Cima Mountaineering, Inc.
MARK 60013
Case Study #1:
Cima Mountaineering, Inc.
Markus Decker
Kevin Dulac
Erik Frank
Chad Mays
09/24/2002 Introduction
In this case study, our team examines the decisions facing a small western mountain boot manufacturing company, Cima Mountaineering, Inc. This paper will provide a brief overview of the case, including a quick background perspective of the company. We will present the two options given in the case, and examine the four possible alternatives, which exist as possible solutions to the company’s dilemma. For each possible outcome, we will provide detailed analysis of each alternative evaluated against various criteria. Finally, based on the results of the analysis, an overall conclusion will be presented.
Company Background
Cima Mountaineering was founded as the family-owned Hoback Western boot company located in Jackson, Wyoming. The owner’s children, Margaret and Anthony, assumed control of the company in 1975 from their parents, as President and Executive Vice President respectively. In 1978, the company decided to create a new line of mountaineering boots to complement their existing line of western boots, which was enjoying only modest success. In 1981, the company introduced two new boots, a mountaineering boot and a hiking boot, to their product line. A summarized company history timeline is shown in Figure 1. Figure 1 - Company History After a record earnings year in 1994, Margaret and Anthony realized that the market was shifting. They were beginning to lose sales to foreign companies who were introducing low cost, good quality, and stylish hiking boots. At the time of this case, Cima Mountaineering had already lost two key retailers, and sales revenues were beginning to level off. Figure 2 shows the historical sales revenues at Cima. While growth through the late 1980’s and early 1990’s was quite good, recent market studies showed that there were untapped market segments with very attractive
Case Study #1:
Cima Mountaineering, Inc.
Markus Decker
Kevin Dulac
Erik Frank
Chad Mays
09/24/2002 Introduction
In this case study, our team examines the decisions facing a small western mountain boot manufacturing company, Cima Mountaineering, Inc. This paper will provide a brief overview of the case, including a quick background perspective of the company. We will present the two options given in the case, and examine the four possible alternatives, which exist as possible solutions to the company’s dilemma. For each possible outcome, we will provide detailed analysis of each alternative evaluated against various criteria. Finally, based on the results of the analysis, an overall conclusion will be presented.
Company Background
Cima Mountaineering was founded as the family-owned Hoback Western boot company located in Jackson, Wyoming. The owner’s children, Margaret and Anthony, assumed control of the company in 1975 from their parents, as President and Executive Vice President respectively. In 1978, the company decided to create a new line of mountaineering boots to complement their existing line of western boots, which was enjoying only modest success. In 1981, the company introduced two new boots, a mountaineering boot and a hiking boot, to their product line. A summarized company history timeline is shown in Figure 1. Figure 1 - Company History After a record earnings year in 1994, Margaret and Anthony realized that the market was shifting. They were beginning to lose sales to foreign companies who were introducing low cost, good quality, and stylish hiking boots. At the time of this case, Cima Mountaineering had already lost two key retailers, and sales revenues were beginning to level off. Figure 2 shows the historical sales revenues at Cima. While growth through the late 1980’s and early 1990’s was quite good, recent market studies showed that there were untapped market segments with very attractive