DUDEWEAR

The solitary desk lamp burned into the darkness that had engulfed the office for

several hours now. Abdulla sighed, put down his pen and rubbed his aching eyes. It

was way past midnight. He glanced up at the wall calendar to his left. Even the sight

of exotic, bikini-clad women drifting lazily over a perfect beach could not raise his

spirits. He focused on the date 24th September 2013. In four days time he would meet

his bank manager and attempt to explain why his company–Dudewear had not

succeeded in significantly reducing its overdraft in over eighteen months. Turnover

was static at around $0.5 million. Credit from suppliers was drying up and the

company was trading at little more than breakeven. To add further to Abdulla’s

problems, the lease on his factory premises, a decrepit industrial area in Harare would

expire at the year’s end. The area was to be turned into another office/shopping

complex, and he hadn’t yet found a suitable alternative location.

Tomorrow he would meet a strategic consultant-an MBA student from the GSM, who

had offered to provide strategy advice on the ‘cheap’. The idea of a business plan had

never particularly appealed to Abdulla, who liked to keep his ideas to himself, and

didn’t have time to plan anyway. Yet, perhaps tomorrow’s encounter might offer

some inspiration to help him through these difficult times.

Dudewear Limited had been producing rubber and latex garments for the consumer

watersports market for some thirty years. This consisted of complete wetsuits and dry

suits and accessories such as waterproof gloves, socks and linings. Most of the firm’s

end-users consisted of leisure divers, surfers, windsurfers and sailors, rather than

professional water-related workers, who generally demanded specialist wear that was

too expensive for the average water ‘nut’. Dudewear had resisted the temptation to

expand into related products, such as masks, fins, breathing equipment and boards,

because these required far more sophisticated machinery and skills in the

manufacturing process. Instead, Dudewear purchased waterproof fabric in rolls from

suppliers and fabricated water sports garments in various sizes, based on eight

different patterns. Abdulla had developed these styles himself from over 30 years’

experience in the textile industry, so they were tried and tested. Lately, however, the

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company was beginning to lose market share to more fashionable garments made by

the major water sports manufacturers.

Abdulla himself was usually an energetic and charismatic figure, with a capacity for

hard work and immense knowledge about his industry. A 58 year-old divorcee, he

often regretted his failure to produce any heirs to his business. Although desperately

wanting to grow his business, there was nobody Abdulla felt he could trust with major

company decisions, so he ended up dealing with administration, finance, marketing

and production matters himself. This meant that decisions could be made quickly,

without referral to anybody else. Recently, however, Abdulla was beginning to feel a

little out of touch with innovations he read about in the trade press. Concepts such as

direct marketing, telesales and segmentation seemed part of an increasingly alien

world. He believed that investing in computer technology might ease his burden, but

didn’t really know where to start.

The company employed one sales representative on a commission-only basis to exact

orders from wholesalers and retailers. The sales representative, Johnny, was a

resourceful and eager worker in his late twenties, who seemed to have a natural flair

for selling. He had previously been a brand manager at a major textile company, but

had left because he wanted more autonomy in his work. Lately, however, he was

becoming increasingly discouraged at his inability to influence things at Dubewear

and at his reliance on commission income. Meanwhile, Abdulla devoted upwards of

12-15 hours a day to running Dudewear and wishfully recalled those heady days in

1982 when he founded his dream enterprise along with two partners. Both of these

had now retired, but continued to exact a toll on company profits through each

owning a third of the firm’s equity. The remainder of shares was owned directly by

Abdulla, but neither he nor his sleeping partners possessed significant extra capital to

invest in the business.

Currently, Dudewear employed twelve semi-skilled workers as fabric cutters, sewing

machinists and finishers. Although producing around 1000 garments a week, there

was enough capacity to produce twice that number. Most workers were women

willing to labour for a relatively low hourly rate to secure a second income for their

families. There were no bonuses or fringe benefits, although overtime was

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occasionally required if large orders materialised. Staff turnover was higher than in

many of Dudewear’s competitors. Usually there were enough applicants to fill vacant

positions, but recruitment had become more difficult lately-possibly due to new office

developments moving into the area, or a demotivated workforce.

Abdulla poured over his hand-written notes. Although difficult to validate, he

reckoned the Zimbabwe water sports garments market to be worth around $1billion in

2010 and growing rapidly along with much of the leisure sector. Official production

figures revealed 11 water sport garment manufacturers, of whom 3 dominated the

Zimbabwean market with 60 % of total output. Most of the remainder were

insignificant producers with a handful of workers. In the warmer climates of South

Africa, Southern Europe, North America and Australasia, sales were inevitably far

higher; Dudewear had no distribution network there. The company focused instead in

Zimbabwe, but around 10% of production found its way to retailers in Northern

Europe; where some consumers recognised the high quality and value-for-money of

Dudewear’s products. Of particular merit was a fabric strip patented by Abdulla in

1995 that allowed the suit wearer’s perspiration to evaporate, whilst still keeping the

suit warm. This produced greater comfort for the watersport enthusiast and reduced

the need to clean the suit.

Independent watersport shops accounted for 70% of product sales, but the

overwhelming majority of Dudewear’s production went to a handful of wholesalers

that Abdulla had traditionally done business with. Sport chain stores and mail order

sales provided a small but growing outlet for the product; but Dudewear had no direct

involvement in these channels.

Overwhelmed by the problems he faced, Abdulla bowed his head in despair and

prepared for another long night.

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Questions

1. Why is it so difficult for Mr. Abdulla to think strategically? What

solutions do you recommend to help turn him from an operational manager into

a strategic manager?

2. You are the lucky MBA student preparing a strategic analysis for Mr.

Abdulla. Prepare a brief report examining: a) the strengths and weaknesses of

Dudewear Limited, and b) the opportunities and threats that face the company.

3. Based on your SWOT, what strategies would you recommend to Mr.

Abdulla in order to overcome the difficulties his company is experiencing?

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