Stewart Box Company

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CRITICAL ISSUES What are the strong points of Stewart Box company’s current sytem? Marketing Stewart Box company differentiated itself from competition by focusing on custom-made orders and targeting a small niche market only. By doing this they are able to actively cater to its customer’s individual wishes, and strictly adhere to promised delivery dates. What are the weak points of Stewart Box company’s current sytem? Marketing Reach Stewart Box Company has a very limited customer base. They only market their products within a radius of about 500 miles from its factory, which was located in a fairly small town. A limited customer base results to low volume of orders which will lead to the carton factory operating below its capacity…show more content…
Therefore, it is very important for Stewart Box Company to be have slightly lower prices than its competitors to be competitive in a very cutthroat industry. RECOMMENDATIONS Expand Market Reach To address the underutilization of the carton factory, Stewart Box company needs to increase the volume of their orders. They can do this by going beyond the their existing 500 mile marketing radius. They can also further increase their volume by catering to not only custom made orders but also catering to standard packaging sizes. By increasing sales, the capacity of the carton factory is fully utilized, cost efficiency is improved, thereby improving the bottom-line figures of the company. Improve efficiency of factories Stewart Box Company needs to address the Carton Factory operating under capacity. The underutilization of this plant may cause inefficiencies in the company’s operations thereby increasing its standard costs. This inefficiency in operations is evident in the unfavorable variances in the company’s Income Statement and Spending Report. Reevaluate Costing Method The company should reevaluate their costing process. Costing based on estimates of annual standard costs may be result to inaccurate cost estimates as cost of raw materials and manufacturing equipment fluctuate within a year. The company needs to be more dynamic in their costing
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