On August 1984, Mr. Chua Boon Kang and Mr. Leong Sim Lam bought over Peter Lim’s forty six percent (46%) stake at Dahlia Furniture Private Limited. Although co-owners at one time, Mr. Chua and Mr. Leong have found Mr. Lim’s management of the company to be unsatisfactory. Some reorganization took place as most of the production workers who were doing subcontracting orders solely for Dahlia had resigned due to poor company performance in 1982. Dahlia also sold 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 are uncertain about the long term direction of the company. Meanwhile, they are both concerned over maintaining sales growth in a highly 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 wall 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 CONTEXT
The Dahlia Furniture Private Limited Case (Case) was developed in 1985 by Mr. Ch’ng Hak Kee and Ms. Jeannie Teoh from the National University of Singapore. (Reference: Book)
The case, as described is dated in the 1980’s in which Singapore’s 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 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 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 decades 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)
As 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 not directly supply a problem, it is presumed that the students are to make decisions based on the interpretation of the case.
III. MAJOR POLICY STATEMENT
The furniture business industry vision, the philosophy is built upon providing tailor-made business furniture solutions that exceeds our client’s unique needs and expectations whilst remaining cost competitive.
IV. CURRENT BUSINESS POLICY
V. STATEMENT OF THE PROBLEM
VI. STATEMENT OF OBJECTIVE
a. Long Term...