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Rock of Ages Case Study

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Rock of Ages Case Study May 17, 2008 Executive Summary Rock of Ages (ROA) is an industry leader in granite quarrying and manufacturing, specializing in memorials. With nine quarries ranging through Vermont, Quebec, Pennsylvania, North Carolina, and recently Ukraine, ROA offers a variety of granite colors and grades for the selective consumer. Until January, 2008, ROA also had a retail division dedicated to memorials. Although ROA has been in business for over a century, economic factors in a global economy are eroding on their once rock-solid consumer base. Specifically, ROA has operated at a loss over the last several years, with 2008 being a transition year due to the discontinuation of the Retail …show more content…

Expansion of quarries and quarry business Until recently, ROA focused the business on domestic quarries only; owning and operating ten quarry properties in the US and Canada. ROA recently brokered a partnership with VIKA, Ltd., a Ukrainian quarrying company, to broaden their product offering and remain competitive with overseas competition. Reduce overhead and streamline operations Having recently sold the Retail division, ROA seeks to decrease redundant job functions and administrative office space costs. ROA focuses on product differentiation through quality. The only company who offers a perpetual warranty (guaranteed forever), ROA products set the standard for granite memorials. Situation Analysis ROA’s situation is defined largely by recent financials. They have demonstrated year over year decline in revenue, profit, and net income since 2003 as demonstrated in Figure 1 (below). (MSN Money, 2008) Figure 1 ROA’s 2006 and 2007 financials have been resubmitted to accommodate for the discontinuation of the Retail organization, providing skewed trend lines. However, one will still note continued decline of net income between 2006 and 2007 in spite of a slight increase in both revenue and gross profit. This additional loss has been attributed to the costs of discontinued operations (Retail), and constitutes a $5.2 million cost in 2007. The resubmission of 2006 financials have repositioned 2006 as a bounce-back year for

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