Company is committed to establishing and maintaining enduring relationships with new and existing customers thought out the Eastern Carolinas (1,3,5).

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 151

http://www.swprinting.com/

Utilizing state-of-the-art technology and equipment, we endeavor to provide the highest quality professional printing services at competitive prices (2,4,6).

We promote a creative working environment for our talented team of professional sand support staff to foster high quality performance for innovative product and service development (2,6,7,9).

We encourage participation and support of civic and nonprofit organizations within the community (8).

1. Customer2. Products or services3. Markets4. Technology5. Concern for survival, profitability, growth6. Philosophy7. Self-concept8. Concern for public image9. Concern for employees

D. External Audit

Opportunities

1. Florence is has two large regional medical centers, and within 100 miles there are over 1,000 practicing physicians and 15 community hospitals.

2. The Florence metropolitan area is comprised of a college and a university, 255 public schools, and 19 private schools.

3. Within the past five years, new and expanding businesses have invested over $1 million into the region.

4. The use of electronic/digital media is increasing.5. Consumers are turning to the Internet to make purchases.6. Entrance to the industry is limited.7. Local market demand for interior and exterior signage has increased.8. The trend of buying locally has gained popularity.9. Consumers prefer greater control over customized options on purchases.10. The Florence metropolitan area is comprised of 182 churches.11. The Florence Downtown Development Corporation has plans underway to revitalize

the downtown area.

Threats

1. M&M Document Center offers custom printing services and retail products.2. Office Depot and M&M allow customers to create, preview, and place orders online.3. There are 37 commercial printing companies in the Florence, Sumter, and Myrtle

Beach metropolitan areas.


4. As technology advances, the demand for and use of electronic media negatively impacts the printing industry.

5. Printing processes and services are advancing due to new technology.6. Office Depot is the largest Internet office supply retailer.7. Commercial printing equipment costs vary, ranging from the low thousands to several

hundred thousands depending on the condition (new or used), production capacity, or special features of the equipment.

8. Inexpensive home printer/canners/copiers enable consumers to print their own materials.

9. Ink, paper and adhesive cost are increasing 5 to 7 percent.10. Based on the increasing Hispanic population nationwide, Office Depot implemented a

Spanish language website.

CPM – Competitive Profile Matrix

S/W Printing Company

Office Depot M&M Document Center

Critical Success Factors Weight Rating Weighted Score

Rating Weighted Score

Rating Weighted Score

Customer ServiceConsumer LoyaltyAdvertisingManagement ExperienceProduct QualityE-CommerceProduction CapacityOrganizational StructureFinancial PositionPrice

0.150.130.120.110.100.100.090.080.070.05

4214322334

0.600.260.120.440.300.200.180.240.210.20

1243344344

0.150.260.480.330.300.400.360.240.280.20

3313322334

0.450.390.120.330.300.200.180.240.210.20

Total 1.00 2.75 3.00 2.62

External Factor Evaluation (EFE) Matrix

Key External Factors Weight Rating Weighted ScoreOpportunities1. Florence is home to two large regional medical

centers, and within 100 miles there are over 1000 practicing physicians and 15 community hospitals.

0.07 3 0.21

2. The Florence metropolitan area is comprised of a college and a university, 255 public schools, and 19 private schools.

0.07 3 0.21


0.06 1 0.06

4. The use of electronic/digital media is increasing. 0.06 1 0.065. Consumers are turning to the Internet to make

purchases.0.06 3 0.18

6. Entrance to the industry is limited. 0.05 2 0.10


7. Local market demand for interior and exterior signage has increased.

0.04 3 0.12

8. The trend of buying locally has gained popularity.

0.04 2 0.08

9. Consumers prefer greater control over customized options on purchases.

0.03 3 0.09

10. The Florence metropolitan area is comprised of 182 churches.

0.02 1 0.02

11. The Florence Downtown Development Corporation has plans underway to revitalize the downtown area.

0.01 1 0.01

Threats1. M&M Document Center offers custom printing

services and retail products.0.08 4 0.32

2. Office Depot and M&M allow customers to create, preview, and place orders online.

0.08 2 0.16

3. There are 37 commercial printing companies in the Florence, Sumter, and Myrtle Beach metropolitan areas.

0.07 3 0.21


0.06 2 0.12

5. Printing processes and services are advancing due to new technology.

0.06 2 0.12

6. Office Depot is the largest Internet office supply retailer.

0.05 1 0.05

7. Commercial printing equipment costs vary, ranging from the low thousands to several hundred thousands depending on the condition (new or used), production capacity, or special features of the equipment.

0.05 2 0.10


0.02 2 0.04

9. Ink, paper and adhesive cost are increasing 5 to 7 percent.

0.01 1 0.01

10. Based on the increasing Hispanic population nationwide, Office Depot implemented a Spanish language website.

0.01 1 0.01

Total 1.00 2.28

E. Internal Audit

Strengths

1. S/W’s customer base is the numerous health care and educational facilities in Florence and the surrounding area.

2. S/W utilizes top-of-the-line technology and equipment to provide high quality products backed by high quality customer service.

3. The company has experienced substantial and sustained revenue growth in excess of 20 percent since 2001, while industry average is 5-6 percent.


4. S/W’s website allows customers to browse products and services offered, and even submit a price request.

5. As a small, family-owned business, the employees of S/W are more dedicated to the success and longevity of the company.

6. S/W hired a well-known, local, full-time signage graphics designer in October 2007.7. As a smaller firm, they can offer more customized products instead of only templates.8. S/W has adopted a pricing methodology new to the industry that is an all-inclusive

structure, with no separate or distinct fees for typesetting or set-up, which is the industry norm.

9. S/W acts in a socially responsible manner in order to help improve the community and build goodwill.

10. The company is associated with the Florence Downtown Development Corporation, an organization dedicated to the revitalization of downtown Florence.

Weaknesses

1. 85 percent of S/W customers are purchasing products and services from other printing companies.

2. SW has not taken advantage of customer interest in document storage and imaging, or other electronic services.

3. SW does not employ any sales representatives that are responsible for making direct customer contacts.

4. S/W’s current marketing strategy is based solely on the networking abilities of Steve Powers.

5. S/W has not taken full advantage of the space available in the two buildings owned by the company.

6. S/W does not offer any retail products.7. S/W’s online order-entry process is not user friendly, and does not allow for preview

of orders, or a place for changes after the order has been places.8. The location of the shop in downtown Florence does not draw people to the area.9. SW does not actively market to the 182 churches in Florence area.10. S/W’s labor force averages 10-12 employees.

Internal Factor Evaluation (IFE) Matrix

Key Internal Factors Weight Rating WeightedScore

Strengths1. S/W’s customer base is the numerous health care and

educational facilities in Florence and the surrounding area.

0.08 4 0.32


0.07 4 0.28

3. The company has experienced substantial and sustained revenue growth in excess of 20 percent since 2001, wile industry average is 5-6 percent.

0.07 4 0.28



0.06 3 0.18


0.05 3 0.15

6. S/W hired a well-known, local, full-time signage graphics designer in October 2007.

0.05 3 0.15

7. As a smaller firm, they can offer more customized products instead of only templates.

0.04 4 0.16

8. S/W has adopted a pricing methodology new to the industry that is an all-inclusive structure, with no separate or distinct fees for typesetting or set-up, which is the industry norm.

0.03 3 0.09


0.02 3 0.06


0.01 3 0.03

Weaknesses1. 85 percent of S/W customers are purchasing products

and services from other printing companies.0.08 1 0.08


0.07 1 0.07


0.07 2 0.14


0.06 1 0.06


0.06 1 0.06

6. S/W does not offer any retail products. 0.05 1 0.057. S/W’s online order-entry process is not user friendly,

and does not allow for preview of orders, or a place for changes after the order has been places.

0.05 2 0.10

8. The location of the shop in downtown Florence does not draw people to the area.

0.03 2 0.06

9. SW does not actively market to the 182 churches in Florence area.

0.03 2 0.06

10. S/W’s labor force averages 10-12 employees. 0.02 2 0.04TOTAL 1.00 2.42

F. SWOT Strategies

SO Strategies

1. Implement a team of sales representatives to cultivate enduring relationships with new and existing customers (S1, S2, S5, S6, O1, O2, O3, O4, O7).

2. Establish a digital/electronic department that handles document imaging and storing and other electronic services (S1, S2, S4, S5, S7, O1, O2, O4, O5, O9).

3. Increase networking and marketing efforts to the numerous healthcare and educational facilities in the Florence area (S1, S2, S5, O1, O2, O3, O8).


4. Market the availability of custom interior and exterior signage (S6, O7, O8).5. Market the availability of custom designed products (S7, O8, O9).6. Actively participate in the revitalization effort by working with the Florence

Downtown Development Corporation in order to gain local support (S9, S10, O8, O11).

7. Redesign the online order-entry process to make the site more user-friendly for customers (S4, S7, O4, O5, O9).

WO Strategies

1. Establish a digital/electronic department that handles document imaging and storing and other electronic services (W1, W4, W7, O4, O9).

2. Add a line of retail products such as copy paper, envelopes, and general office supplies (W1, W5, W6, O3, O5, O8).

3. Implement a team of sales representatives to cultivate enduring relationships with new and existing customers (W1, W2, W3, W8, W9, O1, O2, O3, O6, O8, O9, O10).

4. Hire more employees as necessary to balance the increasing workload (W2, W4, W10, O6).

5. Redesign the online order-entry process to make the site more user-friendly for customers (W7, O5).

6. Actively participate in the revitalization effort by working with the Florence Downtown Development Corporation in order to gain local support (W8, O8, O11).

7. Increase market share b actively marketing to the numerous churches (W2, W9, O8, O10).

ST Strategies

1. Implement a team of sales representatives to cultivate enduring relationships with new and existing customers (S1, S2, S5, S6, T3, T4, T5).

2. Establish a digital/electronic department that handles document imaging and storing and other electronic services (S1, S2, S4, S5, S7, T1, T2, T4, T5).

3. Redesign the online order-entry process to make the site more user-friendly for customers (S4, S7, T2, T6).

4. Establish a regular maintenance schedule for all equipment 9S3, S5, S7, T5, T7).

WT Strategies

1. Implement a team of sales representatives to cultivate enduring relationships with new and existing customers (W1, W2, W3, W8, W9, T3, T4, T5).

2. Establish a digital/electronic department that handles document imaging and storing and other electronic services (W1, W4, W7, T1, T2, T4, T5).

3. Add a line of retail products such as copy paper, envelopes, and general office supplies (W1, W5, W6, T1, T3, T6, T8).

4. Increase market share by expanding our products and services to meet all of our customers’ needs (W1, W6, T2, T3, T6, T8).


G. SPACE Matrix

6

5

4

3

2

1

-6 -5 -4 -3 -2 -1 1 2 3 4 5 6-1

-2

-3

-4

-5

-6Competitive

IS

ES

CA

FSConservative Aggressive

Defensive

Competitive Advantage (CA)S/W offers a variety of printing services in attempt to meet customers’ varying needs -3S/W offers highly personalized and individualized attention to its customers -1S/W attempts to price its products and services as competitively as possible -2S/W offers pricing estimates for customers that utilize the company’s website -2S/W adopted a new methodology for pricing, an all-inclusive pricing structure, with no separate or distinct fees for typesetting or set-up, which is the industry norm

-2

Industry Strength (IS)Heath care and educational services are the largest customer bases for area printing businesses, and continue to increase in number throughout the area

5

Average industry sales growth is 5-6 percent, yet S/W continues to experience 20 percent growth annually 5Larger, more financially secure companies have the ability to purchase the latest and most advanced machinery to provide printing services quicker and cheaper

3

While S/W has over thirty competitors, new entrants to the market are very limited 4S/W utilize top-of-the-line technology and equipment to provide high quality products backed with higher quality customer service

4

Environmental Stability (ES)As technology advances, the demand and use of electronic media negatively impacts the printing industry -4As technology advances, customers are able to purchase low cost printing machinery to do the work at home

-5


Prices among competitors are very similar as printing customers tend to have high price elasticity -4S/W operates against an estimated 37 competitors in the Florence Sumter, and Myrtle Beach areas -4Downtown Florence is currently under a planned revitalization effort, attracting new businesses, which along with existing companies will need printing services for marketing

-1

Financial Strength (FS)S/W has realized substantial and sustained revenue growth in excess of 20 percent since 2001, with a 28 percent increase from 2005 to 2006

5

S/W’s current ratio is 3.89 4S/W’s debt-to-total assets ratio is 110 percent 2S/W had a gross profit margin of 55 percent, and net profit margin of 2.8 percent in 2006 2S/W’s return on total assets was $0.06 for 2006 1

CA = -2.0 IS = 4.2ES = -3.6 FS = 2.8

x-axis: -2.0 + 4.2 = 2.2y-axis: -3.6 + -2.8 = -0.8Coordinate: (2.2, -0.8)

H. Grand Strategy Matrix

Rapid Market Growth

Quadrant II Quadrant I

Strong Competitive

Position

Slow Market Growth

Weak Competitive

Position

Quadrant III Quadrant IV


I. The Internal-External (IE) Matrix

The IFE Total Weighted Score

Strong Average Weak3.0 to 4.0 2.0 to 2.99 1.0 to 1.99

High I II III

3.0 to 3.99

Medium IV V VI

The EFE Total Weighted Score

2.0 to 2.99

S/W Printing Company

Low VII VIII IX

1.0 to 1.99

Hold and Maintain

J. QSPM

Strategic Alternatives

Key Internal Factors Weight

Hire a Team of Sales Representatives

Offer a Line of Retail Products

Strengths AS TAS AS TAS1. S/W’s customer base is the numerous health care

and educational facilities in Florence and the surrounding area.

0.08 4 0.32 1 0.08


0.07 3 0.21 1 0.07

3. The company has experienced substantial and


sustained revenue growth in excess of 20 percent since 2001, wile industry average is 5-6 percent.

0.07 4 0.28 3 0.21


0.06 1 0.06 4 0.24


0.05 3 0.15 1 0.05

6. S/W hired a well-known, local, full-time signage graphics designer in October 2007.

0.05 4 0.20 1 0.05

7. As a smaller firm, they can offer more customized products instead of only templates.

0.04 4 0.16 1 0.04

8. S/W has adopted a pricing methodology new to the industry that is an all-inclusive structure, with no separate or distinct fees for typesetting or set-up, which is the industry norm.

0.03 4 0.12 1 0.03


0.02 --- --- --- ---


0.01 --- --- --- ---

Weaknesses1. 85 percent of S/W customers are purchasing

products and services from other printing companies.

0.08 4 0.32 3 0.24


0.07 4 0.28 1 0.07


0.07 4 0.28 1 0.07


0.06 3 0.18 2 0.12


0.06 1 0.06 4 0.24

6. S/W does not offer any retail products. 0.05 2 0.10 4 0.207. S/W’s online order-entry process is not user

friendly, and does not allow for preview of orders, or a place for changes after the order has been places.

0.05 1 0.05 4 0.20

8. The location of the shop in downtown Florence does not draw people to the area.

0.03 --- --- --- ---

9. SW does not actively market to the 182 churches in Florence area.

0.03 4 0.12 2 0.06

10. S/W’s labor force averages 10-12 employees. 0.02 --- --- --- ---SUBTOTAL 1.00 2.89 1.97

Hire a Team of Offer a Line of


Key External Factors Weight Sales

RepresentativesRetail Products

Opportunities AS TAS AS TAS1. Florence is home to two large regional medical

centers, and within 100 miles there are over 1000 practicing physicians and 15 community hospitals.

0.07 4 0.28 1 0.07

2. The Florence metropolitan area is comprised of 2 college and universities, 255 public schools, and 19 private schools.

0.07 4 0.28 1 0.07


0.06 4 0.24 2 0.12

4. The use of electronic/digital media is increasing. 0.06 2 0.12 1 0.065. Consumers are turning to the Internet to make

purchases.0.06 3 0.18 2 0.12

6. Entrance to the industry is limited. 0.05 4 0.20 1 0.057. Local market demand for interior and exterior

signage has increased.0.04 3 0.12 1 0.04

8. The trend of buying locally has gained popularity. 0.04 3 0.12 4 0.169. Consumers prefer greater control over customized

options on purchases.0.03 3 0.09 1 0.03

10. The Florence metropolitan area is comprised of 182 churches.

0.02 --- --- --- ---

11. The Florence Downtown Development Corporation has plans underway to revitalize the downtown area.

0.01 --- --- --- ---

Threats1. M&M Document Center offers custom printing

services and retail products.0.08 4 0.32 1 0.08

2. Office Depot and M&M allow customers to create, preview, and place orders online.

0.08 4 0.32 1 0.08

3. There are 37 commercial printing companies in the Florence, Sumter, and Myrtle Beach metropolitan areas.

0.07 4 0.28 2 0.14


0.06 2 0.12 1 0.06

5. Printing processes and services are advancing due to new technology.

0.06 3 0.18 4 0.24

6. Office Depot is the largest Internet office supply retailer.

0.05 --- --- --- ---

7. Commercial printing equipment costs vary, ranging from the low thousands to several hundred thousands depending on the condition (new or used), production capacity, or special features of the equipment.

0.05 --- --- --- ---


0.02 --- --- --- ---

9. Ink, paper and adhesive cost are increasing 5 to 7 percent.

0.01 --- --- --- ---

10. Based on the increasing Hispanic population nationwide, Office Depot implemented a Spanish language website.

0.01--- --- --- ---

SUBTOTAL 2.85 1.32SUM TOTAL ATTRACTIVENESS SCORE 5.74 3.29


K. Recommendations

* Hire two sales representatives with an average salary of $25,000 not including commissions.

* Implement a line of retail products in the store utilizing the additional space available.

L. Epilogue

S/W has made substantial investment in new areas of operating this year. A commercial signage initiative has been begun with banners for buildings, magnetics for automobiles and vinyl lettering for a variety of applications. A bulk mailing machine (and software) has been purchased in order to better serve consumers’ direct mail printing needs. The largest capital expenditure to date has been a large-format, two-color press which will greatly improve color quality, quantity speed and material versatility.

On the cosmetic side, many changes have been made to the retail location to be much more efficient and customer friendly. The front of the ‘shop’ is much more easy for customer to shop, order and more comfortable while waiting. Offices have been added for more departmental privacy and a conference room has been created for meetings with important partners and for larger job discussions. The production area has been rearranged to better accommodate the new equipment and to facilitate more effective work flows. Everything has been cleaned and painted with new shelving added where needed, old storage bins dismantled and windows and doors improved for overall benefit and appearance.


12 SW Printing

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