ineffective handling of a managerial situation

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C. R. PLASTICS 0 -0 Professors David Wood and Mary Gillett wrote this case solely to provide material for class discussion. The authors do not intend to 0 illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. cNi This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the ti permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G ON1; (t) 519.661.3208; (e); 0 Copyright © 2011, Richard Ivey School of Business Foundation Version: 2018-09-11 2 E g °— Jamie Bailey, the owner and president of C. R. Plastics, had successfully grown his business every year r (7) since 1994, when he had begun producing his innovative line of recycled plastic outdoor furniture in his 2 :E home town of Stratford, Ontario. However, each year presented a new challenge as rapid growth had 0 .2) constrained his financing, and the summer of 2010 was no different. Desperate for a new source of cash, .8 0 8 Bailey had auditioned to be on Dragon’s Den, a new network television show, where entrepreneurs could .0 pitch their business to a group of five successful venture capitalists. With only one week left before .0 E cow Bailey was to make his final pitch, he had a difficult decision to make: how much money would he need to keep up with growing demand? g > (i) • u) a w INDUSTRY (i) 8= LL >_ 0 In the United States, the furniture industry was in similar transition, as domestic employment had been down in 10 of the last 11 years.’ This trend was all the more evident in the plastic furniture segment, 2- which now imported more than double what it exported.2 Manufacturing outdoor plastic furniture did not 0 require a great deal of engineering or capital. In many respects, this industry was ideally suited for off-shore (1) production. However, some domestic furniture manufacturers were able to survive and even thrive by offering rapid response to requests for custom-made and highly fashionable products. The outdoor furniture industry had the added complexity of being highly seasonal. However, if a new product showed .c promise in the North American market, several low-cost competitors would be certain to introduce a z 0 similar product before the start of the next season. Despite these challenges, several companies in both the United States and Canada were offering high-quality recycled plastic outdoor furniture. 8 u_
The outdoor furniture industry was highly fragmented and very competitive. The majority of the furniture was either being produced in the United States or being imported from low-cost overseas countries, such as China. Canada had traditionally been a net exporter of furniture, but as a result of the recent increase in the valuation of the Canadian dollar and new low-cost overseas entrants, Canada was now a net importer.
I Furniture Manufacturing – Quarterly Update, 4/4/2011, First Research Industry Profiles, accessed July 6, 2011, from ABI/INFORM Trade & Industry. (Document ID: 2311004651). 2 Industry Canada, “Trade Data Online,”, accessed on July 5, 2011.

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