J&J Electrical contractors / Strategic Management MBA

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Introduction and Background

The case is about J & J Electrical contractors which is one of the best example of the family business, it unfolds the story of the family which has opened up the business and running successfully with their own family members mostly. The small family with average income and nominal who have proven themselves to be competitive against many large and bigger contractors in the electricity and how did they became successful in the market is the story the case retells us all about.

John and Jean Abernathy is the current CEO of the company which were from the very small family and little background of Electricals Company, now the company is well recognized with their excellent services and well known with their electrical contracts. Till the date we must say passing hurdles and overcoming weakness the company has now worth revenue of 5.2 billion and they have gained well reputation in front of the customers beating market with their best quality products. We must say that satisfying or delighting customers through the quality has been the best part of J and J as they always focus on giving good quality products.

Company from their introduction stage they have started the market skimming clearing the term they have gone through the customers which can pay them money as the early adopters they handle care and satisfied them with the outstanding products and quality services which led them to set a benchmark and after as they turned themselves to the growth stage they put all their efforts on retaking, regaining and re visualizing other ideas of innovation and invention towards the electrical products and services.

Now the company has grown larger than it was before initially they have started with very little capital and they are successful by the year 2006, it has a miraculous journey as they have started from only 3 employee where we can see more than 50 employees with revenue of 5.2 billion, it leaves a great impact for the young entrepreneurs, creative and inventive people. The company has always been an example for the people who have set a dream of getting things done with success.

Where there is a startup there are hurdles actually in the case I have also been through their problems, their mistakes from which they have learnt and they later on succeeded on of the problem was as they entered into the growth stage as they all were already doing a good thing and good job ,they wren even better at the market but they were not excelling the market they were not meeting up to the main objectives of the market as the larger portion of the market share was not with them they were with the either competitors or with substitutes. Saw e all know they need to bid and get the fair market for the market capture but just to get the market share they have bid very minimal price to exceed the market and capture the market which led to the significant drop to the revenue of their brand, and

 they were not excelling the market as the and J was only focusing to the modular classroom which was not covering the market , the focus on single sector and not exceeding on their products are the common problems of the business houses almost everyone. The case also retells about the competitions and the methods and strategies they have used to overcome and stand all alone in the market. The company top is dealing with the products like heavy industrial installations not only that modular classrooms and office building and even educational instructions are their business, they are also focusing on public works and specialized system including some maintenance services.

Major analysis of the case

The case elaborate us to the electrical contracting industry, the challenges of the industry due to the rise in the prices of the metal and how that has affect their entire operations and sue to the that the high cost of homes, especially in southern California sue to continuous increase in price they might have lose the market and could not remodel the increase on their services. The case also explains us to main objective of the company which is prosperity and growth how they have decreased their profit margin and how they are improving the company gradually decreasing profitability and they are also watching the possible growths and future direction to the company which can take or make them maker exceeder. Company is also benefited from the extensive interviews; those interviews gave them opportunity to find new ways of developing models and the new path for the company. And also case challenges us to see the strategic alternatives for the company and integrate industry with the dynamics of the market and market demands.

SWOT analysis of the J&J Electrical contractors

Strength

·         Customers reputation, they are trusted by their customers

·         Goodwill on their brand, they have got a very good fame on the market

·         Strong positions on the market

·         As they are updated and are using the latest technology in the market for e.g. master builder software.

Weakness

·         Due to high completion on the bidding, the situation of never ending price wars can happen which the major weakness for the company

·         Geographically they only have some of the branches and are small in comparison to their competitive ones.

·         Gradually declining profit margin

·         Lack of technical expertise

Opportunities

·         Increasing numbers of customers and increasing services are the biggest opportunity to the company

·         As the government is changing their policy and they are turning downtown to residential houses which leaves immense Opportunities to the company

·         Tax are low as because of energy policy act of 2005 which has made J and J more stung and competitive and the chances of growing market are even higher

Threats

·         Low barrier to entry has led a lot of competitors to enter into the market an tom dick and harry can open up the company and give the competition to the J and J

·         As the prices for the raw materials are being higher and higher which had led increase in the cost of the company services is the biggest threat.

·         Supply shortages

Past, present and future strategies of the J & J Electrical company

Company from their staring of the operations they have used many strategies on their 30 years of operations as they are more focused on public sector projects rather than private sector projects they always has made their priority to the public sector so they could build of trust and build of the levels to the customers.

They are continuously focusing on the same project and basically on the same place California which clearly shows us that the company has been using focus strategy to focus on their key services. Not going beyond the bars or place also comes under focus they have too dedicated to their work they are in my view excelling on what are they doing. As the market is only limited they only get few portions of share from the market but this is how they are differentiation themselves from other companies this is how they are building their image in front of their beloved customers. I remembered one example of Mercedes Benz as Mercedes is the car which everyone cannot afford and its not for everyone so, the company making Mercedes is satisfied with the small portion or the niche market that’s their share and they have got good reputation through Mercedes same is happening to J&J Electricals as they have their share in the market and they are differentiating themselves through quality.

As per the present strategy they are focus nod using focus strategy not only this they are using quality circle as their major strategy they are providing quality services to their clients so they are betting their competitors through their excellent service and quality.

For the future as the strategy I think they will go for the eco friendly equipments and get competitive advantage through out of it and after having good experience and building relationships in public sectors the horizon will be broaden up for them and they will move on to the other private sectors.

Strategic analysis of the J and J Electrical contractors’ starting with the porters five forces model

Porter’s five forces model

New Entrants: Geothermic Energy as the market has introduced new product which is a new entrant and possibly a threat to the company.

Suppliers: Electrical wholesalers they are the one makes sales in the market

Rivals: as we can see the main rivals for the company is Buck Electric, Daniel’s Electrical construction co., Mc bride Electric and other names are Champion Electric inc..Well we see it’s the perfect competition market and there are lots and lots of competition for the &J all over the place

Buyers: public sector clients are the top list for the J and J whereas other than that there are private homeowners and private clients.

Substitute: other non license electric contractors who works same for the cheapest services fairs and they are also easy to access.

As we have seen and evaluate Michael porters five forces model which clearly indicates us about the j &j company five forces from which we can conclude that intensity for the rivalry is very high as the competitors are giving tough time for the company, but the relief is there is very minimal threat of substitute of the services. As barriers to the entry are very low much of the competitors can also come up with the new strategy and new market share. and last but not the least bargaining power of the buyers are high as we can clearly see its due to high competition they have to bid in the very minimum price either the contract will be gone for someone else and no company No wonders losing their valuable customers whereas, bargaining power of the suppliers is obviously low or vice versa.

Now let’s go for the strategy analysis and let’s take an example of BCG matrix and how does it relates with the J &J Electrical company.

High                Relative of Share                               Low

STARS	????????   ???????
CASH COW	DOGS

High

Low

Relative of market growth

BCG Matrix there are four of the extension for the BCG matrix they are stars, cash cows question mark and the last one is dog it is actually based on the basis of the market growth and the market share the product of the company is having in the market. For the BCG matrix and for the company I view them as a Cash cow as the company has got some share of the market and even they are earning profit but with low growth rate I say. And the market and the profit margin are declining due to the vulnerable market trends. as the company is concentrated on public sector projects where the profit margins are really low this is what making them at the cash cows money are flowing or coming like a cow giving milk but I relatively it is a down turn for the company this is where they have to add flavor on their services and product either diversify or differentiate for example for the company they can go to the private sector. As they concerned on getting big projects the smaller one which can later give them a great profit are relatively higher.

As my suggestion include that the company should also generate more cash through catching small fishes what I meant is smaller projects private one will help them to increase the profit. Investment with broaden up the horizon is also next option for the company. Technology update and taking care of the customers will take the company to the next level.

Industry attractiveness of J & J electrical contractors

Factors	Weight	Rating	Product
Degree of regulation of J &J	5	0.5	2.0
Degree of technological improvement	15	0.6	11
Competition intensity	30	0.1	19
Growth rate of the Industry	30	0.7	21
Market size	20	0.8	17
Total	100		51.5

As we have considered three of the strategic analysis whereas would like to support my arguments and analysis of findings with the competitive analysis of competitive strength of J&J Electrical Contractors.

Competitive strength analysis of J &J Contractors

Success factors	weight	rating	product
Management	15	0.7	15.7
finance	10	0.5	10.5
Goodwill of J&J	15	1.2	25
marketing	20	0.9	12
Brand image	22	1.0	24

Competitive strength shows us the how strong the brand is all about it gives the clear picture of the strength and weakness of the company and for J & J my competitive analysis shows that they have good brand image and goodwill in the market whereas low profit margin has led them to minimize their financial points with good marketing team, in overall J&J has got good competitive analysis.

Market analysis of J&J Electrical contractors

·         The main target for the company is the residential people and all those public sectors where they go for bidding and get the project.

·         As they have to bid with the very low price there can be price wars which sometimes are too longing for the company’s growth .they are very price sensitive

·         Increasing population and increasing market ratio for the company comes with the increase in the price of raw materials as a result there is also high cost which might even suffer J&J

·         Future customer needs are growing with renovation and services and there are tremendous opportunities for the growth of company.

·         Energy saving or eco friendly equipments are more on the issues so it’s better for the company to be updated in those parts of growing green and eco friendly.

Conclusion and recommendation

 As the company is gaining a good image in front of customers and they have a very good management where they care about their clients’ needs and services despite of hurdles they face and despite of having so much of competition in the market they are making themselves a learning organization where they can learn and adopt new things to the organization. J&J which is related with Electrical contractors are the best in terms of the quality. As the increasing markt share and growth will lead increase on their portion now they have to be secure and more primitive to their products.

They all have to do increase market share through pr and other marketing activities they have to use all their efforts on the marketing advertisement it’s the show time for the company to come into the peoples mind and heart. As the company is about electrical they also must be updated about the technology that’s coming into the market place as for the innovation and invention they have to invest on research and development so that the result all good can be patented and they can earn a huge profit through market skimming and all that.

Hiring people with the good sense of the work and who are even creative on viewing and analyzing the work. As the market resources are growing higher and higher I recommend company to make a contract for at least 5 years with the raw material suppliers to stable their price in the market by which they can relatively give lower price than their competitors which will add a value to the revenue.

Employees all they need is the good direction and clear, complete stated goals so I even recommend company to mention the clear goals for the company in front of the employees so that the employees would also be goal directed.

For the achievement of goal employee must be trained beautifully and systematically so in order to put them front I suggest J&J should give proper environment of training and development. Also the sharing culture would help to the company.

Maintaining the same loyalty and maintain the same quality must be clear to everyone in the organization this is how they can stable themselves to the market.

Also for the employees benifits and perks will help to deal with the increase in revenue so to motivate them company can give them perks and benfitis and even target will work.

Forming an strategic analyss for the company and the competitior analysis will let them know about their competition and their strength and weakness.market is all about following the trends.

Last but not least using latest technology and continuous development in the technology part as well as main focus on the eco friendly ways of giving services and products to the clients, goventments.state e.t.c.

Bibliography

adhikari, D. r. (2009). Strategic Implementation. kathmandu: Buddha Publication.

Agrawal, G. R. (2010). Strategic Management. Kathmandu: M.K. publishers.

Internet centre for management and business administration Inc. (2002-2010). NetMba.com. Retrieved from THE BCG MATRIX: http://www.netmba.com/strategy/matrix/bcg/