Business Consultation for Conn Manufacturing

Jacob S. Clabaugh

Central Community College. Hastings NE.

 Conn Manufacturing is a successful business overall. The company has an innovative

product that no competitor can truly match. Mr. Conn has built this company from the ground

up, has seen it grow to a much larger scale than it was likely conceivable at first. However, the

past few years have shown stagnant sales, making Mr. Conn—who wants to see the company

expand and grow even more—unhappy with the organization’s performance. While there is a

plethora of blame being thrown around, the root of the problem has yet to be disclosed.

As we go through the company and look for the root of the problem, we will address several

areas of concern. First is a SWOT analysis. By addressing the strengths, weaknesses,

opportunities, and threats the business has and/or faces, we should have a better idea of where

any problems or conflict are coming from. Next, we will analyze the marketing mix that Conn

Manufacturing utilizes, and recommend any possible changes to it that should benefit the

company. After that, we will discuss Mr. Conn himself as a manager, specifically his

management skills, his use and understanding of the four management functions, and his

management style—and what, if anything, he can do to improve. Lastly, a possible business deal

with Argentina was mentioned. Since this expansion could be a very good opportunity for Conn

Manufacturing, we will take some time to research the benefits and risks of expanding into

Argentina, whether it would be a strategic move for the company, and if so-what entry mode

which should be used. If Argentina is not a good prospect for expansion, we will discuss other

possible regions the company could look towards for expansion.

SWOT Analysis

Conn Manufacturing has many strengths and weaknesses. The company also has an array

of opportunities it should consider, as well as some threats it needs to address. This SWOT
analysis that will follow shortly will address these strengths, weaknesses, opportunities, and

threats.

Internally, Conn Manufacturing has several strengths. Having the skilled workforce that

this company has, helps it stay competitive; fewer mistakes are made when more skill is

involved, which helps with productivity and profitability. The equipment used by Conn

Manufacturing is up-to-date and in good, working order; this is paramount to the success of the

business. Old worn out equipment that breaks down constantly does nothing but hurt the

business and decrease productivity as well as morale. Mr. Conn is a forward thinker, his

innovation is what started this company, and he has the drive to create more innovative products.

Innovation creates new products, new products generate more sales, more sales means more

expansion.

Externally the strengths for Conn Manufacturing are as follows: No competitor has a

product that can truly compete with the self-cleaning cattle bunk Conn Manufacturing sells. This

feature adds value to the customer. This means that not only is it more desirable for many

farmers, it can also be sold at a higher margin. A higher profit margin means that the company

can bring in more profits to work on expanding more in the future. The self-cleaning cattle bunk

is so well known that it made its way all the way to Argentina. This bunk is an innovative

product, no matter where one would go. Last, customer satisfaction with the self-cleaning bunk

is very high. When customers are happy with the product they are willing to buy it again when

the need arises; also, if they are satisfied, they may recommend the product to others, possibly

increasing business.

As with all businesses, Conn Manufacturing has some weaknesses as well. Internally,

managers and employees alike are demotivated, there are no raises or promotions without Mr.
Conn’s approval, but the workload and responsibilities are increasing. The staff in sales support

are overloaded and do not communicate as they should. Sometimes they even ignore or prioritize

requests because of the workload. Virtual sales teams do not communicate well together, they

feel forced and the team aspect is not really there. All of this decreases morale and motivation.

Externally, the company uses a direct sales approach. While this is a great way to gain

customer trust and create relationships with them, it is not always convenient for some, and the

inability to go to the store or online to buy one may turn them away from the product. Since the

product is an innovative one, with added value, it costs more than other cattle bunks. Some

people just do not want to pay the extra money, regardless of value, convenience or ease of use.

A higher price has its inherent weaknesses. Cattle bunks are made out of durable materials, they

are meant to last. This creates a problem, or weakness, involving previous customers not buying

again for a long time because the product lasts so long. Durable products have this weakness

built into them, and would not sell otherwise, making this “weakness” a double-edged sword.

Conn Manufacturing has opportunities to grow, expand, and make itself better. Internally

the engineering department is constantly working on product improvement. Anything that can

make an already great product better, and thus more competitive, can create opportunities for the

company as well as being one itself. Mr. Conn is a forward thinker; he is constantly looking for

the next big thing. His latest idea, the “Cattle Fountain” could be a great opportunity for the

business. As stated in a previous section, new products create more sales, more sales create

expansion. Mr. Conn has stated that he wants to expand more, this would be an excellent way to

work towards that.

Outside opportunities are important as well. Mr. Conn has said that that are areas within

the United States that have not been reached yet. These untouched areas could prove to be good
opportunities. By reaching these areas, Conn Manufacturing can increase sales without

expanding outside of the United States. While staying in the United States and reaching as many

domestic consumers as possible is important, we should not forget about the big opportunity that

was brought up earlier: Argentina. By expanding outside of the United States, this company

could increase sales dramatically and begin to tap into a huge international marketplace. It’s only

logical that farmers and ranchers all over the world would be interested in a self-cleaning feeding

bunk.

Every business has to deal with threats, both internal and external. Internally, Conn

Manufacturing faces several threats. By not trusting his managers’ judgment and bypassing the

supervisors, Mr. Conn is demotivating both his managers and their subordinates. Continuing to

do so could cause many problems; people quitting, mistakes being made, other consequences of

low morale-all possibilities. Poor communication within the company is also a threat to Conn

Manufacturing. When employees do not communicate or ignore requests-like the sales support

staff- because they feel overworked, it becomes a problem for more than just their division.

Important deadlines can be missed, projects can get lost or not done at all, or other such disasters

can happen. There appears to be a widespread lack of motivation and enthusiasm throughout the

company. This in itself is a threat to the company. If employees are not motivated to do their

jobs, things can get missed, or done incorrectly.

Conn Manufacturing may not have any control over external threats but should be aware

of them. With a product such as a cattle bunk and other similar products that Conn

Manufacturing produces, it is difficult to come up with new ideas and innovations. Some

industries or sub-industries, such as the one Conn Manufacturing is in, do not have as much

room for innovation as others. Competition is always a threat for any business, Conn
Manufacturing is not immune to this. There are many other brands of cattle bunks, none have the

self-cleaning feature, but comparable bunks are less expensive. This is because of reasons such

as value, and added materials needed to make them, but some consumers will inevitably buy the

less expensive models and compromise on the self-cleaning feature. The economy is also a

factor. Whether it is doing well or not at this time does not mean it will be the same in the future.

Since the economy goes through cycles, with fluctuations, it is hard to know what the next fiscal

year will bring. A downturn in the economy could mean a decrease in sales growth, or even a

decrease in sales altogether.

Marketing Mix

The Marketing mix is essential for a business’ success. The four ‘P’s- product, price, place, and

promotion are the main factors in the marketing mix. The product is the actual product the

business sells, the price is the compensation the business gets from the consumer for the product

sold, the place is the location (physical or otherwise) of where the product is sold, and the

promotion is the process of the business putting its product out in public for the consumer to see.

Conn Manufacturing’s main product is the self-cleaning cattle feeding bunk. This is a somewhat

standard model of feeding bunk, with a patented method of self-cleaning. One way to strengthen

this factor would be to offer different models, all with the self-cleaning feature. The standard

model is the normal size, galvanized lined one. Adding a new option could increase sales. The

first new model would be a heavy duty bunk made out of heavier gauge steel stronger support

arms, and heavy-duty lining on the inside. The heavy-duty model would be of higher value,

making the profit margin higher for each unit sold.

The price is essential for the marketing mix. The price determines the consumers’ perception of

the value of the product. Since the product already has added value compared to competitive

models, it can be sold for a small premium. This makes the consumer aware that not only is it of

high quality, just like the competitors, but it also has another feature. Doing a basic Google®

search, we can see that models similar to the basic Conn model are about $150-200 plus or minus

a few dollars. Setting a retail price at $250 would not be unreasonable. The heavy-duty models

from competitors according to a Google® search are around $500. Setting a price for these to be

sold around $600 would be conceivable. This would be a 25 percent and a 20 percent increase

over competitors’ standard and heavy duty bunks, respectively.

Conn Manufacturing sells its products via salesmen throughout the country using a direct sales

approach. This is how Mr. Conn started his business, by going to farmers and showing them his

product one at a time. With a larger operation, this approach does not work quite as well. The

Conn Manufacturing website should be updated to include an easy to use the online catalog, with

specifications and features of all products. This, with promotions sending consumers to the

website, could potentially increase sales and put less workload on salesmen.

Conn Manufacturing should invest in online advertising. Google® advertising would be a good

step towards bringing in new customers. Another form of media would be Farm & Ranch

magazine and Hobby Farms magazine. Increasing consumers’ exposure to the product is the first

step towards better sales.

Management: Mr. Conn as a CEO

Mr. Conn is said to be an exceptional businessman. He is competitive, innovative and very

forward thinking. He started this company in his own workshop on his farm. He knows how the

feeding bunks are made, he knows how to sell them, and he is very involved in his company.

There are four functions of management that every manager should know and apply to their

business. Planning is the first one, this is the most important function, and subsequently, the most

time consuming; it involves setting goals and setting up plans to achieve them. Organizing is the

next, this is where the manager physically sets up the organization to achieve the goals set in the

planning stage. Leading is where the manager helps his subordinates achieve the goals, this can

be done by helping them when they need it, giving them reassurance or motivating them.

Controlling is where the manager compares the goals he set to the real performance of the

company and takes corrective action as needed.

In planning, Mr. Conn should work on his goal setting. He has stated that he wants the

company to expand but he was not specific. Goals should be achievable, realistic, and somewhat

challenging. If Mr. Conn were to take some time, set goals that met those criteria, and set up the

company to achieve them, he would be much happier with the results.

The organization stage is where Mr. Conn should be giving everyone in the company

everything they need to achieve the goals he has set for them, within reason, of course. He needs

to trust his human resources personnel and let them hire people, especially in situations which

require a quick hiring process, without his constant involvement. This also goes for times when

something needs to be procured quickly and waiting for his approval costs precious time.

In the leading function, Mr. Conn is said to have been very good in the past, before the

company grew to its current size. He would ask about employees’ families, give them pats on the

back and perform similar, motivating acts. Now, as it seems, he runs around, doing his
managers’ jobs for them, bypassing supervisors, and going on runs with salesmen. It seems as

though Mr. Conn needs to pull himself back a bit. He needs to help his managers when they

request it, and let them do their jobs otherwise. He should be more worried about keeping his

employees and managers motivated than about individual performance.

Controlling is where the manager compares goals to the actual performance. Mr. Conn

should look at the overall performance of all the departments, not worry about the individuals.

The individual performance should be corrected and handled by his managers and supervisors

under him.

There are four skills of management every manager should have at differing levels.

Technical skills are the specific skills used for a specialized job, generally the lower on the

corporate ladder, the more one will need technical skills. Conceptual skills are the skills that

allow one to see the ‘big picture.” The higher on the corporate ladder, the more conceptual skills

are used. Human skills are the skills associated with working with people. These skills include

being able to motivate, understand the people and behavior, and keeping morale up. Core

competency is the last one. While not so much skill, as an organizational skill set, it is what

allows the organization to stay competitive. Without a strong core competency, sales can become

stagnant, or even fall.

Mr. Conn is strong in technical skills. He built the cattle bunks and sold them himself for

the first years of the business. If anything, his technical skill set is arguably too high for his

position.

Mr. Conn is also strong in conceptual skills. He sees the big picture. He wants to expand

and create more innovations.

 Some work does need to be done with Mr. Conn’s human skills, however. He does not

delegate, he simply just jumps in and starts doing work that his employees should be doing. He

needs to trust his managers more, they are capable of their jobs and he needs to understand that.

His job should be to motivate people more, not to intimidate and belittle them.

The company’s core competency is likely not as high as it should be. Sales are stagnant,

which is a sign of inadequate core competency. Competitors are able to market their products as

being of equal or better value despite the lack of a self-cleaning feature. Mr. Conn needs to allow

his subordinates to bring up ways to increase productivity, he needs to listen to them, and allow

change to happen when it is beneficial to the company.

Leadership Style

Mr. Conn is an authoritarian leader. He takes “the bull by the horns” and he bypasses his

managers. It seems as though he does not trust his managers or his employees, and feels like he

is the only one who can truly get anything right.

He has enough managers throughout the company he could easily use a laissez-faire approach

and not have to worry about much. By going with this approach, he would be there to help his

managers, and give advice when needed, but he would not be overworked like he is now. His

main concern would be creating goals for the whole company and making sure they were met by

his deadlines. By using this approach, he would have ample time to go fishing and take the

occasional vacation-as he deserves.

International Expansion
A businessman in Argentina has made an offer to Conn Manufacturing to introduce the Cattle

Bunk into the market there. This could be a great opportunity for Conn Manufacturing,

especially with the decrease in sales growth as of late.

The best way to enter this market would be to enter into a joint venture with the business with

which the businessman who contacted Conn Manufacturing is affiliated. By entering into a joint

venture, Conn Manufacturing would be able to share in the profits, as well as not take on all the

risk with doing business in Argentina. The other business, as a partner, would be very helpful

with cultural and language differences and barriers. This will also reduce costs for Conn

Manufacturing.

A major drawback would be that Conn Manufacturing would have to share profits with the other

firm. Another is that, unless the firm is very careful, there is a chance that the joint firm could

possibly attempt to steal technology or processes used by Conn Manufacturing. The last possible

drawback is that there is a chance that the two firms could have conflict or disputes that could

make the two firms part ways, resulting in a wasted investment for Conn Manufacturing.

References

Hill, C. W. (2011). Global Business Today (7th ed., pp. 429-30). New York, NY: McGraw Hill-

Irwin.

Jones, G. R., & George, J. M. (2013). Essentials of Contemporary Management (5th ed., pp. 7-

16). New York, NY: McGraw-Hill/Irwin.

Grewal, D., & Levy, M. (2013). Marketing (4th ed., pp. 7-10). New York, NY: McGraw-

Hill/Irwin.