Master Decker Expansion Opportunities Case Solution

2. Problem and Issues

A problem faced by Master Decker was the changing market dynamics, which raised the need for it to expand and adapt itself to the evolving market needs. The booming housing industry and changing customer preferences required it to adjust it's business's offerings to stay competitive and profitable. 

It should be considered that Master Decker has established a good reputation for itself by ensuring quality services delivered to its customers. This has caused it to get many customers through referrals and word of mouth. However, the limited scope of operations of the business has deprived it of potential incremental revenue. Having entered the fourth year of its operation, following the same business model has raised the question over the sustainability of the business. 

Also, changing consumer trends have made them more quality-focused and price elastic. The prevalence of DIY product poses a threat to the deck restoration business. This is because the demand for deck restoration services might decline as people would indulge in self-activities to reduce costs.
Therefore, with the emergence of competitors, changing consumption and buying patterns, the boom in the housing industry there is a need for Master Decker to expand and diversify to stay sustainable in the future.

3. Qualitative Analysis    

There are three expansion opportunities available for Master Decker to consider. Considering the deck building industry, it is eminent that the industry is very fragmented considering a large number of players. Also, there are many players that do not have prior experience, yet are operating in the industry. Master decker, through its good reputation and strong client base, can easily capture the market despite the presence of a few large brands. However, Master Decker would have to forego the referrals by some big brands in the deck-building industry as it would become a direct competitor to them. Furthermore, it would have to maintain a higher level of working capital as its scope of operations will increase.

Moving on, the other option available is to offer Exclusive Master Decker Stains. With the growth of home and project owners who prefer DIY considering the labour-intensive nature of deck building and restoration, the stains would cater to the market segment. This will broaden the product offering of the business and increase its value proposition. However, the margins for the business will be thin. 60 days’ inventory maintenance would require high working capital investments.