...Case Study : China Doll INTEGRATED CASE STUDY REPORT ON CASE STUDY NO 4: CHINA DOLLS Question 1 Based on the financial information given in Appendix A, what is HCF’s current financial position, how it is performing, perform ratio analysis to assess its current financial position and financial performance. (a) HCF’S Current Financial Position. (b) How HCF is performing. * Falling margins and profits * Revenue decreased by 7.7% (RM10mil) but COGS increased by 6.5% (RM4740mil) in 2008 * Operating profit decreased by 67% (RM9240mil) in 2008 * Increase in current liabilities * Trade payables increased by 92% (RM6654mil) * Overdraft increased by 86% (RM1415mil) PROFITABILITY | FORMULA | YEAR 2008 | YEAR 2007 | Return on Capital Employed (ROCE) | EBITNET ASSETS ×100 | 330054841 ×100=6% | 1259049437 ×100=25.47% | Profit Margin | EBITNET NET SALES×100 | 3300120000 ×100=2.75% | 12590130,000 ×100=9.68% | Return on Assets | NET PROFITTOTAL ASSETS×100 | 244272661 ×100=3.36% | 919161729 ×100=14.89% | Gross Profit Margin | GROSS PROFIT SALES×100 | 42750120000 ×100=35.63% | 57490130000 ×100=10.65% | Operating Profit Margin | OPERATING PROFIT SALES×100 | 4600 120000×100=3.83% | 13840 130000×100=10.65% | * Resulting in overall increase of current liabilities by 45% (RM5528mil) RATIO: PROFITABILITY, LIABILITY, ACTIVITY & LEVERAGE. RATIO: PROFITABILITY, LIABILITY, ACTIVITY & LEVERAGE. PROFITABILITY * ROCE To measure of the return that a business in achieving from...
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...CHINA DOLLS Overview Haute Couture Fashions Sdn Bhd need to adjust their business strategy, as China textile industry becoming a potential threat to it as its two major customers are now thinking of outsourcing to China for its lower operating cost. The management need to decide whether to move its operation to China or exit from contract manufacturing activity and stand on its own new created brand. It is recommended for Haute Couture Fashions Sdn Bhd to move their operations wholly by itself to China and halt their current local operations, to secure its existing customers, and attract new potential customer in the long run. Although it might seems as a big investment in the short term, but in the long term period, Haute Couture Fashions would enjoy the profit made by this big investment of today. Problems The management of Haute couture Fashions Sdn Bhd needs to make quick adjustment to their existing business strategy due to the emergence market of China in the textile industry. Many of the manufacturers from European and American market are changing their contract manufacturer to China due to its potential low operating cost. In the short term period, Haute Couture Fashions Sdn Bhd, HCF might lose its two major clients, which made up 44.2% of its sales annually. On the other hand, if no changes being implemented, in the long run, HCF might suffer even more, when all of its clients follow those steps, outsourcing to China. Potential alternative decision to be made by HCF...
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...4) Given Calveta’s communication and internal organization challenges, how important will training and development to be maintained in growth and culture? Internal Communication plays an important role and effective communication within the participant in the organization. Yet, a strong communication in the internal organization promotes a sense of unity among the employees in the organization. Moreover, an effective internal organization structure is the key enabler of employee engagements towards the succession of mission and vision of an organization. Though, in Calveta’s dining services towards senior living facilities (SLF) had performed well in their management structure over years embraced with Antonio’s ways. Recently, Calveta’s has faced with some difficulties in over ridding their communication and internal organization challenges faced by the management itself as their business in dining services expands. Frank worried about the rising diversity of employees and the new management couldn’t adopt the company’s core services value that probably couldn’t be sync. Accordingly, Frank also suggested that training and development for employee is needed to maintain the growth and culture in an organization. Yet, the training budget has maxed out in calveta’s. But , Calveta’s still need to provide management training to employees to enhance culture and growth in calveta’s management to be maintained. In addition, it is to be believed that an employee in new management...
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...DECISION CRITERIA If expand to china, HCF need to either operate their own factory or they can joint venture with Chinese manufacturer2. If they are going to stay in Malaysia, they need to shut down the factory in Chieng Mai which going to risk them lose the China’s influence. Jeffrey need to consider moving to China and can supply the clothes at lower prices. If they move to China, HCF will receive a reasonable resale value as its equipment was renewed from Butterworth and Penang factories.3. Substantial profit in selling the land as the factories located in fast developing area. He felt that HCF will lose its independence if they consider a joint venture. The continuous of the operations while waiting for the new factory to be ready. Higher costs since HCF do not have sufficient funds. Both factories have low resale value as they are located in rural areas and hard to sell them. No resale value as they only need to improve the current Malaysian factories. No resale value involve. RECOMMENDATIONS (ACTION AND IMPLEMENTATION PLANS) It is recommended and advisable to HCF management to move their operations to China wholly by itself and shut down its current operations due to the following reasons. 1) Even though it would take 18 months for the new factory being completed, but in the long run, HCF would become more profitable due to the lower labor cost and larger factory production capacity. 2) By choosing this alternative, HCF would not only secure its current clients, but...
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...INTEGRATED CASE STUDY REPORT ON CASE STUDY NO 4: CHINA DOLLS Question 1 Based on the financial information given in Appendix A, what is HCF’s current financial position, how it is performing, perform ratio analysis to assess its current financial position and financial performance. (a) HCF’S Current Financial Position. (b) How HCF is performing. * Falling margins and profits * Revenue decreased by 7.7% (RM10mil) but COGS increased by 6.5% (RM4740mil) in 2008 * Operating profit decreased by 67% (RM9240mil) in 2008 * Increase in current liabilities * Trade payables increased by 92% (RM6654mil) * Overdraft increased by 86% (RM1415mil) PROFITABILITY | FORMULA | YEAR 2008 | YEAR 2007 | Return on Capital Employed (ROCE) | EBITNET ASSETS ×100 | 330054841 ×100=6% | 1259049437 ×100=25.47% | Profit Margin | EBITNET NET SALES×100 | 3300120000 ×100=2.75% | 12590130,000 ×100=9.68% | Return on Assets | NET PROFITTOTAL ASSETS×100 | 244272661 ×100=3.36% | 919161729 ×100=14.89% | Gross Profit Margin | GROSS PROFIT SALES×100 | 42750120000 ×100=35.63% | 57490130000 ×100=10.65% | Operating Profit Margin | OPERATING PROFIT SALES×100 | 4600 120000×100=3.83% | 13840 130000×100=10.65% | * Resulting in overall increase of current liabilities by 45% (RM5528mil) RATIO: PROFITABILITY, LIABILITY, ACTIVITY & LEVERAGE. RATIO: PROFITABILITY, LIABILITY, ACTIVITY & LEVERAGE. PROFITABILITY * ROCE To measure of...
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...might like this doll. E-mailing these forms would be easiest; although, in person you can choose your candidates better. Another possibility would be to research the most popular dolls sold to American parents and compare the similarities and differences from those dolls to this particular doll. Market testing would probably be the most efficient and conclusive way to discover your segment’s needs. Market testing is important because as Hornor states “everyone thinks their idea or product is perfect, so you need to test it with real potential customers so they can either tell you it is wonderful or open your eyes to potential issues with your product.” The biggest issue Americans have reported about their feelings towards toys manufactured in China, and sold in the U.S., is that they are unsafe and dangerous for their kids. These issues have come up because many toy manufacturing companies have had serious public issues. Mattel, the largest toy manufacturer, had to recall over 19 million toys. About half of those toys were distributed in the United States, and all were manufactured in China. (Story and Barboza) These toys were recalled because of problems such as small amounts of lead, which can be extremely harmful to kids. “According to the US Consumer Product Safety Commission (CPSC, 2008), recalls have increased drastically in the 2000s and a vast majority of the recalled products were made in China. Not surprisingly, consumers were outraged at China” (Beamish and...
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...technology can be used to custom manufacture dolls. Shortly after September 11, 2001, Vicale Corporation, BBC’s parent company, purchased an e-commerce toy company. Vicale’s first action figure was made to honor the heroes who emerged from that event. Using RPT, he crafted a doll with the head of George W. Bush and the body of Arnold Schwarzenegger. Other figures followed. This case is about a design firm that used exploratory research to define a niche in the action-figure business. www.herobuilders.com >The Scenario Used with permission of Pamela S. Schindler ©2004. Emil Vicale, president of HeroBuilders.com Corporation, thinks entrepreneurial. His industrial design company, BBC Design Group, has been operating for more than 20 years. One cornerstone of his design business is an innovative technology called rapid prototyping (RPT). RPT allows a designer to go from 3-D computer model to 3-D plastic or wax prototype in a matter of hours rather than the days, weeks, or months that prototypes using subtraction technology (carving) from wood, metal, or clay might take. As part of a growth strategy implemented shortly after September 11, 2001, Vicale finalized the purchase of an e-commerce toy company, ToyBuilders.com. This was his first venture into the manufacture of toys, although his design firm had done developmental work for toy companies in the past. Vicale made his first doll to honor an admired hero of 9/11. “The Our Hero doll (resembling George Bush) turned out great,...
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...New Heritage Doll Company Capital Budgeting Analysis The New Heritage Doll Company is a company that makes dolls for children between the ages 3 – 12 years. The company has revenues of 245 million USD and an operating profit of 24 million USD. The company has three major divisions – The Retailing division, the Licensing division and the Production division. The head of the production division has to choose between two capital intensive projects that have been presented to her - the “Make My Doll Clothing Extension” (MMDCE henceforth) and the “Design Your Own Doll” (DYOD henceforth). This paper will try and analyze some of the issues that may need to be taken into account by the division head before she chooses a project for final approval. Issue 1: Product Line Growth Rate vs Industry Growth Rate The doll segment in the US is slated to grow at 3% in 2013 and lasting franchise value for branded lines of dolls is considered rare – most doll lines lose their popularity within a few years of launch. Given this reality, the underlying assumption of the two brand managers for the two projects is, in my opinion, quite optimistic. The MMDCE line is expected to grow at 8% while the DYOD line is expected to grow at 6% - which is much higher than the expected rate of growth in the dolls segment. The production head must, in my opinion, do due diligence and consider if the growth rates for these product lines can exceed the average industry growth rate by such a large extent. Issue 2: Possibility...
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...allocating overhead as a percentage of direct labor cost, the margins of 9% and 34% in the Geoffrey doll and the specialty branded doll #106 respectively, do not reflect the true cost of manufacturing. When using the ABC system, we see that a tremendous misallocation in “Receiving and Production Control” and in “Packaging and Shipping” occurred using the previous system. These skewed allocations of costs also distorted the margins as shown below. Comparison of Alternative Costing Approaches | | | | | | Unit Overhead Cost | | Geoffrey Doll | | Specialty #106 | Volume-based | | $11.19 | | $13.99 | Activity-based | | 7.22 | | 25.01 | Difference | | $3.97 | | $11.02 | Unit Margin | | | | | Volume-based | | 1.81 | | $12.26 | Activity-based | | 5.78 | | 1.24 | Difference | | $3.97 | | $11.02 | Return on Sales | | | | | Volume-based | | 8.62% | | 34.06% | Activity-based | | 27.51% | | 3.43% | Difference | | 18.89% | | 30.62% | If G.G. can reduce the number of shipments and increase the size of the production runs of the #106 doll, the margin will increase dramatically. It may be a good idea to instate minimum orders. In the Springfield plant, the ABC system is unnecessary because all costs are allocated to the production of a single product. Holiday Doll Production In regards to producing the holiday reindeer dolls, it seems that...
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...Short Cycle | Short Cycle process | Who | Audrey Hausner, G.G.’s controller, David Morehouse, G.G.’s manufacturing manager and Robert Parker, President G.G. Toys. | What | Increase the margins of the Geoffrey Doll. | Why | The decline in margins on the Geoffrey Doll has become intolerable. | When | ASAP. | | | Case Difficulty | Analytische | Conceptuele | Presentatie | Problem ? Yes | Theory? | Structured? Yes, 7 pages | Solution? No | | | | Long Cycle Define the problem The decline of the margin on the Geoffrey Doll has become intolerable. The margin has to stop decreasing and should go up. They need to consider drastically shifting their production towards specialty dolls. Importance / Urgency | Low | High | Low | | Increase the margin on the Geoffrey Doll. | High | | Stop the decrease of the margin on the Geoffrey Doll. | Analyse the case We analysed the information of exhibit 1, 2, 3 and 4. Alternatives * Reduce the manufacturing costs * Produce the Romaine Doll * ABC-method for the Geoffrey Doll * Do nothing Criteria * Costs * Profit * Implementation time Asses the alternatives Alternatives | Decision Criteria | | | | | | Qualitative | | Quantitative | | | | Implementation time | | Costs | Margin | | 1. | | | | | | 2. | | | | | | 3. | | | | | | Select the best alternative We think that Develop an implementation plan | Develop an...
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...Essay The Eyes That Follow Jon Torres Porcelain dolls. Staring at me with unblinking eyes, surrounding me, and I can’t get away. My older sister, standing there laughing at me, a horror movie about killer dolls playing in the background. Me, 5 years old and strapped down to a chair. I still have the fear of dolls that I experienced that day, although it is not quite as severe. My older sister was a firm believer in tough love, and she was always picking on my brothers and me. It isn’t until I sit here, 17 years later, that I realize that it wasn’t just a prank, but her way of trying to toughen me up. I remember that day as one of horror and hurt, but it wasn’t as bad as a 5 year old mind can make it out to be. I woke up expecting the normal life of a kid, playing with toys and watching Tom and Jerry as I waited for my mom to take over with As the World Turns. Little did I know that my older sister was home as well, “sick” with one of those 24 hour stomach bugs. She decided it would be the perfect opportunity to teach her passive-aggressive younger brother to be tough and not cry. Boy did that backfire. She called me into the living room, and the first thing I noticed was the spinning desk chair in the middle of the room. I didn’t see my sister, so I sat down and looked at the television, expecting to see some commercial about a new cleaner or a toy that I would want. Instead, there is an inflated face of a porcelain doll, a movie that had been paused. In the blink of an...
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...The Mansion Luna woke up in a large, coffin like box with a red velvet cushion under her and black wooden ceiling above her. She aggressively pushed up on the top of the coffin like thing. It easily came open and she saw a 17ft by 15ft room with black and white mid scale damask wallpaper as well as a metro silk hot pink area rug. The room was filled with an assortment of dolls, all of them had long and tousled pitch black hair, blood red eyes and black painted fingernails. They appeared to be about eighteen inches in height. The odd thing was that there was one doll that had something in her lap, the doll was to the left of the frame white hardboard door, which was located in the farthest right corner of the room. Luna started to move across...
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...2/28/2015 Dolls & Stuffed Animals, Barbie, Lalaloopsy, Monster High - Toys"R"Us Rewards"R"Us Email Sign Up Weekly Ad Info Center Choose My Store Find a Store Help Baby Registry Wish List Gift Cards Gift Finder My Account / Sign In SHOP BY Search for something fun! 0 Home | Dolls & Stuffed Animals Dolls & Stuffed Animals Narrow By: Category Dolls Doll Acce ssorie s Dollhouse s & Acce ssorie s Ce le brity & Fashion Dolls Ethnic Dolls Miniature Figure s & Play Se ts Prince ss & Fairy Dolls Horse & Pony Dolls Stuffe d Animals & Plush Toys Colle ctible Dolls Ele ctronic Pe ts Gender Boys Girls Featured Categories Age Birth-12 Months 12-24 Months 2 Ye ars 3 & 4 Ye ars 5-7 Ye ars 8-11 Ye ars More... Dolls My First Doll Ethnic Dolls Show All Doll Accessories Doll Furniture Doll Clothes Show All Brand 20th Ce ntury Fox Acce ssory Innov ations Adora Ale x Toys Animal Adv e nture Animal Alle y More... Dollhouses & Accessories Dollhouses Wooden Dollhouses Show All Character/Theme 1D Adv e nture Time Alice in Wonde rland http://www.toysrus.com/category/index.jsp?categoryId=2255963 1/4 2/28/2015 Alv in & the Chipmunks Angry Birds Angry Birds Star Wars More... Dolls & Stuffed Animals, Barbie, Lalaloopsy, Monster High - Toys"R"Us Price unde r $10 $10 - $20 $20 - $30 $30 - $40 $40 - $50 $50 - $75 More... Celebrity & Fashion Dolls Celebrity Dolls Doll Play Sets Show All Ethnic Dolls Miniature...
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...G.G. Toys: Case study #2 G.G. Toys was a toy manufacturer facing problems with productivity and profitability. The company found a profitable product in their Geoffrey doll and Specialty branded doll #106. Retailers could customize to the specifications and buying habits of their customer base. On average, the Geoffrey Doll cost $19.19 to produce, and the #106 doll $23.74. To access in a study of their overhead cost for both of their plants, research showed that: 1. A setup was performed in the Chicago facility each time a modification to the dolls was made. Additionally, each time a specialty-branded doll was produced, a separate setup was required to process the raw materials to the required specifications. 2. Workers in the Chicago facility often operated several machines simultaneously once they were set up. Thus, machine-related expenses might relate more to the machine hours of a product than to its production-run labor hours. Because each retailer required slight alterations to the Geoffrey doll's overall appearance, a new setup and production run was required for each design change. Retailers were found to be conservative in their ordering patterns, ordering fewer units more frequently. Thus increasing the number of setups required, causing increased labor and material cost. The research done by the external group did show an area of opportunity. Because setup is time consuming, labor intensive, and costly, it would be within reason (at least with...
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...Risk considerations A major concern to be addressed in the New Heritage Doll case study is the risk, the two projects being evaluated having very different risk profiles. The strategy typically employed by New Heritage Company when assessing a projects’ risk is based on customer acceptance, technological uncertainty and high fixed costs. This note suggests an alternate strategy, trying to quantify the strategic growth potential for the New Heritage Doll Company of each project; therefore an integrated risk assessment approach based on both uncertainty and strategic and product positioning advantage delivered by each project will be used for project valuation. The “Match My Doll Clothing Line Expansion” project delivers an increment in the existing market segment by expanding the current warm weather clothing and accessories line, capitalizing on the popularity of the current offering and its premium pricing, having a similar risk profile as the current division business. The “Design Your Own Doll” project would deliver a “one-of-a-kind” doll ownership experience, and is expected to command the premium price associated with a custom doll. But more important, beside the new possibilities opened by the online customization of the dolls for expanding the current New Heritage market segment, the impact of the actual experience delivered by the girl interaction with the software while designing the doll should be further evaluated. This is a gaming-like experience that the project...
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