J&J Electrical Contractors, Inc. final report Essay

J & J Electrical Contractors, Inc. final report
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J & J Electrical Contractors, Inc. final report
Generally, J & J Electrical Contractors, Inc. (J&J EC) specializes in electrical contracting for heavy industrial installations, office and commercial buildings, public works, educational institutions, and other specialized systems including maintenance services. The company largely competes in the Southern California electrical-contracting industry. In this final report, the strengths, weaknesses, opportunities and threats (SWOTs) of J&J EC are summarized. The company’s current strategy and how that compares to the strategic issues the company faces, is detailed. This report also details the strategic alternatives of this family business, providing recommendations of what they should do over the next 2-3 years.
Strengths – These are the qualities of the company that enable it to accomplish its mission, and are the basis on which the company’s continued success can be sustained (Fine, 2009). In the context of J&J EC, the major strengths include the following: Strong reputation for integrity, reliability and responsibility. As a strength, this reputation enables the company to successfully bid for several private-sector projects since customers have a very good perception with regard to the company’s integrity, dependability and responsibility. Another strength is strong working relationships in the private sector which has also enabled it to successfully bid for projects within the private-sector. Other strengths include having a Master Builder software that allow for more precise bidding; Financial strength because revenues increased by 2.62% and cash stood at over $105 Million and this is very good for future investment; Z2-Score is 8.6 meaning it is within the safe region (Morden, 2007). Moreover, they have a strong brand image, and an additional project manager/estimator enabled the company to bid on larger projects.
Weaknesses – These are the qualities that serve to prevent the company from accomplishing its mission and attaining its full potential. They deteriorate influences on the organizational growth and success (Fine, 2009). The first weakness is that the company is not competitive with price wars in private sector, and this is primarily because they price their service offerings considerably high and the main impact of this pricing strategy is that is has served to turn away some potential customers from doing business with J&J EC. Another weakness is the Limited geographic expansion into diverse markets whereby the company only competes in Southern California and has not moved to other different areas outside of this region. This weakness restricts the company from tapping/venturing into other areas where there is high demand such as Northern California and the Neighboring states such as Arizona, Nevada and Oregon.
Another weakness is Low ‘hit rate’ in public sector bidding – success rate is 1 in 5 bids. This weakness has limited the company from fully exploiting the market within the public sector. Another weakness is the declining net income after tax (NIAT) as indicated in the company’s annual report – $450,000 in 2002, $250,000 in 2003, $175,000 in 2004 and $130,000 in 2005. This implies that performance has not been good in the past few years. Other weaknesses are High ratio (9:1) of private-sector projects; Lack of technical expertise in areas such as low-voltage applications, system wiring, or alternative-energy-source installations. The last weakness is that the principles/key executives have differing visions for the company.
Opportunities – This are presented by the environment within which the company operates. They arise when the company can take benefit of conditions within its environment in planning and executing strategies that facilitate it to become more profitable (Simerson, 2001). The first opportunity is that there is a greater demand for networked installations and security systems, meaning that there is still many customers who need J&J EC’s services with regard to networked installations and security systems. If the company could adequately tap into this growing demand, then it would translate not only to substantial profitability, but also to increased market share (Jeffs, 2008). Another opportunity is the greater affordability and demand for alternative-energy installations such as fuel cells, solar photovoltaic, and microturbine-power plants. The company could also gain substantial profitability and an increase in market share if it can expand and increase its alternative-energy-installations and try to satisfy this demand as much as possible. Generally, the industry the company is operating in is growing and thus, J&J EC should position itself in a manner that will enable it to fully exploit the increasing demand in this growing industry
Threats – This come about when conditions within the external environment jeopardize the profitability and reliability of the organization’s business. Typically, they compound the company’s vulnerability when they relate to its weaknesses (Jeffs, 2008). The first threat is the intense competition in the industry and competitors are many. In this industry, there are a few big national competitors who mostly go after the large contracts. J&J ...