MGMT125 – Principles of Management

Mid-Semester Assessment: Case Study

CMR Fashions Limited

Read the following case study and answer all questions.

In 2007 Candice Richards started CMR Fashions, a small home-based operation that produced custom fashion
designs for a small but growing following of customers. Candice created her design drawings at night, and
working alone during the day she tailored outfits for her customers. Over the next 2 years Candice’s reputation
spread, and the growth in demand for her outfits compelled her to take on her first employee in early 2009, and
her second and third employees by the end of 2009. In 2013, CMR Fashions was approached by a large
clothing retailer (FF Limited) with a chain of major stores located across Trinidad and Tobago. The large retailer
would carry CMR Fashion’s women’s casual wear, office wear, and club wear fashion lines in their Gulf City
Mall store only, but due to overwhelming demand, CMR’s clothing lines were soon made available at all of the
retailers stores in Trinidad and in Tobago. This rapid growth forced Candice to register her business as a limited
liability company, establish a small factory operation situated in a warehouse building located in Couva, and
grow her staff to 16 employees.
CMR Fashions Limited still caters to their own customers, and the company has its own small outlet store
located at the front of their factory building. Sales have continued to grow each year, and Candice still creates
her own designs, although many new designs have been produced by some of her employees.
CMR’s contract with FF Limited allows Candice to continue to sell her designs at her company’s own outlet
store, but prevents her from expanding her clothing’s availability to other clothing retailers in the country. This
contractual restriction was not a problem in the earlier years, but by 2018 it became clear that sales growth
with one major retailer had reached its peak. Sales are not declining, but sales growth is now extremely minimal.
Candice is now looking for a way to grow her sales at a much greater rate. She has been approached by 2
other major clothing retailers to enter into contracts with them to supply her clothing, but due to her existing
contract she is unable to do so.
What decision should Candice make?
She is thinking about ending her existing contract, but she has a great relationship with the retailer, and is
grateful to them for giving her the opportunity to grow her business over the years. So, ending her contract with
them is not attractive.
Another option available to her is to start a new company, with new branding. This 2nd company will be able to
enter into new supply contracts with other nationwide retailers, and all she will have to do make minor fabric
and design changes to her fashion lines so that conflict with FF Limited will not take place.
Candice is also thinking about expanding her business by opening new outlet stores. This will require a major
investment, but she is not sure how well new outlet stores will perform. Her existing outlet store at the factory
building makes a profit, but not a very large one. New stores will have significantly more expenses for rent,
interior design and outfitting, staff, security and other related costs.
Question 1: Strategic Management & Goal Setting (Chapter 5) [30 points]

A. Explain the importance of strategic management [4 points] and list two benefits that this will bring to
CMR Fashions Limited. [4 points]
B. What is a Mission Statement [2 points] and explain the importance of having a Mission Statement? [4
points]

C. Create a Mission Statement for CMR Fashions Limited. [4 points]

D. Explain the difference between Strategic Goals and Operational Goals [4 points]
E. Using the case provided, create two (2) Strategic Goals and two (2) Operational Goals for CMR
Fashions Limited. Remember these goals must be S.M.A.R.T. [8 points]
(Information on S.M.A.R.T. goals can be found in the PowerPoint presentation for Chapter 5 on the E-Classroom,
slide no. 8.)

Question 2: Decision Making (Chapter 6) [20 points]

Candice needs help so that she can decide what to do to increase CMR’s sales revenue.
A. Explain the Decision‐Making Process and apply the 6 steps in this model to this case study. (You
are free to decide which choice Candice should make.) [12 points]
(Decision-Making Process: Chapter 6, pages 193-197. Also, see the PowerPoint presentation for Chapter 6 on the
E-Classroom, slides nos. 12 and 13.)
B. Why would it be a good idea for Candice to solicit the views of her employees when making this
decision? [8 points]
(Information on Participative Decision Making can be found in the PowerPoint presentation for Chapter 6 on the E-
Classroom, slides nos. 10 and 11.)

Instructions
❖ Read Chapters 5 and 6 in your textbook. Solutions to the questions in this case study are
based on these chapters.

❖ Prepare your responses to all questions in a Microsoft Word document. As an alternative, you
can Google Docs. Save your work as a PDF document, and submit your work via email to:
▪ [email protected]

❖ Please include a cover page.

❖ Make sure your responses are properly labelled. (Examples: 1A, 1E, 2B)

❖ Due date: Friday, April 30th, 2021

 LEARNING OUTCOMES & RUBRIC [50 points]

Question 1: Strategic Management & Goal Setting [30 points]

Learning Outcomes Question Excellent Good Needs Development
Explain the importance 1A: Explain the importance [3-4]: Student has [2-3]: Student has [0-2]: Student has
of strategic of strategic management
[4] clearly and concisely briefly defined vaguely or not defined
management defined strategic strategic strategic management.
and list two benefits that this
management in their management in their Student has not
will bring to CMR Fashions
[4] own words. Student own words. Student indicated the importance
Limited. has also indicated has also indicated of strategic
the importance of the importance of management.
strategic strategic
management in their management.
own words.

[3-4]: Student has [2-3]: Student has [0-2]: Student has

listed 2 distinct listed 1 benefit that vaguely listed 1 or no
benefits that strategic benefits that strategic
strategic management will management will bring
management will bring to CMR. to CMR.
bring to CMR.
Explain the concepts 1B: What is a Mission [2]: Student has [1]: Student has [0-1]: Student has
of organizational Statement
[2]
and explain clearly and concisely briefly defined a vaguely or not defined a
mission and vision defined a Mission Mission Statement in Mission Statement in
the importance of having a
[4] Statement in their their own words. their own words.
Mission Statement? own words.

[3-4]: Student has [2-3]: Student has [0-2]: Student has

clearly explained the briefly explained the vaguely or not explained
importance of having importance of having the importance of having
a Mission a Mission a Mission Statement.
Statement. Statement.
Explain the concepts 1C: Create a Mission [3-4]: Student has [2-3]: Student has [0-2]: Student has not
of organizational Statement for CMR Fashions created a solid created a fair created a Mission
mission and vision Limited.
[4] Mission Statement Mission Statement Statement which
which clearly which somewhat indicates CMR’s
indicates CMR’s indicates CMR’s direction and operational
direction and direction and intent.
operational intent. operational intent.
Describe the types of 1D: Explain the difference [3-4]: Student has [2-3]: Student has [0-2]: Student has not
goals an organization between Strategic Goals and briefly defined both briefly defined either defined a strategic or an
should have Operational Goals
[4] a strategic and an a strategic or an operational goal but has
operational goal and operational goal and very briefly indicated the
has clearly indicated has briefly indicated difference between the
the difference the difference two.
between the two. between the two.
Describe the types of 1E: Using the case provided, [7-8]: Student has [5-7]: Student has [0-5]: Student has
goals an organization create two (2) Strategic created two SMART created two strategic created 1 strategic goal
should have Goals and two (2) strategic goals and goals and two and 1 operational goal,
Operational Goals for CMR two SMART operational goals, neither of which are
Fashions Limited. operational goals. which possess some SMART in nature.
Remember these goals must SMART elements.
[8]
be S.M.A.R.T.
Question 2: Decision Making [20 points]
Learning Outcomes Question Excellent Good Needs Development
Identify the basic steps 2A: Explain the Decision‐ [10-12]: Student [7-10]: Student has [0-7]: Student has not
in decision making Making Process and apply has clearly briefly described described each step of
the 6 steps in this model to described each step each step of the the DMP and has not
this case study. (You are of the DMP and DMP and has applied each step to the
free to decide which choice applied each step to somewhat applied CMR case.
[12] the CMR case. each step to the
Candice should make.)
CMR case.
Discuss the 2B: Why would it be a good [6-8]: Student has [3-6]: Student has [0-3]: Student has
advantages and idea for Candice to solicit clearly indicated, in clearly indicated, in clearly indicated, in their
disadvantages of the views of her employees their own words, 4 their own words, 2-3 own words, 1 reason
participative decision when making this decision? distinct reasons why distinct reasons why why it would be a good
making [8] it would be a good it would be a good idea to solicit the views
idea to solicit the idea to solicit the of their loyal employees.
views of their loyal views of their loyal
employees. employees.