New Heritage Doll

Emily Harris has been presented with two distinct proposals. First, the Match My Doll Clothing line proposal would extend an existing line that has proven to be a success. Second, the Design Your Own Doll proposal is a new initiative that would use online customization tools to allow users to create a unique doll to their personal specifications. Given the choices presented to Emily Harris, I believe that New Heritage should proceed with the Match My Doll Clothing line. Despite the fact that Match My Doll Clothing does not have the same potential for rapid growth, it is a much safer and more profitable investment for New Heritage and does not require the same upfront sunk costs.

While Design Your Own Doll has significantly higher revenue beginning in 2013 through to 2020, it faces a significant risk in that profits may not be as high as projected since the popularity of most doll lines have historically waned after only a few years, according to Harris. That is, if customers lose interest in the Design Your Own Doll idea altogether in a few years, New Heritage will not be able to recoup the significantly higher costs associated with the proposal. As such, any investment in Design Your Own Doll would require significant confidence in the fact that it would have long-term traction with customers in order to mitigate this risk. In particular, this is important as even as projected, Match My Doll Clothing will have higher growth per year by 2015 (though still significantly lower expected revenue). It is likely that the projections for Match My Doll Clothing would be more accurate over the long-term due to the variable nature of the clothing line and the fact that the company has some experience there already, whereas the Design Your Own Doll concept is much more risky and untested.

Match My Doll Clothing would be a way for New Heritage to reinvigorate interest in their existing models of dolls without worrying about a new product line that would be competing for the same market share and cannibalize sales. In fact, as New Heritage is based on the idea