Kingston-Bryce Limited Business Case
Valerie Brown
Rasmussen University
GEB3422CBE: Leading Change
David Jones
September 16, 2023
Purpose
Kingston-Bryce Limited has been working toward becoming the leader in custom dining
room furniture in the Southeast. Since 1993, they have rapidly expanded their operations to
become the largest manufacturer in the state of Florida and with the opportunity to purchase
Quality Kitchens, another leader in custom kitchen cabinetry throughout Florida, but this is not
without risk or cost. KBL stands to triple their workforce and expand into a larger, more diverse
market. The expansion of KBL into the new market will require strategic use of the $5-million
budget and 18-month timeline. While KBL has been working toward expansion and diversity for
many years, it is more practical to acquire Quality Kitchens with their market, customer base,
and locations over building from scratch as KBL. A make or buy analysis has been used in this
case to evaluate the benefit over risk of purchasing Quality Kitchens rather than starting the
expansion from scratch.
Pros and Cons
Though this purchase has many pros associated with it, there are also cons that could
pose as threats or risks for KBL in the short term for this project. The first pro is the project
manager, Valerie Brown, who has successfully completed projects of this scale in the past,
including the acquisition of Patriot Woodworking in 2016 with a similar cross-functional team
and timeline. This project came in nearly $500,000 under-budget and expanded KBL’s
manufacturing abilities by 150% in under two years. Overall, the experience of the project
manager and the cross functional team will be an asset in maintaining the budget and timeline
while ensuring the smoothest possible transition between organizations.
Another pro is the willingness to sell by Quality Kitchens owner, Kate Drazy. KBL shop
foreman and sales departments have worked closely with Mrs. Drazy for many years in
furnishing new kitchens that she has designed for her customers. She is a subject matter expert
with over 30 years of experience in custom kitchens, bathrooms and home remodeling. She has
decided to sell Quality Kitchens and remain on the board of directors of ServPro, a home disaster
clean-up company. Her willingness to sell and the rapport KBL has built with Mrs. Drazy over
the years puts us in a better position to assuage any worries she may have for the future of the
company and the employees that will be absorbed during the acquisition. These are all beneficial
to KBL as we are able to apply this knowledge to our offer and position the company to be the
clear choice as her successor.
There are a few potential cons related to the acquisition of Quality Kitchens despite the
apparent pros associated with the project. While many of the cross-functional team members
have worked together on previous projects, those who were brought over from Quality Kitchens,
including Emily Smith-Certain and Kendall Lewis, Esq as well as members of the production
and sales teams within both organizations. Bringing together this many new players can cause
personality conflicts and work culture difficulties, which will have to be addressed at the outset
by upper management. This will prevent any disagreements from becoming a large-scale issue
and will set the organization off on the path to success. Further, with the economic downturn
related to the COVID 19 pandemic and the rising cost of goods, KBL stands to spend more
money than expected on materials over the next 18 months which could have an adverse effect
on the overall $5 million budget that was set forth at the beginning of the project. Meticulous
planning from department heads and accounts managers will prevent overspending and
unnecessary losses associated with inflation.
Risks and Opportunities
Large scale projects such as this one come with large scale risks and opportunities. In this
case, KBL has the opportunity to triple their workforce, expand into a more diverse market and
overall increase their profitability by purchasing Quality Kitchens and absorbing their
employees, properties and equipment. By absorbing the company and its assets, KBL saves
overhead costs of purchasing new workspaces because Quality Kitchens owns their three
manufacturing centers and sales rooms. This will allow KBL to transfer ownership of these
buildings and equipment and spend less of their $5 million budget. However, this is not without
risk. The absorption of Quality Kitchens manufacturing centers, sales rooms and equipment
requires inspections for any maintenance or repairs issues, fire-sprinklers, electrical and
financials to ensure there are no active liens on the properties. If any of these liabilities are
missed during the process it could result in significant losses for KBL.
Budget/Funding
The total budget for the project is $5 million to be spent on the purchase of Quality
Kitchens, their showrooms, manufacturing warehouses and equipment as well as transferring
over their employees, inspections and other aspects of closing a purchase of this magnitude. The
project manager has worked closely with a commercial realtor to ensure that the best price is
paid for the assets of Quality Kitchens as well as all inspections have been performed and all
buildings are in working order with no major repairs or reconstruction necessary. The marketing
division of KBL has evaluated the location of all properties including showrooms and noted that
the location on the downtown square provides optimal foot traffic for those who may be looking
for more upscale custom dining room furniture and housewares, increasing the potential for
sales.
Budget Allocation
Activity Notes Direct Cost Indirect Cost Total Cost
Quality Kitchens
Asset Purchase
includes:
Showrooms,
Manufacturing
warehouse,
equipment transfer 2,500,000 500,000 3,000,000
Employee Transfer
Includes Salaries,
onboarding and
training, hiring for
extra positions 1,500,000 250,000 1,750,000
Inspections/Permits
Includes
Inspections of all
properties to be
acquired in the
purchase prior to
close, permits for
any potential
repairs or
construction 5,000 2250 7,250
Legal
Legal/Contracting
Fees- paid per hour
budgeted over 18
months at 5 hours
per week 2250 500 2750
Marketing
Marketing for
rebranding and
reopening upon
close of sale 200,000 40000 240,000
Total Cost 5,000,000
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