Palladium Door, Inc. Case Analysis

I. Problem Statement- Which distribution strategy should Palladium Door, Inc. implement to hit their $12.5 million goal for 2004 without drastically increasing their expenses?

II. Industry Analysis

A. National Analysis- The residential garage door industry was projected to hit $2 billion dollars in sales at manufactures prices in 2003 and sales are expected to grow by 2.4 percent in the next year. In the United States the residential garage door industry is flooded with competition including numerous large national manufactures and several regional and local manufacturers. Their competition includes Clopay Corporation, who is a national manufacture with annual sales over $400 million. Other competitors include Overhead Door Corporation, Wayne-Dalton Corporation, Amarr Garage Doors, and Roynor Garage Doors. Consumers typically purchase garage doors based on four factors; price, quality, reliability of the installer, and aesthetic appeal of the door. The majority of consumers consult their friends, relatives, and neighbors when looking for information about residential garage doors, which could be a result of low brand awareness.

B. Industry Analysis in Palladium’s trade area- Palladium’s currently owns 2.6 percent of the market.

Palladium’s Net Sales $ 9,200,000

Total Market Size $ 348,500,000

2.6 Percent

The total market in 2003 was made up of 3002 independent dealers with total net sales of $348.5 million.

Total Market Sales $348,500,000

` Number of Dealers 3002

Average Sales/Dealer $116,089.27

These 3002 independent garage door dealers operate in 150 markets. This means there are 20 independent dealers in each market. Palladium’s 50 exclusive dealers operate in 50 markets and average $128,800 sales per dealer. This means Palladium’s average net sales for exclusive dealers are greater than the market average sales per dealer.

Independent garage door dealers usually carry a total of three...