Porterhouse Limited

2 . Market Information

The marketplace that Porterhouse operates in within the woollens area could be described as the niche, fabric-inspired garment and Start of case study furnishings market.

More than 70% of the products manufactured by Porterhouse Ltd. are exported, with America being the main market followed closely by the U.K., Japan and Continental Europe.

In the late 1980s the company opened a showroom and sales office in New York which services the U.S. market and in particular supports the agents that cover the different U.S. regions on Porterhouse’s behalf, supported by frequent visits from the Director of Sales and Marketing based in Drogheda.

Porterhouse operates in a niche market, selling to large department stores, mail order companies and smaller speciality stores. The company currently has 700 customers. The market in the U.S is split between mail order and speciality stores serviced from the New York office and one very large customer, QVC Shopping Channel, serviced from Drogheda.

The company sells to 14 countries using a network of sales agents. These agents are commission-only agents who have an excellent knowledge of the market in their particular country. These agents are not exclusive to Porterhouse and represent other companies also. Porterhouse shows its products at trade shows throughout Europe and U.S.

On the Start of case study front a steady year-round business has been established catering not just for the seasonal tourist traffic but for the local market. Porterhouse does most of its year’s business in six months. Showcase, held at the RDS in Dublin each January, is the main exhibition of the company’s products and major customers in the Irish market will place their annual business at that time. The main delivery period is between March and September. 20% of customers account for 80% of the value of the company’s orders.

Competitors:

Companies in Ireland making similar products are Avoca Handweavers and Branigan Weavers. In the European marketplace, competitors include a company called V. Fraas and also a number of traditional Scottish woollen mills, such as Calzeat and Lochcarron.

3 . Problem Definition

The key business drivers encouraging Porterhouse to adopt an eBusiness solution include the following:

• To develop the turnover of the company from IRP3.5 million per annum, there was a need to increase the customer base and the company believed that eBusiness could provide such an opportunity.
• The company had a communications problem: Porterhouse has a DOS-based textile network, customised to the needs of its industry. 20 of the staff were on this network. A major thrust for this eBusiness initiative was that the company did not have email, either internal or external. Customers were requesting to contact Porterhouse by email more and more often, so, with the help of a grant from Enterprise Ireland, the company upgraded its network and introduced email. Before this, members of staff were sharing fax machines and communications were not ideal.
• The company knew that its products would lend themselves well to a website. It wanted people to be able to see its quality products on the Internet and believed that customer ordering online was the main route forward.
• The emergence of a website was considered appropriate to spread the net and entice new customers not otherwise easily contactable. The web would be the first port of call and this introduction could be done at a fraction of the cost of cold calling. All the company’s ticketing or labelling would carry the web address and this would encourage potential customers to pursue and enquiry. Colour brochures date very quickly and updating a website when new colours/styles are produced is faster, more efficient and more economical. Customers can download the images.
• There was a possibility that Porterhouse’s yarn suppliers would allow the company to buy by e-procurement.
• Porterhouse believed that its end-of-line or disposal goods could be sold electronically to its customers.
• The existing process for customer ordering was working reasonably well. Agents and customers faxed or posted their orders to Porterhouse in Drogheda. The customers were then notified by fax of a delivery date and a cancellation date for each order, by which date a client could cancel an order if it was not available on time. The company believed that the ability to control an online catalogue by only promoting products from its core range would be more profitable.