1. Success in a commodity industry is usually achieved by controlling costs (internal operation).

What are the major challenges facing industries that choose marketing as their option (external environment)? In order to answer this question and to understand and predict changes, opportunities, and threats we have to environmentally scan and get the answers for the following questions:

Who are the current competitors? Are there few or many entry barriers to their industry? What substitutes exist for their product? Is the company is too dependent on powerful suppliers? Is the company is too dependent on powerful customers?

Art and Butch have a strong competitor sawmills that are attempting the same product mix and marketing strategy as the Van delays, which have studied the situation closely. The oversupply and commodity factors combine to drive prices down, sometimes to levels lower than the cost or raw materials (logs) and manufacturing (sawmill). Art and Butchs cozy and profitable world is diminishing as cardboard boxes and plastic containers substitutes for and sometimes even replace the demand for wooden boxes. Cardboard containers are cheaper, and plastic containers are reusable even though they cost more. Wooden fish boxes may only be used once due to health and sanitation factors. The fish-box business will essentially become extinct within a few years. In the mean time, demand for boxes will steadily decline to the point of jeopardizing profitability. The markets for other wooden boxes and containers are low volume or insignificant in terms of being able to sustain profitability and make up the difference. From the above we conclude that there are many competitors in the market, the substitute exists with better quality, suppliers are many and customers are few. With the addition to that the there is no growth in the industry which all will make the industry unattractive. All of these challenges that Art and Butch faces should make them choose the marketing as their success option. 2. Given the companys existing raw materials and manufacturing capabilities, what new product lines might the principals consider? They could consider home and office furniture.

3. What steps must be taken by management over time to effect a smooth transition of oerations with respect to the