Corporate Collapse: Case Study of Dick Smith Retail Store

Governance Case Study

Table of Contents
Executive Summary.........................................................................................................................3
Introduction......................................................................................................................................4
Corporate Collapse; Dick Smith Retail Store..................................................................................4
Reasons and responsible person for collapse of Dick Smith Retail Store...................................4
Legal, ethical and governance issue arising from collapse of Dick Smith Retail Store..............6
Impact of the corporate collapse for organizational stakeholders and the company...................8
The manner by which company director can be avoided this situation.......................................9
Conclusion.......................................................................................................................................9
Recommendations..........................................................................................................................10
References......................................................................................................................................11

EXECUTIVE SUMMARY
Corporate Collapse typically consists of the bankruptcy or the insolvency of significant business
enterprises. The present report contains a discussion about the corporate collapse of an
Australian company named Dick Smith. It was known to be one of the large electronic retailers
in Australia. The company has failed due to some internal and external elements. It is essential to
know the reason behind the collapse in order to find some strategies and planning by which
business can be revived again. In the given study, poor strategies, unprivileged leadership policy,
management system, wrongful done by the management and some others are the factors, by
which the company suffered from collapse. By considering the relevant facts of the corporate
collapse of Dick Smith Retail Store, it has been identified that the role of the directors, as well as
key managerial personnel, is very important for the performance of the company.

INTRODUCTION
The present report contains a discussion about the corporate collapse of an Australian company
named Dick Smith. The present study shows the real aspect regarding the closure of the company
by evaluating its financial conditions. This study evaluates the legal, ethical and governance
issues arises due to the corporate collapse of Dick Smith. Moreover, the report also evaluates the
impact of the collapse of Dick Smith on stakeholders.By considering the reasons for the collapse,
the recommendations also provided by which the situation of collapse could be avoided by the
company.
CORPORATE COLLAPSE: CASE STUDY OF DICK SMITH RETAIL
STORE
Reasons and responsible person for the collapse of Dick Smith Retail Store
The reasons behind the collapse of Dick Smith are given below –
Change in Market Scenario
Since the electronic market is highly competitive; it leads to a change in demand by consumers.
Dick Smith did not stimulate the demand by consumers and unable to cope up with the
competitive environment.
Reduction in market shares and sales
Revenue growth of the company is based on the growth of the store. Since the demand for
product reduced in the market, therefore the sales of the company reduced (Pearce, 2015).
Significant cost store network
The company has several store networks, which are significant in size, as compared with its
competitors. Therefore, the maintenance of the large store requires higher cost, with substantial
dependence on a fast-moving computer product market.
The very quick expansion plan