Key Events/Case Synopsis
Despite being well-established, over the last three years, sales at Atherley Furniture Company have remained the same while profits have declined by almost 24%. Their chair division produces three different types of chairs, the Atherley, the Caledonia and the Parkdale. Each model has its own production plan and production costs. The increasing production costs, alongside the intense competition the company faces, have become a great cause of concern for John Atherley.
Problem Statement
Is Atherley Furniture Company able to continue to operate their chair division while reducing the debt and increasing the profits of the company?
Objective of Key Player
With the use of the company’s income statements for the last four years, John Atherley must decide the future of the company’s chair division.

Situation Analysis
The Canadian furniture industry suffered greatly in the 1990s because of the economic recession, as well as, the increasing foreign competition. By 1995, the decrease in the value of the Canadian dollar allowed some relief to the industry by making imports more expensive. Despite many Canadian furniture manufactures having closed, the Atherley Furniture Company was one of the few who chose to use this opportunity to reposition themselves and improve efficiency. Regardless, the company remains suffering due to their inability to exploit opportunities and change weaknesses into strengths.
SWOT Analysis Strengths | Weaknesses | * Skilled and loyal workforce * “Caledonia” model requires less labour therefore has lower production costs * Ability to modify equipment to produce the “Atherley” model * Well-established * Good reputation * Good relationship with retailers * Stable sales | * Heavy debt load * Lack of modification to equipment to use in the production of the “Atherley” model * “Parkdale”