Berkshire Chair Corporation
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Berkshire Chair Corporation
Main issue:
Company reorganizing from functional to divisional
Background
Originally was solely focused on top-line sales growth
Little competition
Huge margins
Now, new competition and lower margins
Company:
Co-founded in 1980's by Berkshire, hence the name Berkshire
Manufacture portable and folding chairs
Early on, sold exclusively through distributors
Originally organized functionally: vp of sales, supply chain, finance/administration and staff managers for advertising and R&D
Over 1500 SKUs, but only 40 SKUs accounted for almost 90% of sales.
Went from distribution only to selling to major retailers like Wal-Mart, K-Mart and Target as well as other major retailers like sporting goods stores.
Sold through KCC sales reps, outside reps and distributors.
They also offered custom products in addition to their retail channel.
Moved production to Mexico and China to save on costs. Some assembly was done in Denver.
1999: took out a loan of $30 million so that one of the founders could buy a ranch. This reduced KCC's margin of error since the cash was taken out of the company.
The founders, who were CEO and President, seemed to spend a good amount of time on other ventures.
Late 1990's: significant amount of competitors from Asian countries...