Beauregard Textile Company

Introduction:
• In September 1990, Joel Calloway and Clarence Beal, met to prepare recommendations
for fourth-quarter fabric prices
• Beauregard was one of the largest firms in its segment of the textile industry
• It had an annual sales of about $82 million
• Company’s sales person were paid straight salary
• Product: Triaxx 30, blend of nylon, polypropylene, and rayon used for special outdoor
applications

Situation:
• Due to the increase in the costs, It had raised price of Triaxx from $3 to $4 to increase
profit margins
• Ensure that availability of funds for the plant modernization and expansion program by
strengthening the working capital
• Calhoun & Pritchard Inc., another supplier, had priced its product at $ which resulted in
a loss of market share by Beauregard.
• Market share was stable for T-30 for three years
• Customer were price sensitive
• Cost of Triaxx was comparable to that of T-30
• Calhoun & Pritchard Inc., was in a tight financial situation

Conclusion:
If BTC is at $3, it is quite likely that C&P will be at $3 as an increase to $4 reduces both market
share and profitability. This is due to the local presence of BTC, as described in the case study. If
BTC rises to $4, C&P tries to price at $4 to reduce the loss. If C&P gives away the profit and
Market Share, it must be at $3 by taking a loss. Regardless, BTC is profitable. So, it is preferable
for BTC to raise the price.

Submitted by:

Akula Padma Priya

PGP12101, Sec-B.