The Metal Tool Box Industry of Western Australia

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The Metal Tool Box Industry of Western Australia
Introduction
This report is a detailed economic analysis of the Sheet Metal Tool Box Industry of Western Australia. In order to accurately analyze this industry and compile this report, the business activities and functions of a leading tool box manufacturer MW Sheet Metal Pty Ltd (MW) have been studied extensively.

In particular, this report concentrates on MW’s operations in Western Australia only and analyzes the current market trends, demand and supply, industry’s competitive structure, current economic issues. And finally it discusses the industry’s economic situation in the next five years and how MW would need to react to cope with these challenges.

Background
MW is primarily a manufacturing company, specializing in designing and manufacturing high quality aluminum tool boxes, trailers and other sheet metal products. The entity first started its operations in Sydney back in 1998 as a sheet metal fabrication workshop manufacturing air-conditioning vents only. A few years later, MW discovered the growing demand for metal tool boxes mainly used by tradesmen on their utility vehicles. MW quickly diverted its focus on designing and manufacturing high quality aluminum tool boxes to cater for the increasingly strong demand.

During the past few years, MW has enjoyed great success and has been able to extend its business from New South Wales to Victoria, Queensland, South Australia and Western Australia. As of today, MW is the leading tool box manufacturer in Australia with 15 factory outlets across Australia and one manufacturing unit in Sydney.

MW is relatively new in the Western Australian market since it only began operating about one year and a half ago. Western Australia has experienced tremendous growth in the recent years and MW has been able to capitalize on the fact that there is no other major manufacturer and supplier of metal tool boxes competing in this market.

Demand and Supply Analysis
Demand
In order to understand the key factors driving the demand, it is important to identify the end consumers. The main purposes of a tool box are to provide storage space and protection for valuable tools from theft and environmental damages. The analysis of MW’s sales records and customer database indicates that tradesmen such as plumbers, tillers, electricians and roofers etc are one of the largest consumers of metal tool boxes in Australian market.

The Western Australian economy has experienced unprecedented rates of growth in recent years due to massive increases in the export of iron ore, natural gas and other minerals to China and India. Mining corporations have amassed huge profits and governments, state and federal, have enjoyed rapidly rising revenues. This boom has resulted in a very strong growth in the construction and manufacturing industries particularly in Western Australia and in fact has led to a crisis in the housing market due to the shortage of houses and offices in the Perth metropolitan area. Consequently, the number of tradesmen and laborers has sharply increased creating a strong demand for tool boxes for the utility vehicles.

There are a number of factors that are directly linked with the increasing metal tool boxes demand. Firstly, as mentioned earlier the building industry and mining industry is growing strongly which is resulting in a higher the number of utility vehicles required by the industry tradesmen. Secondly, due to the shortage of labor, the wages and salaries have increased dramatically, giving the purchasing power, willingness and the ability to the tradesmen to buy high quality metal tool boxes to protect their valuable power tools.

The theft problem is another factor that is creating the demand for tool boxes. The problem is so serious that it leads to an increase in the demand for strong and lockable tool boxes encouraging innovation and creativity in the industry. Another interesting factor is the...
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