Shao’s Children Wear is geared to expand international market share, into the US market as one of the first target for international penetration in children’s clothing. Shao’s Children Wear has a current cash flow of $30 million, of which $24 million will be budgeted for US market expansion. This segment of the cash flow is budgeted for capital investment in new equipments and new facilities, as well as adding more workers and managers. Shao’s Children Wear weights the priority in selection of the portfolio on alignment of strategic objective and equally with return on investment as we want to expand to US market and targeting to increase additional $50 million worth of company capital and assets.
With the new Product D introduced, the total budget of $25.5 million would exceed current funding of $24 million from the Strategic Business Unit. To reduce budget allowance and avoid over expanding Chao’s Children Wear capacity, it is important to review current portfolio to establish the best value for the company.
There are a number of ways to consider. The portfolio selection process was re-evaluated. Project priorities were reclassified (see below). Product line D is recommended to include as the second in project priority in the product portfolio with Line B, which was at the second level and now moved to the fourth level in project priority.
Additional ideas with streamlining processes or cut down expenses using Six Sigma/Kaizen methodology for allowing more product lines in the portfolio to maximize future return are some of options Chao’s Children Wear are considering.
Overview of existing Portfolio
Project A
The aim of this project is to bring the existing costume line of apparel into the United States market. This project is already 9 months in, and is expected to wrap up in 3 months.
