Case12.Jkt.No

The John M. Case Company was the leading producer of business calendars in the US. Established in 1920, the company contracts the printing of commercial calendars. John Case joined the organization in 1946 and inherited the company in 1951. Under his leadership, the emphasis was on controlled expansion in the established line of business. By 1984, the company had a 60% to 65% share of its market, been profitable every year since 1932, and sales had increased every year since 1955. The principal products were commercial desk calendars of various types. They designed and manufactured disposable-page and flip-over-page desk calendar pads in variety of sizes. In 1984, standard desk calendar pads contributed around 80% of net sales and 90% of earnings before taxes. About 90% of Case’s total shipments usually took place between June and December.

High-speed offset presses were used to print appropriate dates on paper purchased in bulk from suppliers. The entire process was automated and characterized by high fixed costs, high setup costs, and low variable costs. Case operated on level production schedules and because of this, minimum production costs were imperative. This also allowed Case to utilize long production runs and minimize down times, investment in equipment, expensive setups, and use of transient labor.

Selling costs were very low and the company generated many reorders from existing customers, with around 95% of total sales consisting of reorders and 5% of new orders. John Case refused to leverage his equity in the company and therefore, operated with an all-equity capitalization. The size of the budget was found by the volume of internally generated funds also with Case’s decision on how much to withdraw from dividends. Over the last three years, dividends averaged 70% of net earnings. The company had not resorted to seasonal borrowing in almost 10 years, but they maintained two $2 million lines of credit for emergency purposes.

John M. Case, board...