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An Analysis – File it Supplies Inc.
October 23, 2010
Situational Analysis: File it Supplies Inc (FIS) owns FILEX brand of file folders. The company’s largest customer, Business Center Inc. wants to buy some of FIS’s file folders and sell them under their own name. Business Center has already managed to put its name on more than 45 high-sales-volume office supply products. This is not the first time Business Center Inc has asked FIS to produce file folders that they can market under Business Center Inc’s brand name. Each time in the past they have been denied and they continue to purchase their products from FIS. It has been FIS’s policy to not let other companies re produce their brand. Business Center Inc. accounts for about 30 percent of the marketing manager’s business. There is a concern because local stationers’ businesses are discussing the use of larger wholesale distributors like Staples, Office Max and numerous others. These large suppliers offer the product at a lower price. FIS sells to Business Center Inc, and although FIS is doing considerably well in the market, it is the fear that Business Center Inc will soon be out preformed by other large corporations in the area such as Office Max and Staples because they are not re-sellers and can provide a cheaper priced product. The market situation for FIS is optimistic, but similar to above, the bigger concern is for their largest customer, Business Center Inc. Due to the fact that BCI is the largest consumer of FIS products, FIS is directly dependant on the success of BCI. The folders that BCI is requesting only have a 20 percent gross profit, and if FIS was willing to accept the deal, that 20 percent would be even less because now they are competing against another product. In regards to the competition situation the other highly competitive companies have an advantage of size, but not necessarily customer service.
SWOT Analysis for File it Supplies Inc
Own the majority of the market Able to produce enough product to handle the new business Business Center is good at retailing Good reputation with community and good quality Wide range of products
Another competitor may bring down the overall market value of the product Acceptance of the deal “breaks” current company policy Currently only 20% profit margin with folders for BCI
Produce a second line of product Generate more business overall because BCI will need to purchase more product Create a more competitive market against their own product Better relationship with Business Center Inc.
Competing against themselves Lower overall market price If do not accept could lose BCI’s Business Competing against other large companies (ie Office Max, Staples)
Statement of the Problem: FIS needs to decide what their solution for Business Center Inc’s proposal is. FIS needs to consider the following when they make their decisions; SWOT Analysis, The Four P’s of Marketing and the opportunities that can come from the new product that will be distributed. FIS must not only decide what they need to do about the offer, but they also need to develop a new policy if they are going to accept Business Center Inc’s proposal.
Recommendation, Solution and Rational: The recommendation is that File-It Supplies revoke their current policy and permit Business Center Inc to purchase FILEX under their own brand. File-It Supplies’ current strategy is out of date, and upon evaluation needs to be updated based upon the current market standing.
There is quite a bit of supportive evidence for the point that File-It-Supplies should allow Business Center Inc. the right to sell the FILEX folders under their name. It is important to consider The 4