1. How would you describe Ray Monroe’s overall attitude toward his business? 2.

Question

1. How would you describe Ray Monroe’s overall attitude toward his business?

2. How would you describe the industry and the competitive environment?

3. Develop a marketing strategy for AMLSS. Include some projections for sales revenues for the next twelve months.

CASE 3 A. MONROE LOCK AND SECURITY SYSTEMS Ray Monroe was sitting backin his chair in his home office trying to understandwhy the new venture had not made him the rich man he thought he would be. A Monroe Lock and Security Systems (AMLSS) had been established about two years ago and offeredlock-smithing services to residenti al and commercial customers as well as autom obile owners in the greater Boston area. These services included lock rekeying. lock and deadbolt installation and repair, master key systems, emergency residential lockouts, foreign and domestic automobile lockouts, and window security locks. In addition, AMLSS was certified by the Commonwealth of Massachusetts to perform al arm installation and offered a full range of al arm products Financial results have been relatively poor, with losses of $6,500 in the first year and a profit of only about 83,500 in year 2 Currently, AMLSS's target market is three local communities in the Boston area wth similar demographics (sec Exhibit 1) Source: This case study was prepared by Michae P Peters with the intent on of providingia basis for class discussion. BACKGROUND Ray Monroe is the only child of parents who were both successful entrepreneurs His parents are now deceased, and Monroe receired a substantial inheritance that would satisfy any of his financial needs for the rest of his life. Ray had been educated at alocal priate high school and then at a small liberal arts college in Vemont He was not a great student but al ways seemed to get by. His summ ers were usually spent at the coll ege, taking summer courses Upon graduation, his fath er had helpedhim get a job with a friend who owned a security and al arm manufacturing business in the western part of the state. Ray worked in various areas of the business learning a great deal about alarms and locks After two years there, Ray decided that he'd prefer to be his own boss and, using some of his inhertance, entered a special program to learn more about the locksmith business. His intent upon completion of the program was to start his onlock and security business. He felt from his expen ence and education that this market offered tremendous opportunities Increased crime and residential house sales that often required new locks offered m any opportunities to succeed in this business Ray did not want to offer alarm installati ons as part of his ne venture since he felt that they were bothersome to install. He al so knew that there were mny large competors already in the al arm market that would be able to offer products and serrice at much lower prices. INDUSTRY STRUCTURE/COMPETITION The locksmith industy was dominated by small operators, 60 percent of which consisted of an owner and one employee. Only about 20 percent of these firms had five or more employees

Explanation / Answer

.         How would you describe Ray Monroe’s overall attitude toward his business?

I would describe Ray’s overall attitude as not invested. He’s looking for easy money without the hard work that is involved in being an entrepreneur. An example that really stood out is the fact that he refuses to take calls after 5 pm. He does this realizing that there is a strong market for emergency services.

2.         How would you describe the industry and the competitive environment?

The industry is overly saturated with locksmiths, especially long vested family owned businesses. Because of this, most of the potential market would be more inclined to use a locksmith that has been around for generations rather than a new player to the game. The family owned locksmith is most likely around for so long because the business in invested in the business. They care about the customer and have established a rapport with the community it serves.

3.         Develop a marketing strategy for AMLSS. Include some projections for sales revenues for the next twelve months

As mentioned in my previous answer, AMLSS needs to determine what the community it wants to serve needs are. He keeps all his equipment in his commercial van, but he’s not exactly going to drive around asking people if they need help getting into their locked homes/cars/etc. The first thing AMLSS should do is answer the phones after 5 pm. He’s losing a crucial market time there. He should ideally be on call 24 hours to compete with other competitors. He should also offer some type of guarantee to provide piece of mind to the consumer which would be an incentive to call AMLSS again, or recommend the service to others. Promotional pricing wouldn’t hurt either.   Bottom line, he needs to gain market share and become a household name. But he also needs to determine if he really wants to expend the energy to make his business successful, which doesn’t seem to be the case based on the case study.   In any event, the projected sales at $25 would allow AMLSS to become successful.

Market Share

City

Population

1%

2%

Newton

           32,112

322

643

Neeham

           10,846

109

217

Wellesley

             8,861

89

178

520

1038

             1,558

January

1200.01

January

1200.01

February

2260.85

February

2260.85

March

2777.26

March

2777.26

April

1748.62

April

1748.62

May

922.2

May

922.2

June

1414.12

June

1414.12

July

1595.18

July

1595.18

August

1652.37

August

1652.37

September

2264.64

September

2264.64

October

2602.19

October

2602.19

November

4087.37

November

4087.37

December

1905.8

December

1905.8

Yearly Total

$24,430.61

Yearly Total

$24,430.61

Monthly Avg

$2,035.88

Monthly Avg

$2,035.88

Hourly Avg

$11.75

Hourly Avg

$11.75

Projected Sales @ $11.75

Projected Sales @$25.00

40 Hours

$470.00

40 Hours

$ 1,000.00

52 Weeks

$24,440.00

52 Weeks

$52,000.00

Monthly

$2,036.67

Monthly

$ 4,333.33

Market Share

City

Population

1%

2%

Newton

           32,112

322

643

Neeham

           10,846

109

217

Wellesley

             8,861

89

178

520

1038

             1,558

January

1200.01

January

1200.01

February

2260.85

February

2260.85

March

2777.26

March

2777.26

April

1748.62

April

1748.62

May

922.2

May

922.2

June

1414.12

June

1414.12

July

1595.18

July

1595.18

August

1652.37

August

1652.37

September

2264.64

September

2264.64

October

2602.19

October

2602.19

November

4087.37

November

4087.37

December

1905.8

December

1905.8

Yearly Total

$24,430.61

Yearly Total

$24,430.61

Monthly Avg

$2,035.88

Monthly Avg

$2,035.88

Hourly Avg

$11.75

Hourly Avg

$11.75

Projected Sales @ $11.75

Projected Sales @$25.00

40 Hours

$470.00

40 Hours

$ 1,000.00

52 Weeks

$24,440.00

52 Weeks

$52,000.00

Monthly

$2,036.67

Monthly

$ 4,333.33

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