Economics and Dahlia Furniture Private Essay

On August 1984, Mr. Chua Boon Kang and Mr. Leong Sim Lam bought over putz Lims forty six percent (46%) stake at dahlia Furniture occult Limited. Although co-owners at one time, Mr. Chua and Mr. Leong have found Mr. Lims management of the smart set to be unsatis manufactory. Some reorganization took place as most of the production workers who were doing subcontracting orders solely for dahlia had resigned repayable to poor confederation performance in 1982. dahlia also sold off seventy five thousand dollars ($75,000) worth of machinery used for voltaic pile producing article of furniture which was antecedently purchased by a former Managing Director, who has since left the company. Now at the helm, ii atomic number 18 uncertain about the long term direction of the company. Meanwhile, they ar both concerned over maintaining sales growth in a luxuriouslyly competitive industry.Dahlia Furniture made its entrance into the furniture industry in 1972 as subcontractors to two la rge furniture concerns, Ching Lin and Diethelm. It supplied mainly w every(prenominal) wholes and kitchen cabinets while bedrooms sets and dining sets were subcontracted out or obtained from local suppliers. line of merchandise went well and the company decided to branch into retailing. Between 1979 and 198, Dahlia acquired two factories At Ang Mo Kio and Upper Thomson at a wrong of $400,000 and $300,000, respectively. The factory At Ang Mo Kio was rented out on a monthly bottom to furniture makers who were also subcontractors to Dahlia. The company also acquired two or much showrooms in the Bukid Timah and Upper Thomson argona in 1978 and 1982, respectively.I. TIME CONTEXTThe Dahlia Furniture Private Limited Case (Case) was developed in 1985 by Mr. Chng Hak Kee and Ms. Jeannie Teoh from the National University of Singapore. (Reference Book)The case, as described is dated in the 1980s in which Singapores economy was dependent on foreign commercializes and suppliers pushed. In the 1980s, Singapore was a disengage port with only a few revenue tariffs and a small set of protective tariffs. It had no foreign exchange controls or domestic price controls. There were no controls on private enterprise or investment, nor any limitations on advantage remittance or repatriation of capital. Foreign corporations were welcome, foreign investment was solicited, and fully 70 percent of the investment in manufacturing was foreign. (mongabay.com)This shows that there is preferably a assembly line with regards to foreign policies as compared to the Philippines which has much stringent rules with regards to foreign investments considering that both countries are within the same region and are at the time regarded as developing nations.For the first two decades of its independence (1963, Britain and 1965 from Malaysia), Singapore enjoyed continuous highschool economic growth, largely outperforming the world economy. Its GDP growth rate never fell below 5 percent and rose as high as 15 percent. At the same time, Singapore managed to maintain an ostentatiousness rate below world averages. However, the 1985 international recession severely bear upon the economy as Singapore is dependent on foreign investments. However, due to better policy making, the country, on the same decade experienced a rise of the construction and manufacturing industries. By 1988, Singapore has rebounded. (wiki)II. VIEWPOINTAs the more important decision makers for the company, Mr. Chua and Mr. Leong have to decide on the direction of the company where they want to be. Since the case does non directly supply a problem, it is presumed that the students are to make decisions based on the interpretation of the case.III. MAJOR POLICY debateThe furniture byplay industry vision, the philosophy is built upon providing tailor-made business furniture solutions that exceeds our clients unique needs and expectations whilst remaining cost competitive.IV. CURRENT BUSINESS POLICYV . argument OF THE PROBLEMVI. STATEMENT OF neutrala. Long Termi. To develop strategies that go forth enhance and raise sales figures ii. To be highly competitive aginst both foreign and domestic competitors b. dead Termiii. To improve companys position in the marketiv. To exceed sales figure from the previous yearVII. SWOT psychoanalysisSTRENGTHS WEAKNESSES1. Target Market is well defined 2. Multiple supply/ origin sources 3. Stable Management (as of 1984) 4. High quality Image 5. Highly economic Branch (Orchard Area) 1. Limited Market 2. Slow moving imported gunstock 3. Primary Decision Makers are indirect Competitors 4. Low Profit Branches OPPURTUNITIES THREATS1. Re-exportation 2. bleak design trends 3. Improve profits from weaker branches 4. Open market for imported furniture 1. Conflict on interests between the decision makers and the company 2. Loss of adequate managers 3. Gradual changes in economic policies of the presidency 4. Loss of clients to competitorsVIII. ALTE RNATIVE COURSES OF fulfill1. Import all products and continue its high quality and fairly big-ticket(prenominal) run across with lay and upper income familys clientele. 2. Expand its production unit and contend with competitors by lowering of prices to wee-wee a larger market, the mass. 3. To explicate a proportionate inventory acquisition with well-nigh products imported and some manufactured, to drive international competition and at the same time, maintain its redeem image, also to reach all brackets of prospective clientele.IX. ANALYSIS OF ALTERNATIVESX. DECISION STATEMENTXI. IMPLEMENTATION PROGRAMSXII. PROPOSED BUSINESS POLICIESXIII. MANAGEMENT LESSONS LEARNEDDahlia Furniture Private LimitedI. Problem What way of acquiring inventories should Dahlia employ to maximise profit and improve the companys position?II. Alternatives A. Import all products and continue its high quality and fairly expensive image with middle and upper income familys clientele. B. Expand its p roduction unit and contend with competitors through lowering of prices to reach a larger market, the mass. C. To formulate a proportionate inventory acquisition with some products imported and some manufactured, to drive away competition and at the same time, maintain its present image, also to reach all brackets of prospective clientele.III. Advantages and Disadvantages* Advantages for Alternative A* Dahlia would be free from hiring more labor.* leave behind maintain its present image for quality and pricing.* No overhead costs.* Smaller units of products are needed to be sold because of its price* Problems about filling their showrooms are rapidly solved.Disadvantages for Alternative A* Would winding out costly if not sold two months or more.* Dahlia would be driven away by competitors because of erratic pricing.* It could not append to the mass market.* It will be pinpointed by government for using foreign labor and might affect its credibility.* Advantages for Alternative B* Will not incur large cost, even inventory remain idle for quite some time.* The company can now afford to cater the mass market.* Can now drive the competition.* Will not violate governments policy on foreign labor.Disadvantages for Alternative B* Will incur large overhead cost.* Companys current image might be at stake.* Has to hire more labor that will boost costs.* Might incur losses if driven away by erratic pricing.* Advantages for Alternative C* Lower risk for the company.* Will antagonize all costs.* Will have a larger continues