Jolson Automotive Case Analysis

Topics: Marketing, European Union, Sales Pages: 15 (3051 words) Published: December 4, 2014
Kimbell 1
Emily Kimbell
3/25/13
MK 4900
Jolson Automotive Hoist, Inc. Case
I. Situation Analysis
Industry
Size of Industry - Sales Dollars/Units
 About 49,000 hoists are sold each year in North America
 The price of a single hoist ranges from $3,000 to $15,000 making the purchase a capital investment
o Using these price ranges, total industry sales can be estimated at $147,000,000 (if each hoist is $3,000) to $735,000,000 (if each hoist is $15,000)  Hoists are purchased by automotive outlets that service and repair cars. This includes: o New-Car Dealers

 New-Car Dealers account for an estimated 30% of all units sold in a given year or 14,700 units per year.
o Used-Car Dealers
o Specialty Shops
o Chains
o Independent Garages
 The hoist industry is divided by two different types: In-Ground and Surface o In-Ground hoists require a pit to be dug "in-ground" where the piston is installed.  These hoists are divided into two types: single-post and multiple post  In-ground lifts accounted for approximately 21% of total North American unit sales or 10,347 units

o Surface lifts were installed on a flat surface, usually concrete  These hoists are divided into four types: two-post, four-post, scissor, and other.
 Surface lifts accounted for approximately 79% of total North American unit sales or 38,925 units.
 Firms purchasing hoists are considered part of the automobile aftermarket industry o This industry is involved in supplying parts and services for new and used cars o The Canadian industry was estimated at $54 billion at retail in 1999 o The industry serviced approximately 14 million cars in Canada

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o The industry consisted of the following type stores:
 Over 4,000 New Car Dealers
 Over 400 Canadian Tire Stores
 Over 100 Firestone and Goodyear Chain Stores
 Over 220 Rust Check Chain Stores
Growth Rate
 Between 1997 - 1999, total Hoist Unit Sales both grew and declined resulting in minimal growth over the three years. (Appendix 1a)
o Between 1997 - 1998, unit sales increased by 4.05%
o Between 1998 - 1999, unit sales decreased by 1.8%
 Between 1997 - 1999, In-ground Hoist Sales both grew and declined resulting in minimal growth over the three years. (Appendix 1b)
o Between 1997 - 1998, unit sales increased by 15.89%
o Between 1998 - 1999, unit sales decreased by 14.55%
o Growth in Multiple Post Sales in 1998 (37.68%) was the cause of the overall growth
 Between 1997 - 1999, Surface Hoist Sales grew over the three years (Appendix 1c) o Between 1997 - 1998, unit sales increased by .67%
o Between 1998 - 1999, unit sales increased by 2.35%
Competition
 Sixteen companies compete in the automotive life market in North America. This includes:
o 4 Canadian firms
o 12 US Firms
 The industry can be considered an oligopoly as two US firms (AHV Lifts and Berne Manufacturing) dominate the industry.
o Together these firms account for 60% of the market
o AHV Lifts account for 40% of the market or $60 million
 AHV Lifts offers a complete line of hoists but focus primarily on the inground market and the two-post surface market.  AHV Lifts competes on price and is the only company that had its own direct sales force

o Berne Manufacturing accounts for 20% of the market
 Berne Manufacturing focus primarily on the in-ground market and the two - post surface market.
 Berne Manufacturing competes on price and uses a combination of wholesales and company salespeople.
 The remaining firms were companies that operated in a regional market and/or offered a limited product line

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Company
Size and Sales / Growth
 During the first year of sales in 1991, Jolson Automotive sold 23 units which equated to $172,500.
 By 1999, company dollar sales had increase over 5500% to $9,708,000 and increased over 4400% to 1,054 units. (Appendix 1d)
 Between 1997 - 1999, dollar and unit sales have increased each year. (Appendix 1e) o The sales growth rate has increased at a...
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