Swisher Mower Case Study

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Swisher Mower and Machine Company Case Analysis
Company History

Swisher Mower and Machine Company is located in Warrensburg Missouri. Max Swisher founded Swisher Mowers in 1945. Max began manufacturing riding mowers in 1956.Max’s ingenuity in riding mowers has not been duplicated. Swisher Mowers was the first to introduce the zero turn radius mowers, the Ride King. Swisher has prided itself in a customer oriented philosophy, which has developed strong relationships with dealers and customers. Swisher wanted to maintain a small company image that developed loyalty from his distributors and customers. This loyalty is seen from SMC in guaranteeing the protection of trade territories when ever possible.

Swot Analysis

Distinct designLimited product range, few new products
Interchangeable partsCustomer perception of rear vs. front engine design Easy to useLimited marketing focus to farm supply and garden stores Zero turn without shifting gearsCyclical industry

Customer orientedSelf insured
Strong Dealer relationshipLimited advertising and promotions Customer and dealer loyaltySmall company image
Net profit of 10%, strong salesSeasonal products
Remained profitable since company founded
Minimalization of short and long term financing needed
Small company image

Market in mass merchandising storesTen different makers of lawn tractors, stiff competition Private label marketing Cyclical industry
Gain market sharePatent expiration
Expand market coverageLimited product line
Sales Analysis
Sales have grown steadily and peaked at 10,000 unit volume in 1966, with the sales at 2 million dollars. Sales have leveled off at 4,250 mowers per year in the 1990’s. In 1995 business has leveled off at 4,200 mowers and earnings of 4.3 million in sales. Sales are cyclical and have periods of decline and growth, following the economy. Sales are seasonal which peak in March, April and May. The Ride King list price is about $650 dollars which is comparable to other riding mowers. The costs of goods sold are parts at $453 dollars and $100 dollars labor. Gross profit margin is about 15%. SMC’s Ride King is comparable in price to other manufactures of like products. Manufacturers list pricePartsLaborTotal CostGross Profit Margin 65045310055314.92%

Sales within the industry are predominantly determined by changes within the economy. If the economy weakens, overall sales within the industry decrease. This cyclical effect can hinder or expand sales for a company, causing many companies to adjust their business strategies. Another cyclical effect arises from changing seasons, which determines when products will be sold. Unit Sales of Riding Lawn Mowers and Lawn tractors: 1974-1994

SMC has a reputation for interchangeable parts in their high quality riding mowers allowing easier maintenance, keeping the customer in mind.SMC mowers typically run for 25 years before needing replacement. Parts are interchangeable with mowers that date back to 1956 .The Trim –Max is a fairly new product that should help diversify SMC’s product mix.

Gross ProfitTotal Sales
Riding Mowers57.80%64%
Replacement Parts29.00%20.00%

Competition and Distribution
Outdoor power equipment is distributed through a variety of different means. National Retail merchandisers account for the largest percentage of sales.

Retail Distribution Of Outdoor Power Equipment ( % of Sales) National and Retail Chains24%
OPE/ Farm and Equipment & supply Stores22%
Lawn/Garden Stores19%
Discount Dept Stores13%
Home Centers10%
Hardware Stores2%

Marketing Analysis
Riding mowers are typically classified as lawn and garden equipment. SMC distributes thru farm supply stores, lawn and garden stores, home centers and hardware stores, which are located in nonmetropolitan areas. About 75% of...
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