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Oxygen Paint Company Scenario Case

Oxygen Paint Company Scenario

Scenario narrative

The Oxygen Paint Company is a privately owned South Island (Te Waipounamu) company originating in Blenheim (Waiharakeke) which manufacturers paint and coating products. Oxygen’s main operations are grounded and based within New Zealand (Aotearoa) with 75 employees across both islands.

The business was started by current owner Jack Taylor back in 1985 after a lengthy career in the trades as a paint and decorator. Today the business is more of a family affair with Jack’s two sons John and Willie recently getting involved after leaving school. After learning the workings of the business and doing further research into the make-up and new industry trends in the industry it has become apparent that the range of product’s this long-established family business is manufacturing contains potentially dangerous properties like lead, chromates and in some cases seriously hazardous heavy metals like cadmium, cobalt, and chromium.

The plant in Nelson (Whakatū ) is still using the old second-hand machinery and equipment installed in the mid-eighties and has been on the receiving end of bad press locally due to poor waste management processes when there was some chemical spill that entered the local reserve. Although contained with minimal damage. The locals are now asking questions and concerned that it could happen again with lethal consequences.

They supply a vast range of different paint application for residential, marine, industrial and commercial to many users across New Zealand (Aotearoa). Oxygen has gained a high reputation for its quality products and continued innovations which has allowed it to become a key leader within the paint industry. This formidable reputation for quality and continued innovations over the years is something the brothers are very keen to maintain and protect.

There has been a noticeable drop in demand and sales of the business’s products in the North Island (Te Ika a Maui), and the young brothers have learnt that is could be related to changing consumer attitude towards the use of chemicals in paint and the market responding to and purchasing more environmentally friendly waterborne products.

Oxygen paints are widely available through a variety of resellers and large retailers nationwide but due to the increasing awareness around harmful unsustainable paint product these distribution channels and substantial high sales volume in now at risk.

One of Oxygen’s main competitors in Hawke’s Bay (Te Matau-a-Maui), albeit a small local manufacturer has just launched the country’s first entire paint recycling programme, and wants to roll this initiative across all areas of the North Island (Te Ika a Maui) it operates in. This programme provides a free drop off point for all unwanted paint, it will accept all brands and trade returns. The aim is to prevent unwanted dangerous product heading for landfill.

Another challenge for the brothers is the new initiative which is a Government endorsed independent label designed to promote and embed sustainable business practices in industry. This label allows consumers the trust that a product has met strict environmental standards. Manufacturers who obtain this license must demonstrate that they actively remain environmentally sustainable throughout the products life cycle. This includes the sourcing of safe raw materials, manufacturing processes right through to the disposal and/or recycling at the end of the products life. These are backed up and monitored by independent assessors.

John and Willie see this as an important point of difference within the industry and gaining this endorsement is a statement from those who pursue it. The changing market perceptions is a real concern for Oxygen Paints portfolio of products, more and more of their customers are asking questions about alternative safe and environmentally friendly paint products.

Jack has stated that he is struggling to keep up with all the changes and asked John and Willie to explore options and seek recommendation for a new strategic direction for the business. Willie has decided to seek external advice from an industry expert consultant. He has requested a full report on current best practice internationally within the paint manufacturing industry, with a focus on sustainable management practices and recommendations for a new direction that will improve business efficiency and effectiveness into existing and new markets

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