STRATEGIC PLANS FOR MASTERTON CARPET MILLS

STRATEGIC PLANS FOR MASTERTON CARPET MILLS - Masterson...

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Masterson Carpet Mills, Inc., By group 3 Ps. Joseph Sianipar Bernie Dambo
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Masterton Carpet Mills, Inc. is a privately held manufacturer of a full line of medium to high-priced carpet primarily for the residential segment. The company markets its products under the Masterton and Chesterton brand names. MCM currently distributes its line through seven floor covering wholesalers located throughout the United States. Masterton Carpet Mills, Inc. lagged behind the industry sales growth, but still managed to be profitable by recording a 3.6% sales increase over the previous year. U.S. consumers and businesses spend approximately $50 billion per year on floorcoverings. The largest category of floorcoverings is carpet and rugs which accounted for an estimated $17.9 billion in sales. The residential segment accounted for 74% or $13,246,000,000 ($17.9 billion x 74%=$13,246,000,000) of the total U.S. sales. This segment is dominated primarily by three companies, Shaw Industries, Mohawk Industries and Beaulieu of America, which control 85% of the U.S. residential carpet and rug market. Masterton Carpet Mills, Inc. is not inexperienced in the area of direct distribution. They currently directly distribute their contract sales to institutions and business. However, these sales only account for 28% of company sales and occur primarily in the southeastern U.S. U.S. Carpet and Rug Industry: U.S. consumers and businesses spend about $50 billion annually for floor coverings. The largest category of floor coverings is carpet and rugs, followed by resilient coverings (vinyl), hardwood, ceramic tile, and laminates. The U.S. carpet and rug industry recorded sales of $11.69 billion at manufacturer’s prices in 1999. TWOS ANALYSIS Threat Several wholesalers were feeling increased pressure to shave their profit margins to accommodate retailer pricing demands. Mergers, acquisitions, and bankruptcies among manufactures brought a declining demand for carpet and rugs. The sales distribution in the residential segment more skewed. Increasing demand in ceramic, hardwood, and resilient floorcoverings. Declining carpet and rugs in sales in outside U.S.A
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Department stores, furniture stores, and independent retail store have been replaced by large mass- merchandise and discount stores (Kmart and Wal-Mart). CarpetMax, Carpet One, and Home Depot account for 45
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This note was uploaded on 08/09/2011 for the course BUAD 605 taught by Professor Nasution during the Summer '11 term at Andrews Univeristy.

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STRATEGIC PLANS FOR MASTERTON CARPET MILLS - Masterson...

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