DMC Review Papers
DIGIMAXCON CASE
As Mr. Grant, CEO of DMC has realized, the current growth strategy of the company is insufficient. DMC needs to identify their primary business problems and prepare a new or revised strategy with alternative tactics to address it.
Even though DMC had grown to become a multi-billion dollar company and consistently ranked in the top five in their industry, DMC’s returns between 2008 and 2012 showed great profits and loss swings unpredictably. These ranged from a net income loss of $1.5 billion in 2008, $1.9 billion in 2009, to a profit of $1.9 billion in 2010, $1.7 billion in 2011 then a loss of 1 billion in net income in 2012, the most recent year. (Table 1) Despite of the up-side-down net income and over $3 billion in long-term debt, DMC was able to make financial arrangements for a line of credit of from $500 million to nearly $2 billion to finance potential acquisitions of major competitors whose financial situations made them available.
DMC’s top management team is well aware that a major change in strategy causes other changes. This also causes each manager concerned how his/her own area will change, even while they all know they have to help determine a direction that is the best overall choice for the company. They are well aware that the current growth strategy is insufficient. Top management team also need to consider whether or not a chosen target segment is profitable enough to pursue, and how these changes might influence manufacturing, supply chain, and personnel. Depending upon future direction, there will likely be an impact on information system as well. While IT is a progressive management team who is always willing to implement technical solutions to expedite product development and sales, their budget has been constrained along with all departments over the course of recent recession and the variability of returns to the company. Finance and accounting remain concerned about cash flow demands and financial activity for
As Mr. Grant, CEO of DMC has realized, the current growth strategy of the company is insufficient. DMC needs to identify their primary business problems and prepare a new or revised strategy with alternative tactics to address it.
Even though DMC had grown to become a multi-billion dollar company and consistently ranked in the top five in their industry, DMC’s returns between 2008 and 2012 showed great profits and loss swings unpredictably. These ranged from a net income loss of $1.5 billion in 2008, $1.9 billion in 2009, to a profit of $1.9 billion in 2010, $1.7 billion in 2011 then a loss of 1 billion in net income in 2012, the most recent year. (Table 1) Despite of the up-side-down net income and over $3 billion in long-term debt, DMC was able to make financial arrangements for a line of credit of from $500 million to nearly $2 billion to finance potential acquisitions of major competitors whose financial situations made them available.
DMC’s top management team is well aware that a major change in strategy causes other changes. This also causes each manager concerned how his/her own area will change, even while they all know they have to help determine a direction that is the best overall choice for the company. They are well aware that the current growth strategy is insufficient. Top management team also need to consider whether or not a chosen target segment is profitable enough to pursue, and how these changes might influence manufacturing, supply chain, and personnel. Depending upon future direction, there will likely be an impact on information system as well. While IT is a progressive management team who is always willing to implement technical solutions to expedite product development and sales, their budget has been constrained along with all departments over the course of recent recession and the variability of returns to the company. Finance and accounting remain concerned about cash flow demands and financial activity for