Baby Face's Cry Baby Doll - Due Diligence Report

1. Executive Summary

As requested by the management team of Baby Face, the marketing manager of Baby Face was assigned to conduct an exercise of carrying out an in-depth investigation and analysis of the Baby Cry doll product incident, and further to study the situations, list out the impacts to the business, and provide recommendations for improving the current situations and preventing the same situations from happening again in the future.

This report mainly looks at four aspects which are the product design, manufacturing process, customer feedback and the legal requirement. The marketing manager, Sunny LI led a team of three people for the exercise and collected data from interviews, surveys, the official Internet websites of the government, and related Internet websites and Social Networking websites, in order to understand the details of case of the incident.

The Cry Boy doll incident impacts the customer satisfaction, company image, product revenue, and poses a risk for the company to bear legal liability. The root cause of the incident is due to the damage of the torsion spring in the Cry Boy doll. The skipping of the quality control process during the manufacturing of the product makes the material problem of the torsion spring cannot be detected.

This report provides three recommendations on the areas of Quality Improvement, Product Re-launch and Public Relation. The Quality Improvement recommendation is to improve the overall product quality and reliability in the long run to prevent the same problem for happening again. The other two recommendations of the Product Re-launch and the Public Relation are to mitigate the current situations, so as to recover the loss of the product sales revenue and gain the customer confidence & loyalty back.

2. Introduction

2.1. Terms of Authorization

On 2 January 2010, a Baby Face management meeting was held. The meeting objective was is to discuss the issues raised by the Cry Baby doll product. In the meeting, the management of Baby Face decided to assign Mr. Sunny LI, the Marketing manager of Baby Face to be the owner of the Cry Baby doll incident. Mr. Sunny LI would be taking up the responsibilities for the needed investigations, analyses and providing suggestions to resolve the issues. There would be a due diligence report which would be submitted to the Baby Face management by Mr. Sunny LI by end of February 2010.

2.2. Background

Baby Face is a Hong Kong owned company established in 1990, it is a manufacturing company producing toy products, mainly dolls. Its manufacturing factory is located in Dongguan, China, employing 200 people including staff and workers. The major market of Baby Face is the Hong Kong market with the annual sales revenue of HKD 83 million in