New Heritage Doll House

New Heritage Doll House

Jase B. Joshua III

Northwood University

MBA 634

Dr. Adam Guerrero

Introduction:

        The New Heritage Doll Company founded in 1985 by Ingrid Beckwith, a retired psychologist specializing in child development and the grandmother of two young girls.  Dr. Beckwith's dolls struck a chord among mothers and grandmothers who also rejected the dated, clichéd images portrayed by the popular dolls of the day.  Like the heirloom dolls, celebrity dolls came with more elaborate stories and accessories, the price of the dolls collaborated that.  The dolls priced for customers that would shop for high-end products.  The company wanted to try something by broadening the business with extending the brand and not losing the business of the consumers wanting the high-end dolls.  For this to happen, Emily Harris, the vice president of the company must get the approval of the budgeting division on her proposal which would drive growth to the company.  The two proposals are expansion opportunities to Match My Clothing Line and Design Your Own Doll Line of clothing.

Executive Summary:

 Emily Harris, vice president of New Heritage Doll Company Productions Division, is contemplating on which two proposals she could discuss at the capital budget meeting.  She has recommended her projects to strengthen the division's innovative product lines and drive future growth.  The company's operating budget and capital resources were creating the capital budget to represent 15% of the company's EBITA.  By 2009 New Heritage had 450 employees with $249 million of revenue and $27 million in operating profit.  The company has two variables to consider which are the quality of investment opportunities and the overall competitive advantage.  We will be able to pull information for NPV, IRR and payback period.  By gathering this information will allow the company to see which proposal to choose.  Both projects will be analyzed to see which one would gain the most value.  After all of the data has been reviewed you will notice that building and customizing your dolls will provide the greater overall revenue for the company.  

Problem Statement:

 The New Heritage Doll Company is contemplating between two proposals before theme, Build and Design Your Own Doll or Match My Doll Clothing Line.  Emily Harris, vice president of New Heritage Doll Company, is struggling between which proposal she should discuss at the budget meeting.  She must influence the budgeting committee to accept the best venture between the two proposals.  Their decision will be made on the proposal that will gain the best revenue with high NPV & IRR along with a payback period that has the shortest term.