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Catfish Creek Canoe Company Swot Analysis

Essay by   •  March 31, 2012  •  Case Study  •  606 Words (3 Pages)  •  3,425 Views

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Introduction

Steve Davidson is opening canoe manufacturing shop called the Catfish Creek Canoe Company (CCC). He has been making canoe recreationally for more than 20 years and also has experience in woodworking. After purchasing a canoe for himself and couldn't believe the poor quality of it, leading him to see an opportunity to build premium canoes. His goal is to build and sell 30 canoes per year and he has to decide which pricing strategy will maximize his profits.

External Analysis

Opportunities:

The market for canoes has been shown to follow a business cycle. The sales of premium made canoes are extremely vulnerable to the cycle due to their high price tags. However, after a recession in the earlier 1990's, the sales of canoes had been shown to be increasing every year as the economy got better. If this trend continues, there will more and more buyers on the market.

There is a possibility that additional employees can be hired in order to produce more canoes, and therefore make more profit. For example, if one person can make a canoe in 10 days, it would take two people 5 days to make one. Then 60 canoes could be made in a one year period, and assuming all are sold, the net income would be doubled. After becoming an established business with a piece of the market share, CCC could expand and hire even more employees.

Threats:

The CCC has many competitors already established in the canoe making industry. There are both hand-crafted and mass produced canoe companies. The mass produced companies are able to sell their canoes at a much cheaper price, varying from $750 to $3000, which is much more affordable.

The use of the internet would not be beneficial. Since all canoes must be picked up, it's no use to have people from all over the world ordering them, as it's likely they wouldn't be able to come pick the canoe up. The internet would also likely create too much demand and order would not be able to be filled, which would put a negative reputation on CCC. This also applies to advertising in the magazines.

Internal Analysis:

Strengths:

Davidson has been in the canoe making business for more than 20 years. He says that making canoes is "relatively easy" for him. With this experience, he is able to offer a five year guarantee on his canoe's, which is more than the standard, but it makes his canoes more attractive to potential buyers.

The 12-week business program at the Entrepreneurial Manufacturing Generator that was enrolled in was very beneficial. After completing the case based course and an acceptable business plan was created, students can rent spaces for $351 per month for a start-up and mentoring

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