Butler Lumber Co Generic Strategy Case Study Help
In this area we would be examining the generic methods that have been used by Butler Lumber Co Generic Strategy to highlight locations which can be targeted for highlighting a competitive edge that can lead to a sustainable development strategy for Butler Lumber Co Generic Strategy.
Focus Strategy: Niche Marketing
Based on Michael porter's generic strategies, organisations have the option of operating as specific niche players where they focus on a smaller segment of the marketplace. Butler Lumber Co Generic Strategy has the option of operating as a niche player by making big format movies and systems instead of catering to the mass market. We have talked about 3 possible options for Butler Lumber Co Generic Strategy which can be pursued in regards to specific niche marketing. Prior to we look at these alternatives, a discussion relating to why Butler Lumber Co Generic Strategy needs an alternative profits development design is shared listed below.
We have actually currently talked about how Butler Lumber Co Generic Strategy has three income sources including its theatre operations, movie circulation and system leasing. As we take a look at the earnings declarations for 2004 to 2007, we can observe inconsistency in regards to success and development in incomes. A fall in earnings especially in 2006 and 2007 recommends that the business requires to focus on locations of growth which can guarantee consistency in revenue growth and success.
As we explore each of the earnings sources for Butler Lumber Co Generic Strategy, we can see how the system-leasing organisation of Butler Lumber Co Generic Strategy has reliance on the growth of theatres and even then there is a restriction in terms of the number of theatres that can be opened up.
As far as the theatre operations are concerned, incomes from this source are dependent on the number of theatres that Butler Lumber Co Generic Strategy runs. Along with that, expanding the number of theatres may lead to high capital expenses for Butler Lumber Co Generic Strategy where the possibility of more overheads in the form of interest payments on loans for capital expense may lead to lower net success.
Franchises or Alliances:
We can see how the business has a long term debt of $ 160,000,000 if we look at Butler Lumber Co Generic Strategy balance sheet. We have actually already gone over the debt to properties, liquidity and profitability of the company in the ratio analysis done earlier to assess the internal monetary position of Butler Lumber Co Generic Strategy which would offer more clearness relating to the fact that increasing the long term liability is not a practical option for development. This brings us to the conclusion that Butler Lumber Co Generic Strategy is currently in a position where it requires to decrease its reliability on earnings from theatre operations and requires to broaden through alternative options which require lower capital investment and guarantee higher net profitability. One possible choice that can be assessed further is to offer franchises of Butler Lumber Co Generic Strategy or to have alliances with other companies which can promote growth with very little capital expenditure. The possibility of losing a total hold over the quality of services being used might prevent additional orientation in this instructions.
If we check out Butler Lumber Co Generic Strategy position in its film circulation company, we can see how there is a greater orientation towards producing documentary. Although this does promise circulation Hollywood motion pictures which might lose their impact after the preliminary launch period, the fact still stays that documentaries do not promise earnings growth specifically as the marketplace share for these documentaries is limited to the same segment. While Hollywood movies are made in different genre, they likewise offer the possibility of generating high profits within the initial days of screening. So focusing on documentaries in regards to broadening the film circulation business implies limiting the number of releases to a couple of documentaries that might not be attracting more than the present audience. This highlights the reality that in order to bring in a greater number of audiences to Butler Lumber Co Generic Strategy theatres, it is necessary to increase the number of motion pictures that are launched under Butler Lumber Co Generic Strategy name.