Case Analysis Douglas Fine Foods
Mathew Douglas is the chief executive officer (CEO) of Douglas Fine Foods. Douglas Fine Foods is the largest privately held Canadian food services company. DFF provides healthy and nutritious business dining, catering, residence and camp food services, food service design and equipment and vending machine services. The business also focuses on creating relationships with a vast array of organizations that have a consistent need for food and beverage services. DFF prides itself in its ability to offer unique and flexible services to clients.
WANTS/ALTERNATIVES Case Analysis Douglas Fine Foods
Mathew Douglas is considering various alternatives regarding the trajectory that Douglas Fine Foods should take so as to fulfill his goal of turning the business from an entrepreneurial one to a professional one.
Douglas can position Douglas Fine Foods for either immediate or eventual sale to a financial buyer, strategic competitor/buyer or a private equity firm.
Quantitative and Qualitative Concerns
- Proceeds from the sale of Douglas Fine Foods.
Quantitative and Qualitative Concerns-Case Analysis Douglas Fine Foods
- Douglas Fine Foods needs to attain approximately $5 million to $10 million EBITDA to successfully exit the business and food industry, as well as, position the company as an attractive take-over target.
- Accumulated debt and lack of steady cash flow to enable DFF attain the status of a business ripe for take-over.
Douglas can consolidate a number of smaller and mid-level market players to position Douglas Fine Foods to compete with other large companies in the industry. The companies that Douglas wants to acquire are West Coast Company (WCC) and WilliamsFoods.
Quantitative and Qualitative Advantages-Case Analysis Douglas Fine Foods
- Douglas Fine Foods will grow volume and quickly grow its EBITDA to position itself as an ideal company for possible sale.
- Attain economies of scale from unique and more customized approach to serving segments of the market.
- Decrease costs through the achievement of economies of scale and grow the company without increasing the workforce or acquiring additional staff.
- DFF’s bank had tentatively agreed to provide the financing needed to pursue the acquisition of another business based on the good relations between the two companies.
Quantitative and Qualitative Disadvantages/Concerns
- Tightening margins year and after year that limit the performance of companies in the food market.
- Restricted maturity of the industry and lack of buyer interest in Douglas Fine Foods, that is, lack of businesses calling to purchase the company.
- Acquiring West Coast Company means that he would take on debt and the synergies and operating improvements could be uncertain.
- Acquiring WilliamsFoods will be an expensive venture.
Douglas can grow Douglas Fine Foods organically.
Quantitative and Qualitative Advantages-Case Analysis Douglas Fine Foods
- Plenty of opportunities for winning contracts to supply organic food to various customers.
- Formidable workforce or employees ready to provide the services required to meet the organic food demand in the market.
- Increasing health issues such as diabetes, obesity and high cholesterol that make more and more people consciously choose health and wellness as an ideal lifestyle which reflects in consumer diets that grow the organic food market continuously.
TURNING THE BUSINESS FROM AN ENTREPRENEURIALLY ORIENTED FAMILY BUSINESS TO A PROFESSIONALLY MANAGED MULTIMILLION-DOLLAR COMPANY THROUGH LEADERSHIP
In order for Douglas to transform Douglas Fine Foods into a professionally managed multimillion-dollar establishment, there are certain issues that he needed to consider or requirements that Douglas Fine Foods need to meet so as to attain the professionalism level desired by Douglas. These include:
- Employment standards – This was a challenge since the employees were engrossed in a culture that did not meet the prerequisites of a multimillion-dollar organization. For instance, there was an absence of a dress code policy, use of unprofessional communication and excessive tolerance for risk.
- Health regulations and workplace safety – Douglas Fine Foods main concern was the physical state of their building that had not changed in more than two decades.
- Workforce satisfaction – In an effort to motivate the employees, Douglas’ greatest challenge to attaining workforce satisfaction despite sufficient remuneration/compensation was the fact that the employees felt restricted or limited and, thus, were unable to provide recommendations.
- Information systems – Douglas solicited the advice of a renowned accounting and advisory firm in Canada to help with employee relations and information systems. However, the main challenge to meeting this requirement is the employees’ resistant to change. For instance, an employee decided to fill a report by hand instead of using the computer system.
Application of Leadership Style to transformation of DFFCase Analysis Douglas Fine Foods
From Douglas’s leadership style, it is evident that he did not take time to supervise the employees based on the employment standards he is now considering. This style of leadership is Laissez-Faire whereby the leader fails to supervise employees or give regular feedback to those under his supervision (Johnson, 2018). His decision to transform Douglas Fine Foods from an entrepreneurial oriented business to a professional oriented business means that he will have to engage his employees actively so as to meet the professionalism requirements. As such, a Participative leadership style is ideal for Douglas in dealing with the employees since it values the input of peers and team members. One of the reasons why employees of DFF are resistant to change is because they feel like their opinions do not matter. It is for this reason that Douglas a renowned accounting and advisory firm in Canada to help with employee relations and information systems. Through the survey conducted by the accounting and advisory firm, Douglas learned new ideas on how to improve the nosiness. In as much as autonomy is vital to motivating employees, it is vital to note that another reason why the workers are resistant to change is because they were unwilling to deviate from the way they were used to doing things. Based on this understanding, a Transactional leadership style would be appropriate in this situation as it will enable Douglas to review results and correct or train employees when they fail to meet work standards or goals (Johnson, 2018).
Douglas also recognizes the resistance from two executives in the senior management team. However, Douglas has also acknowledged the lack of depth in his strategic direction or vision for the firm. He cannot convince clients to work and stay with Douglas Fine Foods alone as excluding the two executives with dissenting views from the company will not only result in loss of clients but also tainting of the legacy information of the company. Thus, Douglas needs to apply a transformational leadership style by encouraging high levels of communication from management to meet the objectives of the company. It is through transformational leadership that Douglas will get everyone on board with his idea of transforming DFF from an entrepreneurial oriented business to a professional oriented business.
Johnson, R. (2018). 5 Different Types of Leadership Styles. Smallbusiness.chron.com. Retrieved 24 January 2018, from http://smallbusiness.chron.com/5-different-types-leadership-styles-17584.html