MGT6203 Water Fun Organization
Case Study JJ Water Fun Company
JJ Water Fun Co. (JJWF) is an organization that has contacted you for some help. As a consultant, you are going to assess their situation and address their concerns. Their concerns are at the bottom of this case study.
JJWF is a Dallas based company that originated in 2010 with two employees: owners Jason Smith and Jack Thompson. By degree, Jason is a chemical engineering and Jack is a mechanical engineer. Jason and Jack have been friends for many years. Tired of the corporate world, they started their own business. When the company began, Jason and Jack had two trucks which both of them drove. Initially, they focused on swimming pool servicing (cleaning the pools and spas and adding chemicals on a weekly basis). They service residential and commercial pools, both chlorine and saltwater pools. Over time, they expanded their business to include repairs and maintenance (replacing vinyl liners, repairing leaks in gunite/concrete, and resurfacing the pools, replacing motors and pumps, etc.).
Within the last year, they have started considering getting involved with pool construction. This seems to be a great opportunity for the organization, but the initial costs to enter this market are very high. They served as a subcontractor about three months ago on the construction of two large pool and did an incredible job. The money they made, minus their costs, was very lucrative to say the least. In addition to their residence and commercial accounts, they secured a long-term contract to maintain several municipal pools and several YMCA’s pools. Just these long-term contracts alone have tremendously increased their bottom line.
Something else that is very interesting is Jack developed a device that increases the longevity of the chemicals in the water. The device is very small, and it costed about $675.00 for Jack to make. As a courtesy to the customers, Jack had the technicians place these devices on all their customer’s pools and spas. Whereas in the past, the chemicals were lasting for about four days, this new invention prolongs the life of the chemicals for fifteen days. The cost savings in the use of chemicals when maintaining these pools and spas has been outstanding. Jack has started the process of patenting the device but has not completed the patent.
Everything seems to be going well and although the business is growing, they don’t have a strong presence within this industry; probably because they are lacking in marketing the company.
As their services expanded, so did their need for employees. They own their own building where they have their office and equipment. Currently, they have 14 employees (including Jason and Jack), a store where chemical and other pool and spa accessories are sold, 12 trucks, ten technicians (that work on the pools), and two employees that work in the store. Jason and Jack focus on marketing their business and only go into the field if there is an issue that the other employees cannot solve. Thanks to training provided for the technicians twice a year, Jason and Jack seldom go out into the field. The turnover rate is minimum. Within the last two years, the organization has lost only one employee, and whereas this is commendable, the organization really does not have a succession system in place. Jason and Jack feel they need a succession plan where they are preparing an employee for their next position. Overall, the organization seems to be doing well. Other than a few problems regarding “a poor repair” according to one pool owner, the organization services their customers very well.
Something else that is really interesting is Jason and Jack have empowered all of their employees to make decisions in the field with the customers. For example, if a customer feels the costs were too high and the technicians agree, they can reduce the price charged for their services. Jason and Jack give them a 10 to 15 percent liberty to negotiate the price. Although this is great customer service, some of the technicians are not comfortable with making this decision because they lack these specific skills. However, the employees are very innovative and creative when it comes to problem solving. In fact. Many will claim the organization has a competitive advantage in area of creativity and innovative. Within the last five years, the organization has incorporated as a partnership, and they took on about 75 stockholders.
Jason and Jack treat their employees with a great deal of respect, work with them on their schedules, provides three-week vacation, five days for sick leave, and benefits include medical, dental-, prescription-, short- and long-term disability, and life insurance. The company does not offer benefits for the employee’s families. The employees are required to pay a $25 co-pay when they go to the doctor, a $20 co-pay for dental visits, $40 for specialists’ visits, and a $20 co-pay on prescriptions. In addition, Jason and Jack believe there is a correlation between good health and exercising, and as a result, they reimburse their employees up to $35 a month. This has proven to be very effective because within the last two years, the company has recorded only five days where employees were sick.
The company focuses on the Dallas area, but are constantly getting calls outside of Dallas. Interesting to note, their customers are equally coming from North, South, East, and West side of Dallas. As a result, they are able assign two employees in North, South, East, and West Dallas, and thanks to technology, the employees do not have to come into the office on a daily basis. They are sent their work orders each day through the computer or mobile device. Two employees are “floaters” meaning they go in the area where demand in the highest.
There are 48 Swimming Pools in Dallas County, Texas, serving a population of 2,552,213 people in an area of 873 square miles. There is 1 Swimming Pool per 53,171 people, and 1 Swimming Pool per 18 square miles. (countyoffice.org). The swimming pool and spa business has many competitors, and as a result, the organization is in a monopolistic competition market structure. They have grown over the last ten years because of the quality of work they provide. They are very good about being at an appointment when scheduled and according to their latest data, they are on time about 98.5% of the time.
Whether it is their service, repair, or chemicals, their prices are about 10% lower than their competition, and if they enter the construction market, it too will be 10% below the competition. The economy is really good in Dallas. In fact, within the last two years, research indicates new pool construction has increased 30 percent. The market that is responsible for this is the millennials. Some analysts believe that COVID had something to do with this because people are staying home more. Also, research suggests that swimming and water activities is great exercise. This goes hand-in-hand with the millennial generation because they are of the healthy mindset.
Due to a City Ordinance, the Dallas area and Dallas County requires a fence to be placed around the pools for public safety. With this ordinance, the JJWF is considering branching out to include installing fences.
With the Dallas area growing, business is good, and according to the last economic forecast, growth will continue for the next 10 -15 years. The only concern the company is facing currently is some analysts indicated that the housing industry is about to burst. With homes being overpriced and building at an all-time high, economists think this market has hit its apex and will rapidly decline within the next six to twelve months.
Here are the organization’s financials.
JJWF has provide you with a partial list of their finances. Although they have confidence in you regarding their privacy, they wanted to limit their information to just a few categories they felt were important, and to prevent information overload. Below are their mission, vision, and financial statements.
Mission Statement
JJWF dedicates its products and services for the betterment of its customers. The organization focuses on providing reliable services and products that are environmentally safe. We are also committed to creating loyal customers but serving our communities by giving back.