Inner City Paint Case
Industry Eight Small/Medium Entrepreneurial Ventures
Inner-City Paint Corporation
Donald F. Kuratko and Norman]. Gierlasinski
(Revised)
HISTORY
Stanley Walsh began Inner-City Paint Corporation in a run-down warehouse, which he rented, on the fringe of Chicago 's" downtown"business area. The company is still 10cated at its original site. Inner-City is a small company that manufactures wall paint. It does not compete with giants such as Glidden and DuPont. There are small paint manufacturers in Chicago that supply the immediate area. The proliferation of paint manufacturers is due to the fact that the weight of the product (52 '12 pounds per 5-gallon container) makes the cost of shipping great distances prohibitive. Inner-City 's chief product is flat white wall paint sold in 5-gallon plastic cans. It also produces colors on request in 55-gallon containers. The primary market of Inner-City is the small- to medium-sized decorating company. Pricing must be competitive; until recently, Inner-City had shown steady growth in this market. The slowdown in the housing market combined with a slowdown in the overall economy caused financial difficulty for Inner-City Paint Corporation. Inner-City 's reputation had been built on fast service: it frequently supplied paint to contractors within 24 hours. Speedy delivery to customers became difficult when Inner-City was required to pay cash on delivery (CO.D.) for its raw materials. Inner-City had been operating without management controls or financial controls. It had grown from a very small two-person company with sales of $60,000 annually five years ago, to sales of $1,800,000 and 38 employees this year. Stanley Walsh realized that tighter controls within his organization would be necessary if the company was to survive.
EQUIPMENT
Five mixers are used in the manufacturing process. Three large mixers can produce a maximum of 400 gallons, per batch, per mixer. The two smaller mixers can produce a maximum of 100
Inner-City Paint Corporation
Donald F. Kuratko and Norman]. Gierlasinski
(Revised)
HISTORY
Stanley Walsh began Inner-City Paint Corporation in a run-down warehouse, which he rented, on the fringe of Chicago 's" downtown"business area. The company is still 10cated at its original site. Inner-City is a small company that manufactures wall paint. It does not compete with giants such as Glidden and DuPont. There are small paint manufacturers in Chicago that supply the immediate area. The proliferation of paint manufacturers is due to the fact that the weight of the product (52 '12 pounds per 5-gallon container) makes the cost of shipping great distances prohibitive. Inner-City 's chief product is flat white wall paint sold in 5-gallon plastic cans. It also produces colors on request in 55-gallon containers. The primary market of Inner-City is the small- to medium-sized decorating company. Pricing must be competitive; until recently, Inner-City had shown steady growth in this market. The slowdown in the housing market combined with a slowdown in the overall economy caused financial difficulty for Inner-City Paint Corporation. Inner-City 's reputation had been built on fast service: it frequently supplied paint to contractors within 24 hours. Speedy delivery to customers became difficult when Inner-City was required to pay cash on delivery (CO.D.) for its raw materials. Inner-City had been operating without management controls or financial controls. It had grown from a very small two-person company with sales of $60,000 annually five years ago, to sales of $1,800,000 and 38 employees this year. Stanley Walsh realized that tighter controls within his organization would be necessary if the company was to survive.
EQUIPMENT
Five mixers are used in the manufacturing process. Three large mixers can produce a maximum of 400 gallons, per batch, per mixer. The two smaller mixers can produce a maximum of 100