Stacey Tile Case Study

Topics: Tile, Management, Kiln Pages: 8 (1922 words) Published: May 14, 2009

Stacey Tile Company

Case adapted by Richard Bery and analyzed by Luminita Tudor

1. SWOT analysis of Stacey Tile Company

+ competitive advantage: the position of the location - within a radius of 500 km which represents 60% of the U.S. market of floor & wall tile (its biggest assest) +/- one operational tunnel kiln
+ good production manager with over 10 years in the company (Mr. Henley) +/- financial capacity of Mr. Gilbert
+ Mr. Gilbert’s experience
+/- Mr. Gilbert’s motivation
+/- equipment for glazing ¼ of the production

no fans; wooden floor (dust)
no improvements of the factory building
low number of trained workers
high level of payables (including mortgage)
-/+ no MIS system (inventories); visual control for production planning +/- equipment for glazing ¼ of the production

+/- increasing market for wall tile – strong demand
+ higher prices for wall tile
+ production of high quality wall tiles - differentiation / specialization + higher entry barrier for wall tile – higher margins

high competition
low price for floor tile
low entry barrier for floor tiles
extensive advertising for substitutes (glass, linoleum & cork)

2. Stacey Tile’s Mission

Concentrate production on high quality/colored wall tiles
Concentrate sales efforts on tile setters.

How will its MISSION be achieved?

Take advantage of the housing construction increase impact on the sale of tiles – Summer 1987 Low entry barriers in the floor tiles segment versus the wall tiles segment (Use of more expensive equipment, better trained workforce and a more skillful management of resources) Contrary to wholesalers, tile setters do not seek quantity discounts and favor a low-pricing strategy

Gilbert’s Intentions:

Hire competent workers and managers to improve quality
Obtain a higher selling price by going directly to tile setters Adopt a 2% discount/15 days payment policy
Purchase raw materials as cheaply as possible (same as competitors) Develop a strong management team

3. Analysis of Mr. Gilbert (Fayol):

Mr. Gilbert’s plans go for the full modernization of the company, for having it operating efficiently, resulting in selling high-quality products. He changes his plans as he goes along (ex. Letter April requesting for investing in a second tunnel kiln); From the staff point of view, he plans to have a competent production manager – he kept Mr. Henley – and six good capable foremen; He plans to sell directly to the tile setters

By the first week of September, the glazing machines are planned to be installed He plans to buy raw materials on a day-to-day basis


Mr. Gilbert is a good organizer. He intends to eliminate the dust in the air, to reduce production errors, by better training of the workforce, and to eliminate the debris organizing the usage of the existing kilns and buying the used replacing machines Hiring himself specialized and experienced key people – the nucleus He buys four carloads of machinery

Leading / influencing:

He spends a lot of time in the factory helping foremen to improve their efficiency He starts the work early in the morning, being an example for his employees

Strategic Control
Mr. Gilbert personally supervises the company’s operations

Monitoring and evaluating:
Early in the morning, during his first hour and a half walk, he makes suggestions to the foremen; in the second part of the day he checks if his suggestions are applied;

His manner of control is exaggerate, he dedicates too much time for controlling and supervising very close the activity of his employees.

3. Analysis of Mr. Gilbert (Mintzberg)

Mr. Gilbert is an experienced person in tile...
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