March 1, 2008
Jones-Blair Case Study
Jones Blair Company is a privately held, regional paint corporation with a market comprised of 50 counties throughout the states of Texas, New Mexico, Oklahoma, and Louisiana. Its headquarters are located in Dallas, Texas, which is also home to the 11 county Dallas-Fortworth greater metropolitan area. These 11 counties represented 50% of total dollar sales for Jones-Blair in 1995 and serve as the business and financial center for the company’s Southwest market. Jones Blair has developed its paints as a premium product with superior reliability and service. They have been able to enjoy relatively high margins and margin stability for the past decade, however management feels that they have reached the pinnacle of their success and without some type of intervention, sales will begin to fall and with it profits will decline and market share will be reduced. The U.S. paint industry is characterized as a maturing industry with sales in 2004 estimated to be over $13 billion divided among three well-defined segments: architectural coatings, original equipment manufacturing (OEM) coatings, and special purpose coatings. Jones Blair has significant operations in two of the market segments with sales of $12 million in architectural coatings and a large OEM division selling products throughout the U.S. and internationally. The architectural paint industry accounts for 43% of the total paint industry with sales of $5.5 billion and is considered a relatively mature market with little growth predicted in the future. Substitute products and increasing quality of paint, which diminishes the time between applications of paint, are the main contributors to the slowing growth rate. In the industry, competition is fiercer than ever, but the trend over the last few decades has been a trimming down of the overall number of competitors in the architectural pain industry. This is generally attributed to larger paint...
Please join StudyMode to read the full document