Chapter: 1

INTRODUCTION
1.1: INTRODUCTION

In an environment of rapidly escalating competitive challenges, every company has to invest

across the value chain to achieve world-class competitive capability in each of the businesses in its

portfolio. These strategic interventions results in progressive transformation of traditional

organizations into internationally competitive organization. Each business within portfolio is

continuously engaged in upgrading competitive capability to effectively address growth challenges in

the fast globalizing Indian market, and over time in the world markets. The vision of every company

is now apparently is the creation of unique business models that foster international

competitiveness of not only its business but also the entire value chain of which it is a part. This has

made functioning of each organization much complex than the olden days.

Systematic and organized approach is indispensable to meet this challenge of complexity.

Every organization cannot do the same since it is costly and time consuming. All these leads to the

emergence of a modern organization concept which relies on identifying and grouping the work to

be performed, defining and delegating responsibility and authority , and at last establishing

relationships for the purpose of enabling people to work most effectively together in accomplishing

objectives. The success of a firm is determined by how far they are effective in these aspects.
 Chapter: 2

INDUSTRY PROFILE
2.1: PROFILE OF FURNITURE INDUSTRY
All the companies and activities that are involved in the design, manufacture,

distribution, and sale of functional and decorative objects of household equipment’s are

known as furniture industry. Furniture has existed throughout history for many reasons.

Obviously, the first is that of function and practicality. Chairs were designed to be sat upon;

tables and stands for putting things on; beds and couches to rest upon; chests and

wardrobes to store things in. Historians contend that furniture also played a very important

role in indicating ones social status. Comfort and practicality often took a backseat to form

and beauty. Only within the last century has technology had a drastic effect on furniture

making techniques and even materials than ever before. Everyone has their favorite piece of

furniture. One’s choice may be inspired by form, function, comfort, craftsmanship, price tag

or a combination of any of these. The furniture industry in India is considered as a “non

-organized” sector, with handicraft production accounts for about 85% of the furniture

production in India.

The furniture sector in India only makes a marginal contribution to the formation of GDP,
representing just a small percentage (about 0.5%). Among all the types of furniture used,
office furniture segment is the one that boasts the most important companies, both from
the point of view of size and of the technological innovation of the production. The furniture
industry employs a total of around 300,000 workers. The total production of furniture in
2001-02 (according to Annual survey of Industry) was USD 3580 million
2.2: OVERVIEW OF FURNITURE INDUSTRY
Furniture is the name given all movable and immovable accessories provided for rooms or

other areas of any structure from cottage to place or religious edifice. It may be made from a wide

range of materials but wood and metal are usual. What is known about furniture stretches back to

the ancient Egyptian and progress with some breaks to the present day. During these long span basic

forms, such as chair, table and bed were evolved and passed on to the succeeding people and

culture.

2.3: HISTORY OF FURNITURE

Modern furniture design after world war was first were of three kinds functionalist modern,

transactional modern and commercial modern. The commercial modern became associated with the

extra values which commercial furniture often offered by the manner in which it was advertised. All

furniture design was influenced by the social and economic trends of the era, formal living standard

declined, and mechanization of the household labor expanded. Living spaces shrank, particularly in

height and home entertainment became important after world war second especially people

married at a younger age. As total population growth accelerated and generally raising standard of

living was enjoyed by a vastly enlarged middle-income group. Furniture become smaller, lighter,

easier to maintain and more widely distributed

The word furniture comes from the French word ‘FURNITURE’ which means equipment. In

most other European language, however the corresponding word (French Meoble, Germany mobile,

Spanish Meoble, Italian mobile) is derived from the Latin adjective mobiles, meaning movable.
2.8: MARKET SIZE

India’s total population is near 1000 million people, of whom about 80 million live in 8

metropolitan middle cities. There are around 40 million consumers in the upper class and upper

class.

Presently the Indian market size of furniture is about US$ 2 billion and almost 85% of total

sales are realized in tidy workshops owned by carpenters. There are only a few companies which

manufactures and market brand furniture. Since furniture in India is still sold mainly as no-name

product and consumers do not express any brand preference, there is a tremendous sales potential

for leading companies.

According to infinitum Management Services the household segment absorbs 65% manor

local manufacturing companies are to be found more in the office furniture segment rather than in

home furniture.
 Chapter: 3
COMPANY PROFILE OF MARUTHI FURNITURE AND
INTERIOR
INTRODUCTION ABOUT THE COMPANY

3.1: COMPANY PROFILE

Name of the Firm : MARUTHI FURNITURE AND INTERIOR

Place : (Factory) korangrapady, udupi.

: (Showroom) udyavara, udupi

Date of Registration : 19/09/2003

Name of Organization : Private Limited Company

Registration Number : 8179

Industry Category : Manufacturing

Main product : Wooden furniture, Handcraft, Interior work

Power Used : Electricity from MESCOM

Number of Employees : 25

GST Number : 29AAQFM5588F1ZJ

Total Investment : 100000

Contact number : (factory) Mbl: 709012500

: (Showroom) Mb: 9845247191

E-mail : maruthifurnitureandinteroior@gmail.com

Maruthi furniture and interior Private Limited has become landmark in the region of udyavara,
udupi. Maruthi furniture and interior Private Limited is a golden feature in providing high quality of
furniture and interior work to
 This organization established in [2001]. It was gradually expanded as small scale unit through

the years of[ 2001] to [2002] and later in the year 1994 it was incorporated and registered under

Indian Company act 1956 , there by affecting phenomenal sole ownership of the company. The main

objective of the company is to carry on the business of Interior work , manufacturing, assembling

and in all type of wooden furniture having at showroom at udyavara, and it is one of the largest

wooden furniture showroom in udupi.

Maruthi furniture and interior is today one of the largest manufactures of wooden furniture

in udupi region. They have very good demand for their products in spite of huge price tag, as it

provide quality product to its customers. Maruthi furniture and interior is today one of the leading

furniture giant which believes in loyalty and hard work. It is in deeded a matter of wonder and

greater appreciation that tiny furniture shop emerged the current status of large multi storied and

multi-dimensional one. An two storied building with a floor area of 35000 square feet

accommodating the registered and sales cum showroom is right by the side of the national highway

66 udupi.

Maruthi furniture and interior Private Limited company incorporated under the company’s

act 1956. The main objective of the company is to carry on the business of interior, manufacturing,

assembling and in all type of wooden furniture having at showroom at udupi and is largest wooden

furniture showroom in udupi. Maruthi furniture and interior is dealing in furniture business since

[2001]. The major competitors are Harsha furniture, Damro Furniture, Royal plus Furniture and

Wood Art Furniture.

3.2: ORIGIN AND DEVELOPMENT

Prakash T kotian started Maruthi Furniture and interior Pvt Ltd as a tiny furniture trading

unit in [2001].Currently Prakash T Kotian is the managing director of the company. It was gradually

expanded as small-scale unit through the years [2001] to [2002] and later in the year 1956 it was

incorporated under the Indian company’s act, there by affecting a proprietorship nature of the

ownership of the company. At present it continue-e to be a private limited company under the

visionary stewardship of the managing director, Prakash T kotian

3.3: PRESENT STATUS OF THE COMPANY

Maruthi furniture and interior has become a land mark in the history of udupi. An institution

which had been instrument in projecting the name of maruthi furniture to the forefront of the

furniture industry of the world apart from its challengeable competition from the other furniture

manufacturing company..

It is deeded a matter of wonder and greater appreciation that is a tiny furniture shop emerged the
current status of a large-multi storied and multi-dimensional one. An two storied building with a
floor area of 35000 square feet accommodating the registered office and sales cum showroom is
right by the side of the national highway 66 at udyavara. Showroom has built in later stage as the
business grew larger. It is established in center of the udyavara which nearer to national highway 66.
Thus it is convenient for customer to visit the showroom. showroom was established in the year
[2005]. The magnificent building
 Chapter- 4

DIFFERENT DEPARTMENTS/DIVISIONS OF TIP TOP

FURNITURE PVT LTD.
FINANCE DEPARTMENT

4.1: SYSTEM

Accounting department is fully computerized and this department uses tally software
package.

4.2: STRUCTURE OF FINANCIAL DEPARTMENT

ACCOUNTS MANGER

EXECUTIVES

CLERKS

4.3: ACCOUNTS AND ADMINISTRATION

Finance is that administrative area or set of administrative functions in an organization,

which is related to the arrangement or cash and credit so that the organization may have the means

to carry out its objectives as satisfactory as possible.

Administrative cum accounts department is situated in the ground floor of the factory. The
managing director is the top executive of the administrative system
In the accounts department there are two officers. The company follows double entry book keeping

system and the accounting section is fully computerized.

The company keeps the following books of accounts, journal, ledger and cash book. In fully

computerized accounting system there is no need of manual posting only transaction are entered

and posting, balancing etc. are done by the computer itself.

4.4: CAPITAL STRUCTURE

Capital structure of the firm refers to the making up of its capitalization and it includes all

long term and short term capital and borrowed funds (debts). The capital structure of the company

is very important because of the profitability and financial strength of the firm depends upon the

capital structure.

The main components of the Maruthi furniture’s capital are as follows,

1. capital: Capital of RS 2000000

2. Loan from State Bank of India (secured)

3. Vehicle loan from ICICI Bank

PURCHASING DEPARTMENT

The principle functions of the purchasing departments are:

1. Locating and selecting sources of supply for materials or service required.

2. Interviewing suppliers, represent arranging conference.

3. Requesting for quotations and conducting negotiation.

4. Procuring material and service when required.

5. Verifying quality and quantity received.

6. Approving invoices and handling rejection and adjustments.

7. Maintaining records necessary for proper operation of its function.

8. Keeping informed on business trends, assembling and analyzing.

9. Pertinent, data on market supply, demand, price trends etc.

: STRUCTURE OF PURCHASE DEPARTMENT

PURCHASE MANGER

STORE KEEPER

CLERKS

UN SKILLED LABORS
 PRODUCTION DEPARTMENT

Production Manager

Supervisors

Office staff

Carpenters/polishers/labor
s

4.14: PRODUCTION

The production function of a business is concerned with the creation of a product or services

required to satisfy customer needs, wants and desires. In any business that supplies a product or

service, it is believed that activities of production system must be closely related to the customer

demand in the continuous flow of orders.

Production function will be considered most effective when it serves a dual purpose.

It must operate to satisfy, customer demand particularly relating to quality, quantity, price and
above timing of delivery as scheduled in the orders
 1. It must permit production activities to operate in an economical and efficient manner

because cost of production is a vital factor in facing the market competition and is

ensuring normal profit or return on the investment.

4.16: PRODUCTION PROCESS

Maruthi furniture and interior is able to keep up their unique position market because of it
particular style of production. High quality furniture with excellent design is made in a company. The
production function is carried out to the following process.

Chart Showing Production Process

SIZING

SEASONING

CARPENTARY

CARVING

POLISHING

UPHOLSERY

STORE
Sizing

In the first stage the round logs are cut in they required size by sawing. Then the pieces are

planned according to their necessity and design of the product. Various types of machines named

BIESSE, JADE for sizing process.

Seasoning

It is an important process of keeping the quality of the product the sized timbers are

seasoned in this stage. It is the process of removing the moisture from the timber by parsing heat

and cold at particular condition. By seasoning timber will become dry and hard and its quality will be

improved. There are two type of seasoning.

1. Chemical Seasoning

2. Natural Seasoning

1. Chemical Seasoning

Chemical seasoning is done in low quality timber. Certain Chemical used for this purpose.

Usually chemical seasoning is donning in rubber wood, due to this process it becomes hard and dry.

Now this kind of timber is very popular in office furniture and house hold equipment.

The Maruthi furniture and interior uses high quality wood (Rose wood, Teak wood,

Mahogany etc.) for making furniture. There is no need of chemical seasoning for then, as they do not

use low quality wood.

2. Natural Seasoning

In this case timbers are seasoned purely by way of natural storing in river or in open area for

long days. It is subject to rain and sunshine for some days. In this way all moisture is removed from

the wood and become dry.

Natural seasoning is time consuming process and same time causes delay in executing

orders. Hence to speed up seasoning plan is installed. Wood is kept in standard size and thickness in

the special plant and certain amount of steam and cold is passed through it. This may be done for a

period of 6 to 7 days. After completing the seasoning process . The wood is passed to the carpentry

section.

Carpentry

This is the main stage of production process. Carpentry section is biggest section in the factory

where more workers is required, compared to other sections. In this stage timber a log checked and

if any defective part detected that part is not used for further operation. Skilled labors are given full

freedom in their work. One worker is assigned the complete work of one product. So there will not

be any confusion and if any repair is needed he can easily do it.

Assembling of furniture is carried out in this section. If any carving work is necessar y it will

be sent to carving section before assembling or after assembling, as the case may be.

Carving

After carpentry the semi-finished product are sent it the caving section, if necessary all the

carving on one product is done by the same worker. Highly skilled labors are employed for this work.

In Maruhti furniture and interior carving is done only by handwork. There is no machinery used for
this purpose because the quality of carving by machinery will not reach carving by machinery will not

reach carving by hand work.

Polishing

After carving the furniture is passed to the polishing section. In polishing the first process is

surface finishing by applying sand paper.

Secondly filling the surface by using transparent wood filter . It is used to fill up the holes

and small damages. After drying the filler sand paper work is three or more times. Thirdly the surface

is coated with sealer. Each time the sand paper work is repeated then putty work is done in each

furniture by using matching color of wood. Then the designing works are done on furniture and then

using seal mix stains it.

After these processes polishing is Carrie does it. There are two methods of polishing namely

hand polishing and spray polishing. The different type polishing is:

1. Natural polish

2. Lacquer polish and semi lacquer polish

3. Meal mine and glucose melamine polishes

4. Matt polish

5. Ordinary wood polish.

In the some are glazy and some are not glazy. The polish works takes more than 10 days.

After polishing is completed the furniture is moved the upholstery section, is found necessary.
 Upholstery
Upholstery is not used all type of furniture. It is used only in sofa, Divan coat, dining chair,

settee chair etc. this section uses various type of cloth, velvet (US, Indian, and other countries)

cotton etc. also high quality politeness form is used in inside the cover. After the upholstery work the

furniture are stored in the warehouse a transferred to the shop as and when required.

4.17: TRAETMENT OF WASTE

In furniture industry the production takes various stages. Certain amount of loss occur

various stages of production. There is always some waste and effective woods (sap-wood). The

wastes are sold as fire wood and saw dust.

4.18: PRODUCT MANUFACTURED AT GLANCE

PRODUCT WOOD

Wooden cot - Teak, Rose and Red

Dining table with chair - Teak, Mahogany and Red

Sofa set and Divan cot - Teak, Rose and Red

Dressing table - Teak, Rose and Red

Cupboard - Teak, Red and plywood

Door and Door frames - Teak and Rose

 Chapter-5

PORTER’S FIVE FORCES MODEL,

MC KINSEY’S 7s MODEL AND SWOT ANALYSIS.
PORTER’S FIVE FORCE ANALYSIS OF TIPTOP :
Michael Porter identified five competitive forces that shape every single industry and

market. These forces helped us to analyze everything from the intensity of competition to the

profitability and attractiveness of an industry .The following image shows the relationship between

the different competitive forces influencing and determining the competitiveness and profitability of

an industry.

1. Threat of New Entrants

According to Maruthi Furniture the threats of new entrants is considerably very low. For

new furniture industry to enter into a place like udupi is very difficult as majority of the market is

divided among Maruthi furniture, Harsha and Damro Furniture’s in the same location. Not only

because of the competitors new entrants would be less, it’s also because of the huge amount of cost

incurred to set up a furniture industry.

Bargaining Power of Suppliers

In Maruthi Furniture there are suppliers for

 Timber

 Polish material’s

 Miscellaneous

The suppliers may ask for higher price for the products they are supplying or may provide with low

quality items with the same price. The purchasing department must be very careful regarding

purchasing of everything and to ensure that all items conform to their quality standards

2. Threat of Substitute

Furniture made of steel; plastic, fiber etc. are threat to companies like Maruthi furniture which

make their furniture out of wood. Such furniture’s are less costly compared to those made of wood

and are also available in a number of designs. They are long lasting and easily portable from one

place to another. So, there is a chance that customers may get attracted towards such furniture’s. So

the threats of substitutes are more

3. Bargaining Power of Customer

The bargaining power of customers in furniture industry is high, but in Maruthi furniture it is

low since they give life time guarantee for their products. But, at times when the customers who

come are related to the managing partners or relatives of other officials in the company, they will be

forced to give some reductions in the product. 5. EXISTING COMPETITION

Increasing Competition

Furniture industry in India has started growing in a vast manner. Furniture being a necessity

its need have risen to a large extent. Furniture industries have grown in the states of Delhi, Mumbai,

Kerala, Uttar Pradesh and Tamil Nadu. Now days they have started developing the industry and have

more of premium products. Heavy competition is there in this field.

5.2: MCKINSEY’S 7s MODEL

After several years of research, Peters and Waterman concluded that there are seven

interdependent ‘hunks of complexity’ to actively consider, not just two. The 7S’s are:

 Strategy: The key strategic trusts that build sustainable competitive advantage and create
value.

 Structure: The way the organization is structured including the reporting lines.

 Systems: The business processes and procedures.

 Staff: the number and allocation of employees between the various constituent parts of the
organization

 Skills: The capabilities and competencies of the employees within the constituent parts of
the organization.

 Style: The management style of leadership adopted.

 Shared values: The core values that constitute the corporate culture.

The first three are known as the hard S’s and the latter four as the soft S’s.
 When applying the McKinsey 7S framework, it is helpful to compare where an organization is

at with where it desires to get to. Action plans for each of the 7S’s can then be developed to bridge

the gap. All 7S is needed to considered and crucially aligned.

1. STRATEGIES OF MARUTHI FURNITURE AND INTERIOR

Production level strategies to improve customer satisfaction

 Improving communication within the production department..

 Increasing customer involvement.

 Developing protocols and guidelines

Organizational level strategies to improve customer satisfaction
 Managing human resources.

 Public disclosure.

 Giving guidelines to customers on how to maintain the quality.

Other strategies
 Providing a number of different designs.

 Providing a culture of safety.

 Conducting research programs.

2. STRUCTURE OF MARUTHI FURNITURE AND INTERIOR

 The managing director and owner are the head of company.

 The head of the each department (finance, production, purchase, marketing, personal)

comes under the managing directo0r.

 Accounting department followed by the accounts manager, executives and clerks.

 Production department followed by the production manager, supervisor, carpenters,

polishers and labors.

  Purchase department followed by the purchase manager, store keeper, clerks and

unskilled labors.

3. SYSTEMS

 Quality assurance policy

 Complaints policy and relation procedures

 Corporate records management policy

 Dress code and uniform policy

 Equality and diversity

 Fire safety Policy

 Flexibly working and work-life balance

 Gender equality scheme

 Health and safety policy

 Providing good compensation

 Waste management Policy
 Records management strategy
 Employment welfare measures policy

4. SKILLS

The skills required in the constituent parts are

Technical skills
Involve process or technique knowledge and proficiency in a certain specialized field, such as

engineering, computers, accounting, or manufacturing. These skills are more important at lower
levels of management since these managers are dealing with employees doing the organization’s

work.

The technical skill involves the manager’s understanding of the nature of job that people

under him have to perform. It refers to a person’s knowledge and proficiency in any type of process

or technique. In a production department, this would mean an understanding of the technicalities of

the process of production. Whereas this type of skill and competence seems to be more important

at the lower levels of management, its relative importance as a part of the managerial role

diminishes as the manager moves to higher positions. In higher functional positions, such as the

position of a marketing manager or production manager, the conceptual component, related to

these functional areas becomes more important and the technical component becomes less

important and the technical component becomes less important .

Human Skills
Involve the ability to interact effectively with people. Managers interact and cooperate with

employees. Because managers deal directly with people, this skill is crucial. Managers with good

human skills are able to get best out of their people. They know how to communicate, motivate,

lead, and inspire enthusiasm and trust. These skills are equally important at all levels of

management.

Human skills are also the ability to interact effectively with people at all levels. This skill develops in

the manager sufficient ability.

a) To recognize the feelings and sentiments of others.

b) To judge the possible reactions to, and outcomes of various courses of action he may
undertake and
c) To examine his own concepts and values this may enable him to develop more useful

attitudes about himself.

5. STYLE
Participative Management Style
Also sometime known as consultative management style, this decision making style in

management revolves around getting lots of feedback from your staff before coming to a conclusion

and making a decision. This means that the process can take a bit longer as there are more voices to

be heard, but getting a consensus on major decisions can lead to buy in from those who might

otherwise have been opposed to the implementation of such changes. The downside to this style of

management and leadership is that employees may feel that you don’t value their opinion or are too

stubborn if after all of the feedback is received you go off and make the decision in your own

without incorporating any of their feedback.

6. SHARED VALUES

Stewardship
The management of Maruthi Furniture develops and manages their human, financial, material

and other resources to benefit and support those the management of Maruthi Furniture serves.

Accountability 
The management of Maruthi Furniture is responsible for our actions and focus on how each

person can contribute to the success of the organization.. 

Respect

The management of Maruthi Furniture treats all people with compassion, concern, and fairness.

Excellence
The management of Maruthi Furniture strives each day to constantly improve the quality of the

product and services provided to the customer.

Dignity
The management of Maruthi Furniture acknowledges the uniqueness of each person in the eyes

of God by honoring their inherent value and worth.

 : SWOT ANALYSIS OF TIP TOP FURNITURE PVT LTD.
The basic objective of SWOT analysis is to provide a frame work to reflect on the firm ability
to overcome barriers and to avail of opportunities emerging in the changing environment, the
diagnosis of strength and weakness can be fruitfully on if the environment factors and market
conditions are considered always with the internal capabilities. SWOT analysis is important tool to
find strength, weakness, opportunities and threats. Strength, weakness, opportunities and threats
are the elements or key factors that influence the survival and development of any organization.

Strengths:

 Largest distribution within udupi.

 Superior product quality and wide range of products manufactured out of quality wood.

 Strong brand equity.

 Superior understanding of the market.

 Healthy financial structure.

 Timely delivery and customer satisfaction.

 Well established manufacturing base.

 Dealing in imported furniture items.

 Highly skilled professionals and qualified workers.

 Leadership attitude, energy and aggression in the market place.

Weaknesses:

 Priced charged are high and not affordable to all classes of people.

 Since furniture manufactured is made out of quality wood. It is heavy for easy
transportation.

 Lack of awareness among many people.

 Cost of production is high.

 Industry has slow absorption of innovation change.

Opportunities:

 Big potential market in Design sector & emerging new market segment in Services.

 Availability of well qualified manpower.

 Research & Development capability.

 More efficient production method.

 Availability of new developed technology and equipment.

 Need modernization of infrastructure.

 Expansion of profit.

Threats:

 Compensation from few new entrants in to industry.

 Chances of prices of wood going up which will further increase the cost of production.

 Lack in the shortage of supply and availability of materials in time