Swisher Mower and Machine Company Case Analysis
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.
Limited product range, few new products
Customer perception of rear vs. front engine design Easy to use
Limited marketing focus to farm supply and garden stores Zero turn without shifting gears
Strong Dealer relationship
Limited advertising and promotions Customer and dealer loyalty
Small company image
Net profit of 10%, strong sales
Remained profitable since company founded
Minimalization of short and long term financing needed
Small company image
Market in mass merchandising stores
Ten different makers of lawn tractors, stiff competition Private label marketing
Gain market share
Expand market coverage
Limited product line
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 price
Gross Profit Margin 650
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.
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 Chains
OPE/ Farm and Equipment & supply Stores
Discount Dept Stores
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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