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Case Study - Dansk Designs Ltd

Summary:
Dansk is successful and continuing to grow rapidly. If they are to continue this success, they must add a new product line, appealing to a broader market segment. Distributions through wholesalers will be necessary as will new suppliers or owned factories. Designers should be given a share of the ownership and lines of authority tightened.

Diagnosis:
The strategy of Dansk appears to be to maintain a growth in earnings from 15 to 20%. It is assumed that to maintain this level of growth a wide range of new products, to be marketed under the title, "Dansk Gourmet Designs Ltd.", will be needed. Ted Nierenberg, the owner of Dansk, has expressed a desire to be out of the business by 1973 (in three years). Also, Ted has expressed his belief that Dansk will be acquired or will go public in the future. There are problems with the expressed strategy in that the perceived market opportunity may not be well suited to the Dansk organization, and Dansk may not have the capability to carry out this strategy. There are indications that the market for existing Dansk products has not been exploited, and that suppliers are more scarce than customers. The new products to be developed are in a different market segment, with different customers and different competitors. The new lower-priced, mass-produced products may not fit the present Dansk image, and certainly will not fit the existing marketing and distribution methods. There are indications of a lack of leadership. The present methods of distributing stocks and of assigning teams (Burt and Jens, for example) are not well suited to the individuals involved. Also, the assumption that a company will have to get outside capital is suspect, I would suggest trying to distribute through wholesalers because a 500 retail distribution system will be too restrictive. This would enable the salesman to concentrate solely on the high-priced products. I would also suggest the continuation of heavy advertising expenditures through "Bride" magazine or "Woman's Day" etc. In substance, Dansk has to be prepared for a different marketing strategy because they are selling a slightly different product to a different range of customers.

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