Lenox-Martell - Real City Soda

Lenox-Martell Company: Real City Soda

Case Study

Executive Summary

Jim Lerner is CEO and part owner of Lenox-Martell, the leading soda distributor in eastern Massachusetts. The business has been in his family since 1945 and his is now facing some problems running his business. Now it is the moment of truth for Jim, to keep the business and diversify or completely sell the business and acquire a more attractive and enjoyable business.

Real City Soda has many problematic customers that go bankrupt or do not pay their debt on time, and it has big national competitors like Coca-Cola and PepsiCo. He recently was introduced to Atlas Services Inc., a small service company that maintains and repairs fitness equipment. Jim feels that this company has much to recommend but it has many problems that should be fixed.

Analysing of ease of integration, support and training, improve customer base, sale and market share, return on investment, brand satisfaction and cost effectiveness, shows that keeping Lenox-Martell company is a wise decision.

Also comparing Net Profit Margin ratio for the year 2004 for both companies shows that Lenox-Martell has an increased profitability.

Gross Margin ratio comparison for year 2004 shows that for every $1.00 of sale Lenox-Martell is making 75 cents gross profit to cover overhead expenses and provide for profit, where Atlas Services Inc. is making 43 cents.

Based on the data analysis, ratios and the fact that he can learn to love his business, especially a business that has been in the family for more than 50 years, he should keep his business and fix the problems.

Problem Statement

Jim Lerner is running a Soda distribution company in eastern Massachusetts and is experiencing dealings with customers that go bankrupt and cannot pay their debt. Should Jim Lerner continue to diversify Real City Soda or should he sell the company all together and purchase Atlas Services, Inc.?

Data Analysis...