...Case study #1 – Convington Corrugated. Pg 87 Larisa Harrison grimaced as she tossed her company’s latest quarterly earnings onto the desk. When sales at Virginia-based Covington Corrugated Parts & Services surged past the $10 million mark some time back, Larisa was certain the company was well positioned for steady growth. Today Covington, which provides precision machine parts and service to the domestic corrugated box and paperboard industry, still enjoys a dominant market share, but sales and profits are showing clear signs of stagnation. More than two decades ago, Larisa’s grandfather loaned her the money to start the business and then handed over the barn on what had been the family’s Shenandoah Valley farm to serve as her first factory. He had been a progressive thinker compared to many of his contemporaries who scoffed at the idea of a woman running a machine parts plant, and he saw no reason why a smart, ambitious 27-year-old woman couldn’t run anything she wanted to. His old-fashioned friends no lon- ger scoffed when Larisa became one of the major employers in the local area. Today, Covington operates from a 50,000 square-foot factory located near I-81 just a few miles from that old family barn. The business allowed Larisa to realize what had once seemed an almost impossible goal: She was making a good living without having to leave her close-knit extended family and rural roots. She also felt a sense of satisfaction at employing about 150 people, many of them...
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...Summary of the case: Covington provides machine parts and services to the domestic corrugated box and paperboard industry. Covington has quarterly earnings of $10 million, lead owner, Larisa Harrison, then thinks that the company is doing well and ready for continuous growth. There is roughly 150 employees from the local community at Covington. Most of these employees are a little bit older and more than likely coming to the age of retirement. Due to the unstable economy and rapid competition from other businesses has the company facing a rough time. Covington was losing hundreds of smaller plants that they once served. With that happening, the company would have to find other ways to grow. Larisa is getting offered advice from some high level employees and hoping they can solve the problem. The issue of the case: The issues of this case has to deal with the company not being able to employ many people. The near 150 employees are mostly neighbors and almost all from the same community. The company is suffering from issues that have to do with hard-working employees nearing retirement. Now, they have to deal with replacing all the employees. The other issue that is happening is the market share. The company had a market share of roughly 70%, but is being reduced on a significant level. Also, many other companies have emerged and started to manufacture the same products that Covington does. The company has started losing several industries in the United States because...
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