George is the SVP of Strategy and Innovative Solutions for G…
George is the SVP of Strategy and Innovative Solutions for Georgia Lumber Company, a family owned business that offers the “finest of materials in Pine and Hardwood lumber”. The firm is divided into two SBUs (Strategic Business Units). One SBU, North Georgia Mills, sells directly at wholesale prices to regional Building and Construction firms as well as to Home Improvement stores like Home Depot and Lowes. The other SBU, North Georgia Products, sells directly to the public at three retail locations located in North and Central Georgia. Lumber sold at these locations is specifically milled for barns and other out buildings one might find on a farm or a ranch. Although family owned, the business (Georgia Lumber Company) employs over 300 employees and in its most recent year, generated about $65 million in net revenues. The Georgia Lumber Company, does not own its own forest or timber production facilities and sources all of its wood from National Timber Inc. located in Cartersville, Georgia. The Georgia Lumber Company also does not have its own eCommerce site. All products, wholesale and retail, are sold through physical distribution channels. George knows from market research and industry analysis that Georgia Lumber’s cost is at the industry average for similar firms. The firm prices its products higher than industry average since the firm’s customers value its North Georgia roots, the consistent quality of the firm’s products, and the firm’s reputation for customer service. The firm’s “folksy” radio commercials are a big hit and entertain its rural customer base. George has been asked by Otis Thomsan, CEO and Chairman of the Georgia Lumber Company to develop a growth strategy for the firm. Mr. Thomsan has specifically set a goal of achieving 50% growth in net revenues over the next three years. Essentially the goal is to be a $100 million firm by FY2025. This growth would be significantly higher than the overall market growth rate which averages about 5% per year. Based on this scenario answer the next 5 questions (including this one). Based on our class discussion of Michael Porter’s generic strategies; what strategy is the North Georgia Products SBU currently pursuing?
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