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About Brothers Furniture Limited
The Brothers Furniture Ltd was established in 1985. It has only three branches that are located in Gulshan, Uttara and Baridhara. The furniture company employees over 150 full-time employees with its annual turnover US $52, 00, 000. The company manufactures wooden furniture and machine made wooden door, doorframe, stair rail, molding bit, wooden floor, kitchen cabinet etc. The Brothers Furniture Ltd has good technical skills and marketing experiences that have been praised in different international trade fairs at home and abroad. As a result sophisticated machines and technology have been introduced in their Shahjadpur, Gulshan factory to cope with the demand of the customers. Nonetheless, in the recent years the company is facing fierce competition from other branded and non-branded furniture retailers.

Brothers Furniture Ltd. is a name that is synonymous with fine quality Victorian and Modern productions. Their professionals have a combined experience with furniture productions of over three decades. Their technical skills and experiences are not only limited within the territory of Bangladesh, rather it has broadened throughout the whole world. The sales and decorating staff have only but one mission, to assist and help customers to become a satisfied client. They are dedicated to provide you with proven expertise with customers’ fabric coordination and finish selection.

Their production coordinators strive to have a quality product produced in a timely and efficient manner. In the unlikely event a defect is found, customer’s complete satisfaction in quality and workmanship is guaranteed. Increasing demand for their wooden home and office furniture and machine made wooden door, door frame, stair rail, molding bit, wooden floor, kitchen cabinet etc. made them one of the dominant player in the stream line companies. There are one of the very few among Bangladeshi furniture manufacturers experiencing export business which gives them opportunity to achieve an international quality.

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At present Bangladesh is producing wide variety of international standard and quality furniture. People in Bangladesh are now choosing local furniture instead of foreign furniture. So. particleboard. processed wood. they guarantee customer’s satisfaction in quality and workmanship. by 2015 Bangladesh will earn export potential of crafts furniture accessories worth of USD 10 million along with furniture worth USD 40 million. guarantees customers two things: First. there is good potential for export of furniture and Bangladesh's furniture industries are ready for that. At present two relevant associations i.Brothers Furniture Ltd. The government of Bangladesh has declared the furniture industry as a 'Thrust Sector'. Second. Current Situation of Furniture Industry of Bangladesh Traditionally furniture in Bangladesh developed as cottage based industry. The export of furniture and allied products from Bangladesh has started from 1995.. melamine board. Furniture is a labor intensive sector and Bangladesh hasa large low cost manpower which is a vital factor in becoming competitive in the world market. Bangladesh Furniture Export Association (BFEA) has 12 members. innovative designs and use of diverse materials. It is estimated that. Medium Density Fibre Board (MDF). 2 . The main varieties of furniture are produced from wood.e. 2. steel etc. Bangladesh Furniture Export Association and Bangladesh Furniture Industries Owners Association (BFIOA) are actively working on materializing the potential of this sector. It is in early 90's when the furniture industry in Bangladesh transformed from cottage based industry to mechanized mass production oriented industries. Their prices are guaranteed to be the competitive most. Since then furniture businesses began to grow with modern machinery.

are major importable items. Scarcity of skilled manpower in handling modern equipment and machinery is limiting the prospect of growth of this Industry. This has the potential to increase to USD1b by 2020 provided productivity increases. hardware & accessories. timber. and in 2008-09 the value addition amounted to BDT1. shortage of electricity/gas etc. It is organized into 121 urban and peri-urban clusters.At present about 41. finishing/coating materials. and can initially expect 3 . Those involved have usually migrated from rural areas. The manufacturing of wooden furniture accounts for 0. hardware & accessories. while the others are small and medium-sized.29% of the country’s GDP. employing less than 150 employees. The sector. aims to export USD40m by 2015. and consists mostly of small and medium enterprises (SMEs). On average 60% of raw materials of furniture sector are imported from different countries. where between one and three labor work independently. the industry is represented by another 74.000 workers. This sector has some mentionable problems such as high import duties of some raw materials like good fabrics. which can be addressed through setting up more Technical Schools with a curriculum of short-term trade courses. wood coating materials.. world class fabrics etc.8b with an export volume of USD1. along with an additional USD10m in exports of accessories and furniture textiles.5% pa.560 enterprises and nearly two lakh skilled and semi-skilled people are engaged in this sector. graduating in the last 15 years from a cottage-based to a manufacturing industry. The industry employs more than 250. market linkage improves.926 freelance carpenters and carpenters' households. where along with government initiatives private sectors should also come forward. This is a highly labor-intensive industry. Furniture is one of the most rapidly growing sectors in Bangladesh. and compliance standards are met. The effective demandsupply gap in the domestic urban market by 2014 is estimated to be USD60m.8m . growing at 19. out of which only 35 can be identified as large firms. comprising 9. However.913 enterprises. Of those.

because of the extensive information it provides. macro-environmental and micro-environmental factors within the environment. situation and circumstances that a company is operating in at a given point in time.500 per month.to earn BDT1. For the better understanding of these five c we use different tools like SWOT analysis. as the sector offers both conversion and absorption of laborers. and at the same time can generate higher income for existing and new workers. The 5C analysis is considered the most useful and common way to analyze the market environment. weaknesses and competitiveness. which increases to BDT8. This mainly considers two things. While a situation analysis is often referred to as the "3C analysis".000 or more per month as skill level and experience grow. collaborators and climate. customers. It assists in planning for the future of the business and to find out the competitive position of the company.   Company’s external or macro-environment Company’s internal or micro-environment Situational analysis is the process of gauging the position. 3. Situational Analysis Situation analysis refers to a collection of methods that are used to analyze an organization's internal and external environment to understand the organization's Industry and competitive condition and competencies. The 5-c are company. PESTEL analysis and Poter’s Five Forces Model. A situational analysis is the process of identifying and evaluating existing internal and external elements that may impact an organization's ability to achieve its objectives. as growth in this sector can increase income for small enterprises. the extension to the 5c analysis has allowed businesses to gain more information on the internal. capabilities. 4 . Furniture has the potential to play an important role in favor of the poor. competitors. resource strengths.

1 PESTEL Analysis PESTLE analysis is in effect an audit of an organization’s environmental influences with the purpose of using this information to guide strategic decision-making. it will be better placed than its competitors to respond to changes.3. The assumption is that if the organization is able to audit its current environment and assess potential changes. 5 .

3.1 PESTEL Analysis of Brothers Furniture Limited Political Factors    Complex Political Environment: The political environment of the country affects the day to day operations of Brothers Furniture Limited. Bureaucracy: Due to bureaucratic government structure it is time consuming for Brothers Furniture Limited to get any kind of government permission or license Security and social welfare policies: The security and social welfare policy is very poor in our county therefore Brothers furniture limited has to take proper precaution and planning before opening new showroom or factory location. 6 .1.

Therefore Brothers Furniture Limited has to keep their customers’ lifestyle preferences while position the products and making promotional decisions.  Taxation policy: The local taxation policy deter minds how much profit the Brothers Furniture can make after Tax and make the industry attractive Political unrest: The frequent political unrest in the country brings in difficulty in business operations and financial loss for Brothers Furniture Limited Economical Factors     Cost of Labor: Low cost of labor of Bangladesh gives a competitive edge to Brothers Furniture Limited for outsourcing or foreign export Economic growth: The economy of Bangladesh is a growing economy therefore the furniture industry will boom with the economy of the country Inflation Rate: High inflation rate in Bangladesh increases the price of raw materials thus affect the price of the finished product’s price of Brothers Furniture Limited Changes in Global Economy: Since Brothers Furniture Limited is an export oriented company the changes in global economy affects the export policy or decision of Brothers Furniture Limited  Monetary Policy: The monetary policy of government has affect on the foreign exchange rate which affects price of imported raw materials and exported products Social Factors  Demographics and Social diversity: Due to the demographics and social diversity the customers’ preference varies. Therefore while designing the product Brothers Furniture Limited has to keep in mind to what social segment they are catering to make the product desirable.  Lifestyle preferences: Due to lifestyle preferences the consumer behavior towards a product depends.  Levels of education: Level of education helps the customers make informed decision about the products and they customers can compare the product features properly 7 .

the company cannot adopt those due to increased capital expenditure and non availability of technical expertise. Still the market segment that Brothers Furniture Limited caters to are educated enough to understand what the company is doing special with their product so that they can make better choice. But there is no proper implementation of the law.  Availability of Technology: Even though there are many modern technology is available globally which will make life of Brothers Furniture Limited very easy . 8 . Environmental protection issues: Environmental activist group of Bangladesh and abroad raise awareness against the use of timber for furniture and encourages the use of non wood furniture which is not favorable for Brothers Furniture Limited  Pollution and Recycling: There is environmental law in Bangladesh which Brothers Furniture Limited has to follow to maintain business operations in the country. Technological Factors  Technological Changes: The technology is changing very frequently worldwide but keeping pace this technological change is very expensive for Brothers Furniture Limited  Technological Know How: The technical knowhow is not very common in Bangladesh. The level of education of the Bangladeshi customers over all is not very high.before making purchase decision. Therefore Brothers Furniture Limited can be a little relaxed in abiding law for pollution and recycling. Environmental Factors   Climate issues: The climate or weather of country determines what kind of seasoning Brothers Furniture Limited has to do for their wooden products. Therefore for Brothers Furniture Limited has to train most of the new employee about the technologies that they use and it is also very difficult to replace or fill vacancy of a skilled labor.

opportunities.2 SWOT Analysis A SWOT analysis is a structured planning method used to evaluate the strengths. Though Bangladesh has very less implementation of such law the global market strictly protects the consumer’s rights. and threats involved in a project or in a business venture. Therefore to export globally Brothers Furniture Limited has to follow the customer protection regulations.Legal Factors  Labor Law: As Brothers Furniture Limited in a business which is highly labor dependent. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.   Strengths: characteristics of the business or project that give it an advantage over others. place.  Import and Export Policy: The import and export policy of government affects the purchasing decision of raw materials and product sales in foreign market ofr Brothers Furniture Limited 3. But we do not see any such implementation of that law in reality. A SWOT analysis can be carried out for a product. the company must follow the labor law of Bangladesh and ILO to maintain minimum standard of work environment. weaknesses. industry or person. Weaknesses: characteristics that place the business or project at a disadvantage relative to others 9 .  Customer Protection Regulation: Consumer rights are legally protected worldwide.  Copyright Law: The copyright law of Bangladesh gives companies like Brothers Furniture Limited protection against their creative designs.

The factors come from within a company's unique value chain.  Opportunities: elements that the project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or project SWOT analysis aims to identify the key internal and external factors seen as important to achieving an objective. SWOT analysis groups key pieces of information into two main categories:   internal factors – the strengths and weaknesses internal to the organization external factors – the opportunities and threats presented by the environment external to the organization 10 .

Weaknesses     Decreasing demand for traditional wooden furniture Not very well known in foreign market. devoted. Suppliers are more powerful as the most of the raw materials are coming from abroad No innovative marketing communication done to attract more customer Opportunities     Big potential market at home and abroad Established dominant competitors present in market Low cost labor can be a competitive advantage while penetrating foreign market Recent increasing interest of buyers about local furniture brands 11 . capable and dynamic human resources Strategically located factories in the city to meet instant need of customers Prepared to cater the local and foreign market Well established brand in the local furniture industry Strong retail network Participation in different fairs at home and abroad brought in more awareness among the customers Sophisticated Machines helps to meet customers increasing demand.1 SWOT Analysis of Brothers Furniture Limited Strength         Striking new modern designed wooden furniture Highly skilled.3.2.

It draws upon industrial organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. 12 .Threats    Cheaper substitute readily available in market Low price and availability of non wood furniture in the market are getting popular Poor infrastructure like transport increasing the price of raw materials and finished goods 3. Attractiveness in this context refers to the overall industry profitability.3 Five Forces Model of Competition Five Forces Model of Competition is a framework for industry analysis and business strategy development.

In the furniture market the barriers to entry is not very high therefore new competitor can easily challenge the existing players. there are lots of non brand furniture shops as well but they are not as big as Brothers Furniture Ltd.3. The major players in the market mostly cater to similar market segment and all has similar distribution channel. Partex Furniture. graduating in the last 15 years from a cottage-based to a manufacturing industry. Hatil. and in 2008 -09 the value addition amounted to BDT1. 13 . .8b with an export volume of USD1. However.29% of the country’s GDP.3. The manufacturing of wooden furniture accounts for 0. thereby reducing its attractiveness. Akhter Furniture. The threat of new entrants largely depends on the barriers to entry. High entry barriers exist in some industries whereas other industries are very easy to enter. Nadia etc. The competition is very fierce as the customers are very much price sensitive and quality is a very big factor. Navana Furniture.1 Five Forces Model of Competition of Brothers Furniture Ltd Rivalry among existing firms It is intense in the local market of furniture and the major players in the industry include Otobi. Furniture is one of the most rapidly growing sectors in Bangladesh. Risk of entry by Potential Competitors New entrants to an industry can raise the level of competition.8m.

The upper class or upper middle class are more into buying local furniture brands now a days but still a big portion of that group prefer imported furniture.The relative price and performance of substitutes. Therefore they move towards noon wood furniture or cheaper low quality version of wood furniture.The costs of switching to substitutes.Threat of Substitutes The presence of substitute products can lower industry attractiveness and profitability because they limit price levels. The threat of substitute products depends on:. But it seems high priced to the middle class and lower middle class people.Buyers' willingness to substitute. Brothers Furniture Ltd makes quality wood furniture which is quite reasonably priced. 14 .

Here high level of competition among the market players. This is the situation in case of Brothers Furniture Ltd. If suppliers have high bargaining power over a company.There are undifferentiated.Bargaining Power of Suppliers Suppliers are the businesses that supply materials & other products into the industry. 15 . integrity. quality and creativity. highly valued products. The bargaining power of suppliers will be high when. The bargaining power of buyers is greater when there are few dominant buyers and many sellers in the industry and the products are standardized. The local suppliers are very much available and they are not very much powerful. components)can have a significant impact on Brothers Furniture Limited's profitability. raw materials. Therefore the success story of Brothers furniture is backed by their performance. Bargaining Power of Buyers Buyers are the people / organizations who create demand in an industry. 4. Consumers are more powerful in this market because they have lot options to choose for.g. There are supports for the small and medium enterprises from government and NGO but the big contributors like Brothers furniture limited does not receive any kind of government or non government support.There are many buyers and few dominant suppliers. then the company's industry is less attractive. Conclusion: Branded furniture market in Bangladesh is extremely competitive market. The cost of items bought from suppliers (e. The government has declared the industry as thriving sector. But foreign suppliers have some bargaining power over the Brothers Furniture Ltd.