Delta-H SWOT Analysis

Strengths:

  • Delta-H is very technically competent company. They are recognized as experts within the local area.
  • Delta-H takes great pride in achieving customer satisfaction, winning customer trust, and maintaining customer loyalty.
  • Delta-H has an expertise that allows them to work with a wide variety of industries. Whether it is using heat for testing, tempering or for electronic painting (?).
  • Delta-H does very well at finding used equipment and upgrading it to specifications. When this is done, the customer often can save significant amounts of money.
  • Delta-H get referrals from Eclipse.
  • Delta-H does service work for Despatch Industries.
  • Delta-H has been very successful in developing a respected service business. (nearly 60% of business.)
  • Delta-H has a very steady service business. It can count on $35,000 – $40,000 per month from this side of the business.
  • Delta-H’s owner is married to a woman who is a chemistry/physics teacher in the Pickerington school system. Her income is stable. And from Ronald’s comments, she is very supportive.
  • Delta-H has a part of its business called Data Design. This segment of the business is a cash cow. (nearly 15% of income)
  • Delta-H has a “virtual warehouse” that allows Delta-H to get product very quickly without having to maintain inventory.
  • Delta-H charges $80/hour for its regular services. This is towards the high end of rates, but Delta-H believes it is the correct rate for its business.
  • Delta-H can design furnaces so that they are IRI approve-able. Due to the expense of acquiring the approvals, Delta-H prefers to just make them “approve-able”.
  • Delta-H calibrates companies equipment so that it adheres to ISO 9000 standards.

Weaknesses:

  • Delta-H has difficulty finding good technicians.
  • Delta-H has trouble training the good technicians that it does find.
  • Delta-H presently has lower overhead, but the owners personal strength is not the business side of the business. The owner would rather be out working with a customer than shuffling papers.
  • Delta-H technicians work under conditions that are dirty, hot, and not at all glamorous.
  • Delta-H turns business away due to lack of staff.
  • Delta-H has poor financial information. This is because of a series of problems with accountants. The books from January 1st, 1998 to the present are being entirely updated.
  • Delta-H’s owner is VERY risk adverse. He has 3 kids and is concerned about the finances necessary to pay for school etceteras.
  • Delta-H’s rent is 8-9% of annual sales. Typically, this gives the company more space than is actually necessary. The owner loves the location, but if cutting expenses would give the owner less risk aversion, this needs to be considered.
  • Delta-H’s owner is VERY paranoid about being burnt by employees moving on. He is concerned about investing time training employees and then losing the employees to their own businesses.
  • Delta-H’s business is very dependant on traveling. Travel time makes less money and travel is 40-50% of the time spent on service calls. This lends itself to a lot of efficiencies in use of time.
  • Delta-H does some consulting for customers. Because this is a more profitable side of the business, the owner wishes he could do more. (nearly 6% of income.)
  • Delta-H has no sales people.
  • Delta-H is typically at the call of the customers. Delta-H employees may not know today what they are doing tomorrow.

 

Opportunities:

  • Delta-H is able to save customers considerable money when Delta-H sells the customer used equipment. Although Delta-H does well when they are able to do this, Delta-H cannot carry inventory on these items.
  • Delta-H has a web site, although, primitive that might offer some opportunities for building awareness.
  • Delta-H has a patented product referred to as the “FIST”. This product allows Delta-H technicians to handle most service calls remotely. This would allow Delta-H to work with many more customers.
  • Delta-H owner expects to receive his Professional Engineering (PE) certification in the fall.
  • Delta-H has implemented some Preventive Maintenance programs, but Delta-H is new to the idea. Delta-H would like to set up plans that would allow varying degrees of service.
  • Delta-H would like to go into a customers site and rather than get paid an hourly rate, Delta-H would like to be paid a percentage of the savings the company has due to Delta-H taking over the maintenance of the furnaces.
  • Delta-H could provide set packages with Delta-H services. This would allow a salesman to sell Delta-H services without understanding the industry to deeply.

 

Threats:

  • Delta-H’s has had one employee who become trained under the owners instruction and then moved on. This makes the owner very leery of letting employees work to closely with customers. This also makes him reluctant to spend excessive time working with his employees.
  • Delta-H mentioned Honeywell developing a competitive product to the FIST. If Honeywell wanted to compete, the FIST would not have a chance. If, however, Honeywell decides to compete in the larger customers, the FIST can still be competitive.
  • Delta-H is a small company with 3 full-time employees. If a key person leaves or is injured, Delta-H might not be able to continue.
  • Delta-H is not a glitzy company. If a competitor came into town and did a strong marketing campaign on the type of customers Delta-H calls on, Delta-H’s business could be hurt.
  • Delta-H has 3 Million dollars of liability coverage. If an accident (e.g. explosion, death etc.) occurred, Delta-H would be out of business.
  • Delta-H has built up a debt in the development of the FIST. This debt may cause future problems.

FIST Strengths:

  • Save customers money
  • Make him money and allow the reduction of travel time
  • In the past there was great interest
  • No real competitor
  • Make technicians obsolete
  • The angels gave him money, but owner gave up no part of the business.

FIST Weaknesses:

  • No marketing plan
  • No real pricing strategy
  • No well-though out support strategy
  • Built using early PC technology-it is very outdated.
  • The lack of staff and the letting go of FIST related staff makes it difficult to make immediate improvements in the product.
  • Staff not available for debugging equipment. When momentum was strong before, the inability to debug, caused the momentum to dry up.

FIST Opportunities:

  • 90% of the companies he calls on have 50 or less employees.
  • Hooking up with Despatch and selling a FIST with all systems
  • A salesman that calls on him has go him into a couple of companies and is well connected. The owner is concerned about associating with this salesman who is young and has possible chemical dependencies.
  • FIST is patented. This gives the owner full documentation on the FIST and eliminates the need for the developers of the product.
  • Because the company is owned entirely by Richard and his wife, part of the company could be made available to the right company. This would allow the company to market the new product without going into debt further.
  • Franchise the FIST.

FIST Threats:

  • The owners risk adversion

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