Economics and Dahlia Furniture Private Essay

On sumptuous 1984, Mr. Chua Boon Kang and Mr. Leong Sim Lam bought over whoreson Lims forty six pct (46%) stake at dahlia article of furniture private Limited. Although co-owners at one time, Mr. Chua and Mr. Leong keep up found Mr. Lims management of the conjunction to be unsatisfactory. Some reorganization took smudge as most of the work workers who were doing subcontracting orders wholly for Dahlia had resigned due to poor party performance in 1982. Dahlia in any case sold off s correctty cardinal thousand dollars ($75,000) worth of machinery used for majority producing furniture which was previously purchased by a former Managing Director, who has since left the companionship. Now at the helm, both(prenominal) are uncertain well-nigh the long term direction of the company. Meanwhile, they are both concerned over maintaining sales maturation in a extremely belligerent persistence.Dahlia furniture do its entrance into the furniture industry in 1972 as subcont ractors to two large furniture concerns, Ching Lin and Diethelm. It supplied mainly wall units and kitchen cabinets while bedrooms fates and dine sets were subcontracted out or obtained from local suppliers. disdain went well and the company watchd to dissever 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 periodical basis to furniture makers who were also subcontractors to Dahlia. The company also acquired two or more(prenominal)(prenominal) showrooms in the Bukid Timah and Upper Thomson area in 1978 and 1982, respectively.I. TIME CONTEXTThe Dahlia Furniture Private Limited Case (Case) was unquestionable in 1985 by Mr. Chng Hak Kee and Ms. Jeannie Teoh from the home(a) University of Singapore. (Reference Book)The case, as described is dated in the 1980s in which Singapores thrift was dependent on impertinent markets and sup pliers pushed. In the 1980s, Singapore was a relax port with only a few revenue tariffs and a small set of protective tariffs. It had no foreign re-sentencing controls or domestic price controls. in that respect were no controls on private opening or investment, nor any limitations on kale remittance or repatriation of capital. Foreign corporations were welcome, foreign investment was solicited, and fully 70 pct of the investment in manufacturing was foreign. (mongabay.com)This shows that there is sooner 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 aforesaid(prenominal) share 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 extravagantly stinting growth, largely outperforming the world economy. Its GDP growth rate ne ver fell on a lower floor 5 percent and rose as high as 15 percent. At the same time, Singapore managed to maintain an pretentiousness rate below world averages. However, the 1985 internationalist recession severely affected the economy as Singapore is dependent on foreign investments. However, due to better insurance making, the country, on the same decade experient 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 nonplus to decide on the direction of the company where they desire to be. Since the case does non directly egress a problem, it is presumed that the students are to make decisions base on the interpretation of the case.III. MAJOR insurance STATEMENTThe furniture crinkle industry vision, the philosophy is built upon providing tailor-made business furniture solutions that sinks our clients unmatched needs and expectations whi lst remaining cost competitive.IV. stream BUSINESS POLICYV. STATEMENT OF THE lineVI. STATEMENT OF OBJECTIVEa. Long edgei. To develop strategies that will enhance and shew sales figures ii. To be highly competitive aginst both foreign and domestic competitors b. go around Termiii. To improve companys agency in the marketiv. To exceed sales figure from the previous twelvemonthVII. SWOT ANALYSISSTRENGTHS WEAKNESSES1. Target market is well defined 2. Multiple supplying/ inscription sources 3. Stable Management (as of 1984) 4. graduate(prenominal) eccentric Image 5. Highly paying Branch (Orchard Area) 1. Limited Market 2. faint moving merchandise inventory 3. primary winding Decision Makers are indirect Competitors 4. deplorable Profit Branches OPPURTUNITIES THREATS1. Re-exportation 2. New design trends 3. improve profitss from weaker branches 4. Open market for imported furniture 1. Conflict on interests amidst the decision makers and the company 2. Loss of fitted mana gers 3. Gradual changes in economic policies of the administration 4. Loss of clients to competitorsVIII. ALTERNATIVE COURSES OF ACTION1. upshot all products and continue its high quality and fairly expensive construe with pith and upper income familys clientele. 2. splay its production unit and contend with competitors by dint of glum of prices to occur a bigger market, the aggregated. 3. To enounce a proportionate inventory acquisition with whatever products imported and some manufactured, to strike away competition and at the same time, maintain its yield epitome, also to reach all brackets of prospective clientele.IX. ANALYSIS OF ALTERNATIVESX. end STATEMENTXI. IMPLEMENTATION PROGRAMSXII. PROPOSED BUSINESS POLICIESXIII. vigilance LESSONS LEARNEDDahlia Furniture Private LimitedI. Problem What way of acquiring inventories should Dahlia employ to maximize profit and improve the companys position?II. ersatzs 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 competition and at the same time, maintain its present image, also to reach all brackets of prospective clientele.III. Advantages and Disadvantages* Advantages for option A* Dahlia would be bleak from hiring more labor.* leave behind maintain its present image for quality and pricing.* No command hit costs.* Smaller units of products are needed to be sold because of its price* Problems about weft their showrooms are rapidly solved.Disadvantages for Alternative A* Would turn out costly if non sold two months or more.* Dahlia would be compulsive away by competitors because of erratic pricing.* It could not cater to the mass market.* It will be pinpointed by regime for u sing foreign labor and talent affect its credibility.* Advantages for Alternative B* forget not incur large cost, even inventory remain idle for kinda some time.* The company can at a time afford to cater the mass market.* stack now drive the competition.* Will not violate governments insurance policy on foreign labor.Disadvantages for Alternative B* Will incur large overhead cost.* Companys current image might be at stake.* Has to take aim more labor that will tramp 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