Managing Operations in a Challenging Economy
In 2001,23 -year-old Jason Hughes was working part-time on a construction crew for Jim Spiess, owner of Prestige Builders of Lancaster, Virginia. Impressed with Hughes’s work ethic and capacity to learn, Spiess asked him to consider taking a full-time position with his rm. Hughes had been building homes every summer since his teens. But he told Speiss that what he really wanted to do was to start his own swimming pool construction company, and that he would do exactly that if he had the nancial backing. This sparked Spiess’s interest, and he asked Hughes to put some numbers together. What quickly followed was River Pools Spas’ rst business plan. The plan was just enough to give Spiess and Hughes the necessary enthusiasm and vision to start what today has become one of the premier pool and spa companies in the Maryland/Virginia area. During their rst year, they installed a handful of pools, and 2002 was a year of solid growth, during which they installed about 40 pools. Despite record rainfall in 2003 and River Pools still grew in leaps and bounds, and by the end of 2004 the business model changed focus. They decided to move away from installing vinyl-liner above-ground and inground pools. Although they would still oer above-ground pools and spas, there was now an understanding within the company that, based on industry surveys, customers wanted a pool with low maintenance, longevity and exceptional warranties, and aesthetic appeal. The only pool with these qualities is berglass/composite, and so the change was made. The renewed focus brought about more record years from 2005 throughout Such growth put River Pools \& Spas in the top 5 percent of all inground pool companies in the country. It has also established the most popular and informative educational blog and video library in the swimming pool industry, showing the owners’ commitment to excellence. Both of the owners are very family-oriented and believe they owe their success to moral values, great employees, dedicated customers, quality, service, and integrity. Beating the Odds and the Economy In River Pools Spas had over 75 inground pool installations, 20 full-time employees, and a beautiful new 10,000 -square-foot showroom/warehouse in Tappahannock, Virginia. Despite being a down-year for many companies, 2006 continued to show great promise for the future of the company, with another 80 inground pools being installed in the area. The following year was River Pools \& Spas’ greatest accomplishment to date. In an industry that had started to decline in most states due to the slow housing market, River Pools \& Spas continued to demonstrate strong growth. Its nal results in 2007 were 88 berglass pool installations. Spiess and Hughes had a good system until the economy crashed. They were making plenty of money but had far too many employees and started to lose ground. They’re now down to six employees: a bookkeeper, an oce manager, two production managers – one of whom doubles as the service manager-and two installation crews. They had been renting space at a retail location at per month, so they bought their own building and closed up the retail space, which was break-even at best. Their current oce is a big metal building with a warehouse and ve oces, and an empty showroom. After the brick-and-mortar plan was deemed too expensive, they moved everything to the Web, and this became their new storefront. They now have the worldleading website for berglass pools and get requests from Utah to Costa Rica. Such growth has put River Pools & 2004, 2007. 2005, & $8, 000 Find study resources 숿 2/3 쇲 JFHP, Ex 4 RPS, Ex 2 쇰 Textbook Solutions / Small Business Management: Launching & Growing Entrepreneurial Ventures / Ch CVC, End of Chapter, Ex 1 \& Spas in the top 5 percent of all inground pool companies in the country. One might assume that this growth has hurt quality, but that is clearly not the case when every potential customer receives a reference list with every inground pool customer (over 550 ) the company has ever installed a pool for, including the homeowner’s name, address, and telephone number. View the video and answer the questions that follow.
Questions
Review the history of the operations of River Pools & Spas, from start to success to scaling back. How was the company aected by scaling back? What changes made it more competitive?
Does this company use a synchronous management approach?
