DDC: Growth and Turnaround Strategy

This assignment presents a case study of The Designer Classic Carpet (DDC), a company facing challenges such as low brand recognition and financial constraints. It outlines various initiatives proposed to address these issues, including acquiring Elite Carpet, establishing an importing company, and investing further in WSM (Wool Sourcing & Manufacturing). The student is tasked with analyzing the pros and cons of each initiative and recommending a course of action for Jim Dunlop, the CEO, focusing on strategic acquisitions and management structure.

Running head: MANAGEMENT CASE STUDY 1
Management Decision Making
Name
Institution

MANAGEMENT CASE STUDY 2
The Turnaround and Growth of DDC
The Designer Classic Carpet has medium and high quality wool carpets which meet
special customer needs. In terms of production capability, it works with dealers and also
directly with customers. It has the capability to deliver custom sample within ten to fourteen
days, which is regarded as faster rate. The manufacturing plant is strategically located to
potential buyers.
One of the challenges is that it does not have string brand recognition. There was also
high turnover rate. Another challenge is financial constraints due to the need to finance the
various initiatives.
Pros and Cons of the Initiatives
Elite Carpet Acquisition
Pros
Being the only manufacturer of woven wool carpets, acquisition of Elite Carpet will reduce
competition. Its product is less labour intensive hence will likely reduce operation costs.
Cons
It may lead to loss of control over the business processes
It may lead to issues associated with quality and turnaround time.
It may also result in shortcomings in performance
Establishment of Importing Company
Pros
It would help DCC to lower the production cost, hence lowring the price of the end
products. The intiative will reduce cashflow and optimize resource utilization. This will lead
to an increase in return on investment.
Cons

MANAGEMENT CASE STUDY 3
The strategy is likely to cause the company a lot of money in setting up the importing
company. It will also require employ,ent of more employees.
Further Investment in WSM
Pros
The company will still be able to maintain its quality of wool. It will also result in
synergy. Investment in WSM will also eliminate delivery challenges. DCC will acquire more
raw materials such as raw fleece. It will also increase the company’s share price.
Cons
It may lead to compromise of quality
It can lead to financial problems unless well planned
Over expansion may lead to loss of control
Recommendation to Jim Dunlop
Jim Dunlop should acquire adjacencies since they are consistent with brand as stated
by Nolop (2007). Jim Dunlop should ensure that the management of the company is well-
structured to ensure success of the business and gain a competitive advantage. To ensure that
the acquisition, Jim Dunlop should assess first and make sure they fill a critical gap in the
market as stated by Frederiksen (2016)

MANAGEMENT CASE STUDY 4
References
Frederiksen, L. (2016). Mergers and Acquisitions as Part of Your Growth Strategy. Retrieved
from https://hingemarketing.com/blog/story/mergers-and-acquisitions-as-part-of-
your-growth-strategy
Nolop, B. (2007). Rules to Acquire By. Harvard Business Review