Jolson Automotive Hoist, Inc. Case
I. Situation Analysis
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 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
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
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%
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
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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