Afton Industries Case Study

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Introduction Afton Industries is a ‘one product’ company; they manufacture roofing tiles. The company consists of five major shareholders who are also members of the board of directors. Afton is in operation since the year 1998 and during those years, they were able to create a strong reputation on the market. They are facing a leadership position because they are the largest local producer of roofing tiles and their competitors do not have the same manufacturing facilities. As demand for tiles has increased during the years, Afton wishes to expand the company so as to increase the production capacity of the business to be able to satisfy consumers’ demand. The company is looking for ways to reduce cost (fixed cost e.g. rent), to increase sales and maximise production and profits. Below you will find the different ways, decisions and risks the company will/must take to keep this leadership position. Nature of the market that Afton Industries is competing in. Describe the nature of the market place for roofing tiles that Afton Industries is competing in (you can use porter’s five forces model as part of your analysis, if relevant) First of all, the market in which Afton is operating in is an oligopoly market which means that it is dominated by a small number of sellers. Afton do have some competitors who are GAF Corporation, Monaro and Georgia and Pacific Corporation but they do not have the facilities that Afton has on the market that is why Afton remains in the leadership position for the time being. But the level of competition is increasing, large manufacturers are supplying the regions in which Afton is located and are being well-known too. Secondly, there is the power of the buyer; the demand for roofing tiles is dependent upon the housing market and if people already have tiles or have other preferences or taste, the market for tiles will certainly face a
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