Dawson Lumber Company

Topics: Balance sheet, Accounts receivable, Financial ratios Pages: 4 (1190 words) Published: September 20, 2013
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Name of the business: Dawson Lumber Company

Nature of the business: Wholesale Lumber Business

Marketing Analysis:

The Dawson Lumber Company was founded in the 1870s by the Dawson family to market the lumber on their land. In 1950, Dawson Lumber owned four small lumber yards in the Cornwall area, each operating as a separate company. However, in 1965, J.H. Dawson became president and amalgamated the four companies into the Dawson Lumber Company. The company had acquired seven more lumber yards north and west of Cornwall, Ontario but further growth was limited by J.H. Dawson’s belief that growth should only be financed by internally generated funds. For over one hundred years, Dawson Lumber had been dealing with the Cornwall branch of the Eastern Bank and, in 1993, borrowed approximately $1.5 million to finance inventory build-up needed to meet seasonal sales. From April to November, 77 percent of the sales occurred evenly, while 23 percent were evenly distributed from December to March. The demand is seasonal which comprises of 8 months peak season and 4 months off season for which the sales remain low. The company’s sales were between $10 and $15 million in the late 1980s, with 90 percent being wholesale sales to local residential contractors.

After the retirement of J.H. Dawson, his son Doug Dawson took over the business and reorganized the company’s 11 branches into three regions. The Northern Region served an urban market and consisted of three yards just outside the city of Ottawa. Four lumber yards in the Cornwall area made up the Eastern Region and five lumber yards near Kingston formed the Western Region. The Eastern Region was a rural market while the Western region was partially a resort and partially an urban area. Each region was made the responsibility of an area supervisor who had worked for many years in the company’s lumber yards. A management committee consisting of the president,...
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