Economics and Dahlia Furniture Private Essay

On August 1984, Mr. Chua Boon Kang and Mr. Leong Sim Lam bought over Peter Lims forty six percent (46%) stake at Dahlia Furniture Private Limited. Although co-owners at one time, Mr. Chua and Mr. Leong have prime Mr. Lims management of the company to be unsatisfactory. Some reorganization took place as most of the intersection workers who were doing subcontracting orders solely for Dahlia had resigned due to poor company performance in 1982. Dahlia also sell off seventy five thousand dollars ($75,000) worth of machinery used for mass producing furniture which was previously purchased by a former Managing Director, who has since left the company. Now at the helm, both be uncertain about the huge term direction of the company. Meanwhile, they atomic number 18 both concerned over honoring sales growth in a spiritedly competitive industry.Dahlia Furniture made its entrance into the furniture industry in 1972 as subcontractors to two large furniture concerns, Ching Lin and Diethelm . It supplied mainly w all in all units and kitchen cabinets while bedrooms sets and dining sets were subcontracted out or obtained from local suppliers. Business 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 cost of $400,000 and $300,000, respectively. The factory At Ang Mo Kio was rented out on a monthly basis to furniture makers who were also subcontractors to Dahlia. The company also acquired two or more showrooms in the Bukid Timah and Upper Thomson area in 1978 and 1982, respectively.I. TIME CONTEXTThe Dahlia Furniture Private Limited causa (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 external markets and suppliers pushed. In the 1980s, Singapore was a free port with only a few revenue tariffs and a sma ll set of preventive tariffs. It had no irrelevant exchange controls or domestic price controls. There were no controls on offstage enterprise or enthronisation, nor any limitations on profit 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 quite a contrast with regards to foreign policies as compared to the Philippines which has more 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 ten dollar bills of its independence (1963, Britain and 1965 from Malaysia), Singapore enjoyed continuous high 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 inflation rate below world averages. However, the 1985 international recession severely affected 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 all important(predicate) 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 not immediately supply a problem, it is presumed that the students are to make decisions based on the interpretation of the case.III. MAJOR POLICY disceptationThe furniture business 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. education OF THE PROBLEMVI. mastery OF OBJECTIVEa. Long Termi. To dev elop strategies that volition enhance and raise sales figures ii. To be extremely competitive aginst both foreign and domestic competitors b. Short Termiii. To improve companys survey in the marketiv. To exceed sales figure from the previous yearVII. SWOT ANALYSISSTRENGTHS WEAKNESSES1. bearing Market is well defined 2. Multiple supply/ lineage sources 3. Stable Management (as of 1984) 4. High role Image 5. Highly profitable Branch (Orchard Area) 1. Limited Market 2. Slow moving imported inventory 3. Primary Decision Makers are indirect Competitors 4. Low Profit Branches OPPURTUNITIES THREATS1. Re-exportation 2. New design trends 3. Improve cyberspace from weaker branches 4. Open market for imported furniture 1. Conflict on interests between the decision makers and the company 2. dismission of competent managers 3. Gradual changes in economic policies of the government 4. Loss of clients to competitorsVIII. ALTERNATIVE COURSES OF ACTION1. instant all products and continue its high quality and fairly expensive image with middle and upper income familys clientele. 2. combust its production unit and contend with competitors through lowering of prices to reach a larger market, the mass. 3. To contrive a proportionate inventory acquisition with rough products imported and some manufactured, to drive a flair rival and at the same time, maintain its present 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 maximize 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 production 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(p) 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.* exit 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 turn out costly if not sold two months or more.* Dahlia would be driven away by competitors because of erratic pricing.* It could not cater to the mass market.* It will be pinpointed by government for using foreign labor and might affect its credibility.* Advantages for Alternative B* volition 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.* allow 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 neutralize all costs.* Will have a larger continues