Clarkson Lumber Co Generic Strategy Case Study Help
In this section we would be examining the generic methods that have actually been utilized by Clarkson Lumber Co Generic Strategy to highlight locations which can be targeted for highlighting an one-upmanship that can result in a sustainable growth strategy for Clarkson Lumber Co Generic Strategy.
Focus Strategy: Niche Marketing
As per Michael porter's generic methods, businesses have the alternative of operating as niche players where they concentrate on a smaller sized sector of the marketplace. Clarkson Lumber Co Generic Strategy has the choice of operating as a niche player by making large format movies and systems instead of catering to the mass market. We have discussed three possible options for Clarkson Lumber Co Generic Strategy which can be pursued in terms of niche marketing. Before we look at these options, a conversation regarding why Clarkson Lumber Co Generic Strategy requires an alternative profits growth model is shared listed below.
We have actually currently talked about how Clarkson Lumber Co Generic Strategy has 3 revenue sources including its theatre operations, movie distribution and system leasing. As we look at the earnings statements for 2004 to 2007, we can observe inconsistency in terms of profitability and development in earnings. A fall in earnings especially in 2006 and 2007 suggests that business requires to concentrate on locations of growth which can assure consistency in income growth and profitability.
As we check out each of the income sources for Clarkson Lumber Co Generic Strategy, we can see how the system-leasing service of Clarkson Lumber Co Generic Strategy has reliance on the growth of theatres and even then there is a limitation in terms of the variety of theatres that can be opened up.
As far as the theatre operations are worried, earnings from this source depend on the variety of theatres that Clarkson Lumber Co Generic Strategy runs. Together with that, expanding the variety of theatres might cause high capital expenses for Clarkson Lumber Co Generic Strategy where the possibility of more overheads in the form of interest payments on loans for capital expense might lead to lower net success.
Franchises or Alliances:
We can see how the company has a long term debt of $ 160,000,000 if we look at Clarkson Lumber Co Generic Strategy balance sheet. We have actually currently discussed the financial obligation to possessions, liquidity and success of the business in the ratio analysis done earlier to assess the internal financial position of Clarkson Lumber Co Generic Strategy which would give further clarity concerning the reality that increasing the long term liability is not a feasible alternative for development. This brings us to the conclusion that Clarkson Lumber Co Generic Strategy is presently in a position where it requires to reduce its reliability on revenue from theatre operations and needs to expand through alternative choices which require lower capital investment and assure higher net profitability. One possible choice that can be assessed further is to give franchises of Clarkson Lumber Co Generic Strategy or to have alliances with other companies which can promote growth with minimal capital expenditure. The possibility of losing a total hold over the quality of services being provided may avoid more orientation in this instructions.
If we explore Clarkson Lumber Co Generic Strategy position in its movie circulation company, we can see how there is a higher orientation towards producing documentary films. This does assure blood circulation Hollywood movies which may lose their effect after the initial launch duration, the fact still remains that documentaries do not guarantee earnings growth especially as the market share for these documentaries is restricted to the exact same section. While Hollywood movies are made in various category, they also offer the possibility of generating high profits within the initial days of screening. Focusing on documentaries in terms of broadening the film distribution business suggests restricting the number of releases to a few documentaries that might not be drawing in more than the present audience. This highlights the reality that in order to attract a greater number of audiences to Clarkson Lumber Co Generic Strategy theatres, it is very important to increase the number of motion pictures that are released under Clarkson Lumber Co Generic Strategy name.