Divine Furniture Manufacturing Company

Shloka Singhania

Executive Summary
 Divine Furniture is a company that manufactures and sells high quality desks and cabinets to

various parts in Canada. Divine Furniture has increased profits and sales since the 5th year and

successful since then, however there are new entrants such as China and German manufacturers

into the Canadian market which makes it difficult for divine to rely only on local markets and

have no competitive edge. Mr. Divine therefore decides to expand the European market as it

occupies a quarter of worlds production. Mr., Divine is now evaluating the options to penetrate

into the market.

Upon Analysis and careful considerations, I recommend a partnership would be the best

strategy and option for Mr. Divine because of the current market senario and his past experience

with agents and distributors. In this case, Mr. Divine will understand why entering into

partnership would be the most suitable strategy as compared to other strategies. Mr. Divine will

find an execution plan and strategies for his business in European market.

Situation analysis

Divine Furniture is a reputed company that has been in the furniture business since 1984 and

because of its increasing profits and sales trends been characterised as a successful company in

the furniture market. Divine is known for its high quality of material and skilled workers that

provides excellent customer service by focusing on utmost customer satisfaction by adhering to

their needs and tailoring the product as desired. Divine furniture quotes a reasonable price,

provides with aesthetics, delivers high quality wood and focuses on customer needs which

generally are people looking to buy. Divine has also included French speaking staff for better

customer support and assistance and operates at 100% capacity representing strong relationship

with its suppliers thereby having the best quality seasoned wood available at warehouse prior to

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6 months in advance which mitigates the risk of non-delivery or low stock .The company focuses

on personal selling by operating through 22 showrooms at various locations domestically.

On the other side, Divine has an unusual product (Adhering to customer needs) that has a small

market and therefore small customer base which limits its selling options. Divine lacks

competitive advantage over others as the entry of new manufacturers such as china and Germany

will make it difficult to survive only on the basis of local market and not having any other global

market to rely on. The company’s strategy of selling it personally in showrooms restricts it from

large marketing and attracting customer on large scale basis.

In order to overcome its weakness, Divine has further decided to penetrate into the European

market. There’s a huge scope for Divine in European market as a quarter of the world’s furniture

is produced here and has shown a phenomenal increase. Divines road map to European market

will help grow and reposition the business by creating new customer base, restructuring its

prices, outperforming its competitors, global branding and through networking across globe

attract more investors.

Divine still has a long way to go as there are threats to business by the entry of Chinese and

German Manufacturers that are also already well established into European market where major

imports are made from china because of its low cost of production. The exports are also

dependent of current financial crises going on.

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 Assumptions (omit)

Core problem

To analyze the suitable market entry strategies for expansion in European furniture Market.

Evaluative criteria

There are many possible market entries strategies that Mr. Divine can use to penetrate into

the European furniture market. However, current Business situation and the future prospects

needs to be evaluated first to list down the criteria. The basis for the criteria is global

diversification and recognition, gaining a competitive edge, Brand development and increased

sales and profit. These criteria are suitable for Mr. Divine because:

1)Mr. Divine currently operates only in Canada which focuses on personal selling of unusual

product that’s purely based on tailoring customer needs which provides a small customer base

and limited selling options which in turn affects the profits.

2)There will always be a threat of new entrants into the market which places Mr. Divine in a

position to either grow his business locally or also go global for gaining a competitive advantage

over others.

Talking about the entry into the European market, there’s a huge market for furniture and

having business there will be profitable as he will get global recognition and investors that will

help him network and build around the world.

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 Alternatives and Analysis of alternatives

After careful evaluation the criteria, some of the market strategies alternatives that might suit

Mr. Divine are:

1. A Partnership

2. An agent

3. Or, e-commerce

Upon analysis the alternatives that are best for Mr. Divine are: Firstly, he can research about

the manufactures that operate in same furniture sector that is based on customization and have

networking with relevant trade associations. After which he can propose a partnership to the

Manufacturing company that is already established and has a strong customer base which saves

him time to get establish by himself. This is the best strategy as upon research it is found that

there is a high demand in furniture industry but 85% of production is in house and the remaining

is satisfied by Chinese imports because of low cost of production. Partnership will help Mr.

Divine to reposition his business as all the profits , liabilities and control would be shared and he

will be able to achieve the same level of market share and brand recognition as the customers

will already be associated with the other company. The Partnership sustains when there are years

of expertise involved (Assuming the manufacturing company already established has it) , large

customer base , market demands and capital go in right direction . For Mr. Divine this feels like

the best strategy to easily penetrate.

Secondly an agent, can be a way to gain market share because he already has the required

information regarding customers and he only takes commission for sales made. Whereas the

profits are concerned, agent is better than a distributor because agent gets pay by commission.

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But an agent won’t be responsible for the dried-up sales and the customer satisfaction. Choosing

a right agent is risky as there has to be some sales made and if the agent dose not turn out to be

good then the money and reputation is already at stake. Considering Mr. Divine’s previous

experience, I would suggest to not go with agent and try other options.

Thirdly, e-commerce is great platform to enter a market because it doesn’t cost much.

However, Mr. Divine will have to spend money on initial set up such as advertising, promotion

campaign and a web site designer. Even if the site is launched in market it would be difficult for

Mr. Divine to set up a customer base as the market that he operates in is huge and is based on

tailoring customer needs product. There is no standard product sold which makes it difficult for

Mr. Divine as he need to start it from starch and will be difficult to reposition his business.

Decision and Justification:

After in depth analysis of market entry strategies for Mr. Divine to enter the European Market, I

have concluded that Partnership strategy is best suited for him as it will give him a comfortable

position regarding the customers, competitors and the market he penetrates in. Mr. Divine will

have a share in profits, loss and liabilities, which will be his survival strategy in the European

market as there are many new entrants which are adopting a strategy of take over or producing at

low cost. Mr. Divine will be at breakeven in the starting years, but the information obtained will

give him an edge over others in order to grow in future. Having said that, European market

already has players like china established and its making its way in Canada which is a threat to

the domestic market Mr. divine operates in. Therefore, having a global trade will benefit Mr.

Divine and save him for any future loss. Also, the comprehensive and economic trade agreement

that Canada has signed with Europe made it easier for the Canadians to do the business.

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Implementation for divine furniture:

For implementing the plan, I would go for partnership as the market strategy. As per my research

in Europe there are 3 major suppliers that Mr. divine could dive in for partnership which are

Germany, Italy and Poland. Overview of 3 suppliers are:

 Germany: Brunner is one of the leading furniture manufacturers that deals in high

quality chairs, tables and contract furniture which is in line with Mr. Divines furniture

business.

He can contact the management for proposal of partnership through email :

info@brunner-group.com and telephone :+49 7844 40 20.

 Italy: Billiani specializes in manufacture of wooden chairs and stools and contract

segment which is in line with Mr. Divine business and also caters to needs of customers

tailored made products which is the main strength of the business.

He can contact the management for proposal of partnership through email :

esempio@esempio.it and telephone : +39 0432 740180.

 Poland: Furniko is a popular furniture-based company which deals in office furniture

such as desks, armchairs, tables and other such related products, having a high reputation

and open for collaboration with companies that will help them grow in other countries as

well. Mr. Divine can contact the management through email: biuro@furniko.pl and

telephone : 94 341 54 62.

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 Firstly Mr. Divine needs to have his own website that displays the information about the

company and its products , Secondly Mr. Divine has to connect more of local persons in

each of the country for more information about the company its products and repute ,

then he need to construct a plan and proposal by analyzing the market trends to propose a

partnership . After which he can contact the management of the company through a

translator if required and negotiate the terms and conditions of the partnership which

includes the profits / losses share and liabilities of partnership. He can also contact an

agent to get the required information about the company on minimal commission.

Thus, the implementation plan gets concluded.

Apprentices

Matrix on analyzing the Alternatives

Alternative
Criteria
Partnership Agent E-commerce

Market
5 4 3
shares
Profits 4 3 4
Branch
5 4 3
recognition
Reposition 5 4 4
Total 19 15 14

Closed to 1 is least effective and closed to 5 is the most effective.

Bibliography

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https://www.marketwatch.com/press-release/furniture-market-trends-2019-global-industry-

analysis-share-top-manufacturers-application-growth-regional-outlook-opportunities-forecast-to-

2024-2019-09-30

https://ec.europa.eu/docsroom/documents/7572/attachments/1/translations/en/renditions/pdf

https://www.furniko.pl/kontakt/

https://www.channelfutures.com/channel-programs/looking-to-enter-the-european-market-do-your-

homework

https://www.dexigner.com/directory/detail/17329