Term Paper on "Shaw Industries"

Term Paper 13 pages (3495 words) Sources: 5 Style: APA

[EXCERPT] . . . .

Shaw Industries

The existence of Shaw Industries, the largest broadloom tufted carpet producer in the world, is due to the visionary and innovative ideas of its founder, Julius Clarence Shaw. The company was founded in 1946 in Dalton, Georgia. However based in a relatively small town, Shaw has had the capability of expanding his business through the constant improvements he brought to the products. The company has significantly contributed to the urban development of Dalton and also to the development of the carpet industry. "The men who built Shaw drew upon Dalton's skilled workers, complementary enterprises, and local support networks. But the company's growth also reflected the maturation of the tufted carpet industry."

The years that passed since 1946 represent the company's transition from a small size rural carpet manufacturer to an international conglomerate. In 2000, Shaw Industries was acquired by Berkshire Hathaway, and according to some, the transaction represented the completion of Shaw's transformation. "The recent acquisition of Shaw by Warren Buffett's Berkshire Hathaway Corporation has furthered, if not yet completed, Dalton's transition from entrepreneurial powerhouse to corporate outpost."

Today, Shaw Industries, part of the Berkshire Hathaway conglomerate, is one of the strongest companies of the globe, with unique features and competencies, well established goals, strong financial highlights, creative and committed personnel and high quality products.

2. Company Description

Shaw Industries is part of the Berkshire Hathaway Corporation and it is the international leader on the carpet market. Aside from tufted broadloom carpets, the company also produces rugs and hard floor surfaces, which they sell on the United States market, as well as onto international markets. "Shaw has more than 70 manufacturing facilities in 32 communities and seven states and modern distribution in 25 metropolitan areas throughout the United States."

The company's success is due to the dedication and commitment towards creating high quality products, the company's innovative spirit, their policies and values. Among their most renowned brands, one could point out Couture by Sutton, Philadelphia Carpets, Shaw Hardwoods, Designweave or Shaw Tek.

Shaw's key people are CEO Vance C. Bell, President Randy Merritt and EVP and CFO Kenneth G. Jackson. "Shaw is a full-service flooring company with more than $5 billion in annual sales and approximately 30,000 employees. The employees' daily efforts illustrate their commitment and their determination to stay on top in an ever-changing and highly competitive marketplace."

3. Strategic Focus and Plan

Shaw Industries is generally focused on maintaining its position as international leader on the rugs and carpet industry, increasing customer satisfaction and its revenues. In order to achieve these, they first have to resolve two major issues that hold them back. As such, the first strategic focus is on increasing employees' loyalty to the organization and limiting the personnel fluctuation. The second strategic focus is on reducing the bad publicity linked to their usage of chemical compounds and implementing more environment friendly procedures.

4. Mission Statement (Current)

Given that Shaw Industries is no longer an independent company, but has become part of an international conglomerate, the carpet manufacturer shares the conglomerate's overall mission. As such, as a subsidy of Berkshire Hathaway, the mission is that of one hundred percent customer satisfaction through the manufacturing of high quality products and through the implementation of strict but fair legal, political, economic and ethics norms.

5. New or Revised Mission Statement

The Shaw Industries mission statement reveals the company's strong commitment to:

Exceed our customers' expectations in quality, service and value, while continually increasing our value to our stakeholders; and provide growth opportunities for our people. We will accomplish this in an environment that values and respects the varied backgrounds of all people.

6. Vision Statement (Current)

Similar to the company's mission, Shaw Industries' vision is in full accordance with the conglomerate's vision. In this order of ideas, the manufacturer is dedicated to maintaining its world class leading position, further expanding and increasing its revenues.

7. New or Revised Vision Statement

Shaw Industries revised vision statement is:

Shaw Industries' vision is to continue to be the industry's leader and a world class company as defined by the customers it serves while promoting strong values of honesty, integrity and hard work. For four consecutive years, the top 500 commercial facility managers were asked to rate commercial manufacturers in five categories, and Shaw was named number one in all categories: quality, service, styling, value and performance.

8. Goals

A. Non-financial Goals

Increase customer satisfaction

Improve operations and activities

Minimize the negative impact upon the environment and develop production processes that protect the nature

Reduce waste and increase quality of life in the community

Improve the recycling process

Increase number of employees from 31,469 in 2006 to 50,000 in 2011

Increase market share from 33% to 47%.

B. Financial Goals

Increase revenues from $5,834 million in 2006 to $9,554 million in 2011

Increase earnings before taxes and minority interests from $594 million in 2006 to $950 million by 2011

Increase capital expenditures from $189 million in 2006 to $350 million in 2011

9. Core Competency and Sustainable Competitive Advantage

The company's core competency is that of "efficient manufacturing and effective service to retailers," alongside with their commitment and dedication towards creating the best products to the satisfaction of customers. In addition, another core competency is that of using the latest technologies on the market. Shaw Industries has always manufactured their carpets with the latest fibres and using cutting-edge technologies and machineries.

Shaw Industries' advantage in comparison to the competitors on the market is given by the international spreading and territorial expansion of the organization, generating ease of customers' access to the Shaw facilities.

10. Situation Analysis

A. SWOT Analysis

Strengths international recognition leading position on the international market high technologies used in the manufacturing process wide array of high quality products highly skilled and trained personnel

Weaknesses involvement in law suits (such as Heller v. Shaw Industries) usage of chemical compounds that are believed to have negative impacts upon individuals' health and the environment reduced employee loyalty to the employer

Opportunities

However this is a tragic situation, hurricanes and other natural calamities affect people's houses, forcing them to redecorate, leading to an increased demand of rugs, carpets and hard floor surfaces

The growing number of rich individuals, who desire to remain on trend and constantly redecorate, buying the most expensive products

Threats fierce competition on the rug and carpet market increased concern for environmental protection, generating additional costs for Shaw Industries the ongoing devaluation of the dollar in report to the European currency, EURO generally reduced demand for carpets and rugs increased prices for raw materials and manual labour

B. Industry Analysis

Even after so many years, the rug and carpet industry remains focused in Georgia, an American state that has long benefited from the industry, managing to increase the population's lifestyle standards, their economy and reducing unemployment rates (among the lowest). The prosperity in the state, due to the manufacturing of carpets, has attracted large numbers of immigrants, especially Hispanics, who contributed to further development by "allowing the mills to remain in Dalton and keeping labor costs in check."

The carpet industry is currently focused on developing new technologies and practices that have reduced negative impacts upon workers' heath and the environment, including the limitation of waste and the recycling of old or unused carpets.

C. Competitors

The primary players on the floor industry are based in Georgia and are represented by companies that sell their products within the United States and outside its borders. Shaw Industries' top competitors are:

Mohawk Industries Inc.: 37,100 employees and $7,905 million in revenues

Beaulieu Group L.L.C.: 8,300 employees

Interface Inc.: 4,873 employees and $1,075 million in revenues

Advanced Environmental Recycling Tech.: 664 employees and 97.84 million in revenues

D. Company Analysis

Shaw Industries is the international leader on the rugs and carpet market, with annual revenues of $5,834 million and a total of 31,496 employees, both figures following a continuously ascendant trend. The company encounters difficulties in regard to their employees' loyalty to the organization and bad publicity due to its involvement in law suits and usage of polluting chemicals.

E. Customer Analysis

The number of rugs and carpet buyers has decreased during the past decade, due to several reasons. A major tendency is that of eliminating large size rugs, and replacing them with small size rugs, placed in the centre of the room, instead of them occupying the entire surface. Some customers have totally eliminated the carpets and replaced them with laminated parquet floors or gritstone floors. As such, the consequence was that of an increased demand for hard surface floors, products also manufactured and sold by Shaw Industries.

Customers come from all economic and social backgrounds, as all classes use the products. Furthermore, the company produces a wide array of rugs, carpets and hard floor surfaces, at numerous retail prices and containing several features, as to meet the needs of as many customers as they possibly can.

11. Market-Product Focus

A. Marketing and Product Objectives

Product objectives:

implement environment friendly… READ MORE

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