Bandon Group Case Study: US Family Owned Distributor of Copiers and Office Equipment

History and Growth Strategy

Coursework Assignment 
As part of this module, you are required to produce a 3000-word report, which is 30% of MM258 Assessment. 
Business Background Bandon Group is a US family owned distributor of copiers, electronic printers, faxes, and other office equipment. The company was started by Bud Bandon, who bought a copier dealership in Phoenix in 1977. Through Bud's entrepreneurial skill, motivation, and commitment to customer service, Bandon Phoenix aggressively gained market share and grew to $10 million in sales in the Phoenix marketplace by 1986.

 

One of Bud's greatest accomplishments was the creation of Bandon Leasing Company, which held leases on copiers and electronic printers and became a major source of positive cash flow. Excellent customer service, technical support, and innovative products enabled the company to grow continuously through the 1980s, and profits enabled Bud to purchase another copier franchise in Salt Lake City. By 1996, the Salt Lake City dealership had grown to $10 million in sales.

 

When Bud passed away in 1998, his two sons, Ed and Steve Bandon, continued the business. Their growth strategy was to acquire additional dealerships in growing markets. By 2010, Bandon had grown to four divisions in four different markets in the western U.S., i.e.; Portland, Oregon; Phoenix, Arizona; Salt Lake City, Utah; and Denver, Colorado. Each division president is responsible for developing sales and marketing strategies that will meet customers' needs in the particular market segment.

 

This decentralised sales strategy enables divisions to meet the needs of their respective markets. The corporate headquarters (in Phoenix), handles central administrative functions and information systems support for order processing, billing, accounts payable, and accounts receivable. All divisions report to Ed and Steve Bandon, the co-owners of Bandon Group, Inc.

 

The primary objective of senior management is to generate a 10% profit on sales, so profits can be used to re-invest into the overall enterprise, and to purchase new divisions in markets that are growing in importance. The mission, values, goals and objectives of Bandon Group, Inc., are expressed in the views of Ed Bandon, "Our objective has always been to provide office information systems supported by a networking infrastructure which facilitates information sharing and systems integration." In addition, notes Steve Bandon, "Bandon Divisions can offer value-added services and technology integration, which meets the needs of customers in their respective marketplaces.

 

Our responsiveness to customer needs has always been key to our profitability and to our market success." One of the important elements of the company's profitability is its excellent sales organisation and professional service organisation. Its salespeople receive extensive training from experienced sales managers. Its service technicians are among the best in the industry and maintain high levels of expertise in problem diagnosis, troubleshooting, and reconciliation.

 

The competitive environment includes large national manufacturers, such as IBM and Xerox, which are managed through branches in major metropolitan areas. Bandon Group and its divisions have effectively competed by serving the needs of mid-market companies (i.e. $25 - $400 million in sales) by offering mid-tier equipment (e.g. copiers, faxes, electronic printers) at cost-effective prices. Their ability to offer quality-manufactured products (e.g. Canon, Minolta, Kyocera Mita, Sharp) has given their dealerships a reputation for quality and superior service at cost-effective prices.