Swot Inner City Paint Corp Analysis

Situational Analysis

External Opportunities:

1. Domestic expansion
2. Quality favor
3. Cost leadership
4. Product expansion
5. International expansion

External Threats:

Strong competition from

1. Glidden and DuPont
2. Decreasing market
3. Shipping costs
4. customers lack of confidence
5. Poor economy

Internal Strengths:

1. Competitive pricing
2. Consistent growth of the company
3. Low cost of raw materials
4. Fast service
5. Consistent quality

Internal Weaknesses:

1. Low financial resources
2. Lack of domestic & international presence
3. Lack of management & financial controls .
4. Unskilled employees
5. Difficult financial straits

Review of Mission and Objectives Inner-City Paint

Corporation’s current mission and objectives aren’t appropriate in light of the key strategic factors and problems. The mission and objectives are to general and can be expanded. With the companies strengths and opportunities, they should be able to overcome the threats and weaknesses. The company could expand the mission and objectives to supplying a quality paint at a competitive price to Chicago or even the county. The company has grown considerably over the past years, but have focused on the immediate area.

But now that the housing economy is low in that area the company is suffering. If it was able to expand to a number of areas where the market isn’t as bad the company could continue to grow.

Strategic Alternatives 

1. Growth Inner-City Paint should position itself to sell larger quantities & varieties of paint to better compete within the market they serve. Pro: ICP already has a quality, lost price product that customers like which should be leveraged towards fulfilling the needs for large quantity orders. They could gain more confidence from their customer base by increasing their capacity to meet this need. Con: To increase capacity will no doubt require additional financial investments. ICP does not currently have the ability to make the investment themselves due to its poor financial situation. They would have no choice but to seek funding in the form of a loan from a bank.
2. Retrenchment Inner-City Paint is having difficulty in meeting its financial commitments because their current ratio is below 1. 00 (liabilities exceed assets). It already operates at relatively low cost therefore curtailing expenses would not be easy to accomplish. Instead ICP should consider a captive company strategy whereby they could partner with one of the giant competitors (e. g. : DuPont or Glidden) in exchange for long term viability. Pro: This would make sense because the giant competitors do not compete in this specialized market due to the high cost of shipping. ICP would provide the market & delivery mechanism and the giant would supply the financial & management resources. Con: ICP would lose much of its independence and may eventually be forced to reorganize the company after the giant sees how disorganized they are.
3. Stability Inner-City Paint needs to improve its management structure and it’s financial & control procedures. Pro: The Company’s all around well being would improve significantly if it had a better handle on its operations and resources. It would be able to react quicker to financial challenges within Accounts Receivable and Accounts Payable. Con: These improvements could take time to implement and might come at a cost.