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Dmc Case

Decent Essays

Key Considerations The reasoning behind the primary problem being recognized as the shrinking profit margins was due greatly in part to the information provided on the five-year income statement and the nature of the industry. Net income has ranged from a net loss of $1.9 billion in 2009, to a shift in net income of $1.9 billion the following year, to a net loss of $1 billion the most recent reporting year of 2012. DMC has increased their sales from 2008 at $5.2 billion substantially to over $8 billion over the last three reporting years (2010-2012). Although increasing sales are great, they mean close to nothing if DMC has a net loss. Unstable margins make the company unattractive in the investor eye and can lead to a quick decline due to …show more content…

An industry shift is recommended because, DMC core values align with competing with tomorrow’s market not today’s. A shift in channel distribution and customer acquisition could land DMC the first mover’s chair in the industry. Without risk there can be no reward. For …show more content…

Lastly, with the problem of shrinking margins, B2C ecommerce transactions are a solution since they yield much higher margins with no change in costs. The success of sales through an ecommerce strategy can be found through a promising marketing campaign focusing on the core values of quality and pricing and positive industry trends. To ensure the campaign reaches the correct audience the company will first select a narrow market through accurate market research, create a lead generating ad, and follow up until the website receives traffic. While DMC’s revenues will still be at the hand of their customers changing demand, they can reach a broader audience to account for these shifts in demand via the web. This platform will also allow DMC to collect information on consumer trends to further the efficiencies of production. DMC only held $8 billion of the $430 billion dollar electronic component industry in 2010. The industry is predicted to have an 8% growth annually to a potential $628 billion dollars in 2015. DMC can acquire more of the industry by being able to reach more customers regardless of location through the

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