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Forest Hills Paper Company

In: Business and Management

Submitted By chronowing
Words 639
Pages 3
1. Forest Hill Paper Company Ladarrius Cook Lawrence Comardelle Sydney Stover
2. Classification of Forest Hill   According to a recent IBIS World Report, U.S. revenue for businesses in the paper manufacturing industry is $49 billion. As of August 2013, average growth within this sector is -2.7%, employment is 67,325, and total number of businesses equal 152. On average, that equals 442 employees per firm, and $322 million dollars per firm (+/-). According to the case and information obtained on the U.S. industry size, Forest Hill can be classified as a “small paperboard manufacturer that produces a broad line of paperboard in large reels.”
3. Nature of the Industry  Forest Hill competes in an industry that is being stagnated by the rise in electronic communications (e.g. email) and imports.  According to the case, Forest Hill operates in a cyclical environment due to customer buying habits.  An advantage for Forest Hill is that there are high barriers to entry within this market due to equipment costs and governmental regulation.
4. Forest Hill Strategy  According to the case, “ as a small company competing against a commodity market, management believes Forest Hill must offer a full range of both products and services.  Thus, Forest Hill’s strategy is to create a niche based on service and rapid response to customer needs. (Not much innovation in the product, but top tier service, which can be quantified by value estimators.)
5. Complexities  Some examples of the complexities that drive overhead costs are as follows: production process (debarking, dissenting, and washing of the pulp), material costs of thicker products, and the increase of overhead costs due to product changes.
6. 105% of the material cost Product Grade Average Material Total Cost Reels per Cost per Batch Reel A 50 4800 240000 B 2 5200 10400 C 35 5600 196000 D 175 7400 1295000...

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