Inner City Paint Case Study

Topics: Management, Profit margin, Strategic management Pages: 2 (537 words) Published: December 18, 2012
Case study analysis- Inner City Paint

This analysis is based on the case Inner City Paint. Stanley Walsh founded Inner-City Paint Corporation in a small warehouse on the south side of Chicago. Sales have grown from approximately $60,000 to $1,784,080 with a profit of $17,610. Inner-City Paint Corporation employs 35 workers, of whom 25 are part-time employees. Mr. Walsh is the President and the company’s only salesperson. His mother, Mrs. Walsh, is the office manager. His salary is $132,000. Her salary is $66,000. Inner-City Paint Corporation manufactures wall paint which is sold in 55-gallon and 5-gallon plastic cans. Their primary product is a flat wall paint sold in a 5-gallon plastic can which is sold primarily to small and medium-size decorating stores in the Chicago area. Inner-City Paint has problems associated with growth such as; financial planning and control, professional management, and strategic management. Some of their customers have a serious lack of confidence in the company. These customers view Walsh as a disorganized man who may not be able to keep Inner-City Paint in business much longer. This perception is spreading amongst his customer. He is considering hiring a consultant for a day and purchasing a computer. He also intends to approach a bank for a loan. Mr.Walsh’s goal is to maintain market share. His strategy is day-to-day and not focused on the long term. In just analyzing the costs, the actual overhead should be $55 and not $5. This is a common error in small new businesses.2. Gross margin in Exhibit 1 in the case is shown as $23.65 but should be a loss of $26.65.

Strengths Weaknesses Low cost materials negative rumors Relatively low operational costs pending financial failure bad management/control...
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