Dahlia Case Study

This assignment had to be written for the class of Management and Organizations at Stenden University, course IBMS, first year. We had a group of 6 and had to work it out together. We were enjoying getting into the world of IKEA, the world’s most furniture store on the market.

As previously stated the buyers in the furniture manufacturing industry are furniture retailers. Therefore they will require furniture to continue business. There are no substitutes that provide the same use as furniture. In relation to the furniture industry as a whole, there are still very little substitutes to furniture aside from a higher use of closet space or unorthodox measures by consumers. An example of this would be one's choice to live without furniture, which in most cases is very unlikely. Furniture has become a household necessity and consumers have little or no desire to change their lifestyles by eliminating that need. Therefore the threat of substitutes to the furniture manufacturing industry is very low to the point where it is almost non-existent.

1. Use marketing channels to contact customers such real estate brokers, newspaper, WWW, magazines, billboards (W1 O4)

Most of the competitors offer custom furniture in specific styles or with limited choices. Doe Furniture needs to emphasize the custom nature of their work. They can offer to build specific pieces to order based on a picture a customer brings in, on the size and design of a room, or a customer may suggest the functionality needed for a piece and a piece will be designed for them.

The household wood furniture industry is healthy and growing. Total industry sales in 2007 were estimated to be $31 billion at manufactures prices. Three categories of furniture divide the industry. First upholstered furniture which makes up 50% of sales, Secondly wood furniture at 40% of the industry market share which has grown 2.5% in 2007 and is projected another 4% in 2008, this second category includes dining room and bedroom furniture. Third and last is the other category at 10% this includes ready to assemble and casual furniture. Haverwood has established themselves as a medium to high priced furniture company through 1,000 carefully selected high

Today’s world is facing strong influence of globalization in each and every aspect of our lives. It is expressed through: free trade agreements, foreign direct investments, international trade, facilitated movement of labour, capital and resources, as well as a strong competition that eventually gives more power to customers. In addition, it resulted in the economic boom of the developing countries, with substantial dominance of China that mainly benefit from their massive labour force, its low cost and high comparative efficiency. This phenomenon has impacted all industries around the world. In particular, furniture production is going through a trend of moving to China that “in 2002

* Furniture industry comes under an oligopoly market, where there are a limited number of sellers.

Guillermo Navallaz is the proud owner of Guillermo’s Furniture Store located in Sonora, Mexico. He chose this area because of its excellent supply of timber for the variety of tables and chairs produced by his company. Business was going well until the late 1990s’ when two events caused a decline in Guillermo’s business. First, a new overseas competitor entered the Sonora furniture market with their high-tech approach that provided furniture to exact customer specifications at low prices. The second event was that the community of Sonora began to grow. The increase of people and jobs

3. Hire a senior, experienced manager from a competitor to be in charge of the company.

I figured being a furniture salesman would be a smooth, and easy job while I was studying for a degree in intelligence. I learned very quickly, that the area that I am currently in is not so friendly on the furniture market. People use furniture every day; when you wake up in your bed in the morning, sit at a table to have breakfast, or relax on the couch after a long day, it is scattered all over your house. In 2013, the furniture industry sold over $101 billion, making it one of the most popular, and best-selling commodities in the United States (U.S. Furniture Retail, n.d.). The market for this product can be a very interesting, and dependent market, especially in my area, Fort Myers, Florida (Southwest, Florida or SWFL).

Dahlonega is a bustling city filled with rich history and culture. Much of the local culture is seen in the art that flourishes in Dahlonega and is evident in the many art galleries that have taken root and thrived in the area. Many of the art galleries in Dahlonega are intertwined with the burgeoning wine industry in Dahlonega. Both the art and the wine are infused with the flavor of Appalachian mountain culture, which is something unique and exclusive to this town. The local art paired with local wines makes the art scene of Dahlonega vital to the overall sense of community and support of locals. These local art galleries capture the fascinating culture of the art scene in Dahlonega and can be enjoyed as key attractions

the China market IKEA China has been allowed to exceed and expand its sourcing of

Based in Denmark, IKEA International A/S is one of the world 's top retailers of furniture, home furnishings, and housewares. The company designs its own items, and sells them in the more than 140 IKEA stores that are spread throughout approximately 30 different countries worldwide. The company also peddles its merchandise through mail-order, distributing its thick catalogs once a year in the areas surrounding its store locations. IKEA is characterized by its efforts to offer high-quality items at low prices. To save money for itself and its customers, the company buys items in bulk, ships and stores items unassembled using flat packaging, and has customers assemble many items on their own at home. The company is owned by

Ikea's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that as many people as possible can afford to buy them (www.ikea.com)

IKEA’s strategy before the mishaps in America could be characterized as going against the norm charting their own path to success using low priced manufactures to secure lower selling prices aimed to target those who were of older age and of middle class standing. Their new strategy was to target those of a younger demographic, young married couples, college students, and 20-30 something singles. By reemphasizing design, promoting through hip quirky advertisements, and encouraging consumers to do away with their old furniture, IKEA revenues doubled in a four-year period. IKEA today has adapted somewhat of a local customization strategy where their store layouts will resemble that of many local household layouts as proven by their success in China where they failed to expand beforehand. They also keep their prices extremely low in some areas as China by sourcing a large percentage of products in the area of operation.