Jones Dairy Ltd (Jones) operates a ‘doorstep’ fresh milk delivery service. Two brothers carry on the business that they inherited from their father in the early 1960s. They are the business’s only directors. The business operates from a yard on the outskirts of Trepont, a substantial town in mid-Wales.

Jones expanded steadily from when the brothers took over until the early 1980s, by which time it employed 25 full-time rounds staff. This was achieved because of four factors: (i) some expansion of the permanent population of Trepont, (ii) expanding Jones’s geographical range to the villages surrounding the town, (iii) an expanding tourist trade in the area and (iv) through a positive attitude to ‘marketing’.

As an example of the marketing effort, when new residents move into the area, the member of the rounds staff concerned reports this back. One of the directors immediately visits the potential customer with an introductory gift, usually a bottle of milk, a bottle of wine and a bunch of flowers, and attempts to obtain a regular milk order. Similar methods are used to persuade existing residents to place orders for delivered milk.

By the mid-1980s Jones had a monopoly of doorstep delivery in the Trepont area. A combination of losing market share to Jones and the town’s relative remoteness had discouraged the national doorstep suppliers. The little, locally-based competition there once was had gone out of business.

Supplies of milk come from a bottling plant, owned by one of the national dairy businesses, which is located 50 miles from Trepont. The bottlers deliver nightly, except Saturday nights, to Jones’s depot. Jones delivers daily, except on Sundays.

Profits, after adjusting for inflation, have fallen since the early 1980s. Sales volumes have fallen by about a third, compared with a decline of about 50 per cent for doorstep deliveries nationally over the same period. New customers are increasingly difficult to find, despite a continuing policy of encouraging them. Many existing customers tend to have less milk delivered. A sufficient profit has been made to enable the directors to enjoy a reasonable income compared with their needs, but only by raising prices. Currently Jones charges 40p for a standard pint, delivered.

This is fairly typical of doorstep delivery charges around the UK. The Trepont supermarket, which is located in the centre of town, charges 26p a pint and other local stores charge between 35p and 40p.

Currently Jones employs 15 full-time rounds staff, a van maintenance mechanic, a secretary/bookkeeper and the two directors. Jones is regarded locally as a good employer. Regular employment opportunities in the area are generally few. Rounds staff are expected to, and generally do, give customers a friendly, cheerful and helpful service.

The two brothers continue to be the only shareholders and directors and comprise the only level of management. One of the directors devotes most of his time to dealing with the supplier and with issues connected with details of the rounds. The other director looks after administrative matters, such as the accounts and personnel issues. Both directors undertake rounds to cover for sickness and holidays.

Required:

As far as the information given in the question will allow, undertake an analysis of the strengths, weaknesses, opportunities and threats (SWOT analysis) of the business.

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