qwertyuiopasdfghjklzxcvbnmqw

ertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiop
People & Organizations
asdfghjklzxcvbnmqwertyuiopasd
MBA 7000 Assignment 2

fghjklzxcvbnmqwertyuiopasdfgh
[Pick the date]

user

jklzxcvbnmqwertyuiopasdfghjkl
zxcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvb
nmqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqw
ertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyui
opasdfghjklzxcvbnmqwertyuiop
asdfghjklzxcvbnmqwertyuiopasd
fghjklzxcvbnmqwertyuiopasdfgh
jklzxcvbnmrtyuiopasdfghjklzxcv
Contents
1. Introduction.............................................................................................................2
2 The Company........................................................................................................2
2.1 lifestyle changes Affect Shopping for Furniture..................................................3
2.2 Economic Crisis from COVID-19.......................................................................4
2.3 E-commerce Adoption.........................................................................................5
3 Recommendations...................................................................................................7
3.1Taking advantage of Furniture Rental Market......................................................7
3.2 Utilize Virtual Selling Methods.......................................................................7
3.3 Move your customers Online...............................................................................8
Conclusion......................................................................................................................9
Bibliography...................................................................................................................9

1
 1. Introduction

According to the report from Mckinsey Institute, the economies are going towards a
net-zero transition. Covid 19 played havoc on the international supply chain process
for many businesses including the backbone of the healthcare network as the nurses
are being burned out. (McLaughlin, 2020) Another study found serious damages
occurred to import and export trade since July 2020. They also found heterogeneous
effects on many industries while negative effects were observed on non–essential
durable products industries while medical products were thriving. (Hayakawa,
2021)Reporting the impact on international trade professor Felix Friedt says In the
first half of 2020 there was a marked reduction of Chinese export by 40 % and the
domestic supply was undergoing a demand shock, the infection on the supply chain
network caused a 75% reduction. (Friedt, 2020)

Turning to the Sri Lankan scenario the potential impact of Covid 19 is not similar to
any other economy in the world, the economy was undergoing a contraction in 2020
due to many sectors going to a standstill. Although the inflation was expected to be
5% due to high food prices and supply chain disruptions it was reported a marginal
decline to 4.8%. On the other hand, Sri Lanka is at high risk of depleting foreign
reserves, naturally, the investors gather to safe havens from local financial markets
and the local exchange rate depreciated drastically to the lowest index, therefore to
compensate for the Balance of Payments CBSL instructed the banks not to facilitate
non-essential goods. (KMPG, 2020) The businesses that manufacture the goods in the
country had to face numerous challenges due to the above reasons.

2 The Company

DAMRO is a Sri Lankan business that manufactures a wide range of modern and
traditional furniture. Since its inception, it has become one of the largest furniture
manufacturers in the world. The best example of its rapid success since Damro
launched in 1986 is its expansion into more than 241 showrooms globally. It now has
174 showrooms island-wide. The main reason for Damro's success is its ability to
2
produce high-quality furniture at an affordable price with outstanding customer
service.

DAMRO FURNITURE PRIVATE LIMITED for the financial year ending on 31

March 2020.

The revenue/turnover of DAMRO FURNITURE PRIVATE LIMITED is INR 100 cr

- 500 cr

The net worth of the company has increased by 225.19 %

EBITDA of the company has decreased by -32.15 %

The total assets of the company have increased by 26.14 %

Liabilities of the company have decreased by -47.54 %

The company has been able to continue to grow in the face of the global COVID-19
epidemic. It is the best explanation for its stability in the country. The company's
ability to carry on business despite catastrophic events such as the COVID-19
epidemic has contributed to the broad customer base it has built over the past 20
years. The company has already confirmed the future growth and sustainability of the
company in the Indian market. Despite the epidemic, Damro currently exports 100
feet, 40 containers a month to India. However, local showroom sales have dropped
significantly due to the occasional curfew in Sri Lanka. Therefore, the Company
intends to strategically enhance its Indian operations to ensure the job security of
Damro employees in Sri Lanka. The company also expects to increase its exports to
more than 150 units. (Editor, 2022)

2.1 lifestyle changes affect shopping for furniture

The impact of the Covid-19 crisis has had a profound effect on Damro's product's
consumer behavior and product orientation. It emphasizes the importance of
digitization and automation for the furniture industry. Furniture manufacturers are
pushing for innovation because of their personalized shopping experience and online-
savvy customers who expect competitive prices. Advances in digital technology and
communication tools have enabled furniture executives to respond quickly to changes
in consumer demand, reap the benefits of cost savings, and enhance their operational
efficiency.

The epidemic has created a high consumer demand for socially active brands and
environmentally friendly products such as Damro. Many consumers are developing
healthy lifestyle habits, especially in response to the correlation between COVID-19's
impact on personal health, pollution, and environmental destruction. They are
committed to the betterment of society through careful consumption. The furniture
industry is expected to generate $ 59.8 billion (USD) in expanding its market share in
3
eco-friendly furniture by 2027. (Harari, 2020)The rapid progress of these consumer
tendencies is a challenge that the company is experiencing.

To pace with the changes in the present as consumers and manufacturers are very
closely connected there are increasing investments in digital technology for marketing
the furniture and in warehouses and factories, automation solutions are being used.
The organization aims to gain the advantage of this change and to strengthen its
position in the market. The optimization of Damro products means delivering
innovative furniture high in quality quickly to the customer at a lower cost.

As a business strategy, it is essential to identify the changes in consumer lifestyle and

buying behavior in advance, especially in a pandemic situation. The furniture market,
the company expects to reach is spread over a highly complex demographic
landscape. The company started a survey to understand the lifestyle changes in the
target countries as it helps the company to decode the consumer, their shopping habits
(the recent shift of the consumers to digital marketing means), and also the changes in
values across different generations such as generation X or baby boomers, the cultural
responses to new market conditions. In this regard being alert to the current changes is
important as a lack of alertness may leave the company vulnerable. What is needed is
tailored marketing positioning and creating paths to market strategies. (Angus, 2017)

2.2 Economic Crisis from COVID-19

According to the Global Economic Prospects - The global catastrophe of the virus
epidemic created a rapid and massive shock in the global economy which is shrinking
as a result of frequent disturbances to it. According to the World Bank, the global
economy will shrink by 5.2% this year, which will have a severe impact on the
industry. It has been called the deepest depression since World War II and the worst
since 1870. (Felsenthal, 2020)

Unemployment has risen in the country as a result of the COVID-19 epidemic. Also,
due to the reduction in consumer expenditure, purchases of new furniture have been
limited at the discretion of the consumer, which has adversely affected the demand for
home goods. In addition, there is an increase in price-based competition between local
and foreign import substitutes, which contributes to the consolidation of industries.
Damro's revenue declined in 2020 as a result of the coronavirus epidemic, the
economic downturn could certainly have contributed to the rise in revenue instability.
This is another challenge for the company.

However, with the return of jobs, revenue is likely to rise again in 2021 due to the
increased purchasing power of consumers and increased demand for furniture

4
products. Furniture consumption growth in the first five months of 2021 is expected to
be 31% higher than the same period last year. It is more than 5% of the pre-epidemic
growth rates.

During the economic downturn, the company must explore new markets Europe is the
best possible market for Damro’s products The investments look sensible to the big
competitors like IKEA folds and this is the correct time to take the market share. The
research conducted in Europe confirmed that there is a huge opportunity. The
company has also initiated to carry out B2B business with European companies and
be allied with them to gain access to the available market opportunities.

During the downturn of the Sri Lankan economy launching a series of new furniture
products or improving the quality and appearance of the existing products may also
yield good results. Therefore scrutinizing the customer's need at this moment to check
whether the products and services of the company suit the present needs. Moreover, it
is an opportunity to outshine the company’s competitors.

In Covid 19 outbreak season there exists tremendous uncertainty in the global

economy. Therefore leaders should make sure that their businesses withstand
precarious circumstances and different adverse scenarios. Many companies that had
set financial buffers could face unanticipated threats or sometimes opportunities.
Therefore shorter planning cycles are the best to adapt to the new situation. Stress
testing can be used to test the level of resilience in such scenarios. (Reeves, 2019)

2.3 E-commerce Adoption

E-commerce is defined as the use of electronic means and modern technology to
conduct sales, purchases, exchange of products and services, and information in B2C
and B2B interactions. (Manzoor, 2010) From time to time new technological
advancements were introduced to the current business environment. According to
Chaffy E-commerce encompasses all types of electronic business transactions
between the companies and the stakeholders. As a result of the implementation of
electronic methods, communication inside the company had become faster and the
resources can be managed more efficiently within the organization. However, there
are a few obstacles that hinder the quick adoption of this such as the high operating
cost and the cost of training the staff. (Chaffy, 2009)

5
According to the former CEO of General Electric, there are three options for a
business that is not competitive "fix it, sell it, or close it. The furniture industry is no
longer price competitive as it becomes a pure commodity product and the retail chain
is broken. And new distribution channels are open. (Schuler, 2003) Internet retailing
will continue to be a viable option for the millennium as well as during the Covid
period. 40% of the so-called Gen X generation and 37% of baby boomers buy
furniture online. Altogether (47%) as these modern consumers use the internet and
social media, they tend to become more and more active shoppers and will spend
weeks doing in-depth research on products to make a purchase choice. This means
that furniture manufacturers like Damro will have to tailor their products to suit these
online platforms. Also, young prospective clients will want to include details and
alternative ideas. The inclusion of more specific choices made over the Internet
benefits all demographics. These are the general steps of your shopping journey with
us:

In the case of a developing country like Sri Lanka adopting e-commerce is different
and challenging. The country lags behind the developed world in e-commerce. The
way the companies perceive the benefits are different as many companies have not
identified the significant benefits of it. According to a recent study higher the level of
e-commerce adoption of more sophisticated technology in the Sri Lankan context they
have found a greater level of benefits. (Sachitra, 2019)

However, in the furniture market, so far online involvement was limited to browsing
and checking the furniture than buying them online. In the present scenario, the
buyer's journey can be expected 100% online transaction. With this situation, the
companies s must set competitive prices and also speedy delivery. The challenges are
the demand for an improvement in operational efficiency those who can fulfill this
requirement would be positioned higher in the market.

Through investments in technology, manufacturers can boost production capacity and

increase the flexibility of orders. For instance, cloud-based software can automatically
connect orders with cutting room machinery, saving both time and costs.

According to Damro's e-commerce practice at present Customers can visit the Damro
website choose a product then add it to the cart after checking its quantity and order
details and finagling providing the shipping and billing information. The customer can
select the services delivery service or the assembly service. Then choose the payment
method and finalize payment. However, for this practice to be efficiently carried out
the old structures must be changed. Therefore the company is going to strengthen its
6
e-commerce practice taking it as a major challenge to compete with big competitors
like IKEA.

With the dream of a completely automated factory in mind, Damro moves forward.
Due to the rapid development of the microelectronics industry in the world, the
number of economically viable applications is increasing day by day. The
contradictions between the capabilities provided by traditional production
technologies and advanced automation technologies are increasing day by day. This
situation was felt very strongly during the Covid period and the company is working
to improve the process measurement equipment. This process control and quality
assurance provide several examples for future automated production stages in the
furniture industry. (Daniel, 1986)

3 Recommendations
3.1Taking advantage of the furniture Rental Market
Just as landlords around the world are now renting out their homes, tenants are also
looking for affordable furniture for households on rent. As a new trend, more and
more people are renting their furniture instead of buying it directly. Several
companies have come forward for this. As a new trend, it is becoming more and more
common for consumers to buy small pieces of furniture that fit into their rented
apartments or flats. This challenge came with Covid and several companies took
advantage. To take advantage of this situation, it is advisable to focus more on the
production of multi-purpose furniture, where furniture makers can add cheap, formal,
or multi-purpose furniture to their inventory to suit these small living spaces.

When considering the size of the rental furnishing market in India it was estimated the
market size is less than Rs 20 billion in 2020. Market researches suggest that this will
increase in the future. at present more and more customers are being converted to this
very efficient method of decorating their homes from time to time the customers can
change the furniture according to their liking. A recent study suggests that 78% of
buyers would love to cross over to rental furnishing than buying the furnishers forever
provided Damro brand could assure the same quality and affordability

3.2 Utilize Virtual Selling Methods

The recent global changes due to pandemics have forced businesses to acknowledge
that they need to adapt to primarily virtual environments created by online
technologies for customer and prospect interactions with them. The challenge lies in
conducting sales interactions as well as face-to-face meetings. (Milner, 2021)

7
Internet retailers have taken a very advantageous position during the Covid period.
They hold a good share of the home market segment. Especially since everyone was
kept at home during the plague. The movement was fast from physical to virtual
platforms. This is due to the increase in online shopping for home furniture makers.
The Internet is the best opportunity to sell their products, as it is not limited to a
physical geographical area.

This is a significant trend among the recent challenges and trends affecting the
furniture manufacturing industry. From now on, the market will change with the
introduction of new technologies around the world. By adopting these solutions and
adapting to those conditions, furniture manufacturers like Damro can position
themselves for success through change.

3.3 Move your customers online

The physical closeness must be evaluated by the company as far as possible while
encouraging the customers to do online shopping. Creating the company’s customer
base who wish to buy online is very important this can be enhanced by providing a
helping hand for those who need assistance.

The first step in doing so would be to remind the customers over and over again that
the company's web store is open for them during the lockdowns and operations. They
must know that despite the physical stores being closed the online stores are
functioning.

So far the company was functioning using the on-the-road sales representative now
they have been converted into online representatives who make calls to customers and
teach them how to set up online accounts. This is something new compared to the
sales representative's typical work.

Navigating the Damro web store and placing orders may be difficult for certain
customers. Therefore the representative must give all the necessary instructions from
the beginning on how to download the apps to the customer's phone or laptop. The
applets and websites must be very user-friendly and error-free so that the customers
are not frustrated in using them regarding online transactions the soft wear must
assure utmost security for the customer's money. the next important action would be
answering the customer complaints regarding the errors and losing money in such
cases the company must refund the money immediately.

8
 Conclusion
In conclusion, when studying the challenges put forward by the pandemic situation in
the world economic downturn, changing the lifestyles of the people, adoption of
electronically based practices like e-commerce and the significant changes of buying
behavior of the customers affected the furniture industry all over the world. When
analyzing the above facts it is evident that some furniture manufacturers could
adroitly make use of these challenges as opportunities to develop. Following their
footsteps, Damro Furniture also carried out research to study the present trends in the
market and position its products strategically to gain a competitive advantage.

Bibliography
Angus, A. (2017). Why Lifestyles Insights Matter for Business Strategy. Retrieved
2022, from EUROMONITOR INTERNATIONAL:
https://www.euromonitor.com/article/why-lifestyles-insights-matter-for-
business-strategy-2

Chaffy, D. (2009). E-Business and e-commerce management. Fourth edition: Prentice

Hall.

Daniel, S. (1986). NEW AUTOMATION TRENDS IN THE FURNITURE

INDUSTRY. 3-4.

Editor. (2022, October 29). Damro further expands showroom Networks in India.
Daly News.

Felsenthal, M. (2020). COVID-19 to Plunge Global Economy into Worst Recession

since World War II. The World Bank.

Friedt, F. (2020). The Impact of COVID-19 on International Trade. MCALESTER.

Harari, D. (2020, October 5). The furniture industry post-COVID-19. LECTRA.

Hayakawa, K. (2021). The impact of COVID-19 on international trade: Evidence

from the first shock. ELSEVIER.

KMPG. (2020). Impact on the overall economy. KMPG Public.

Manzoor, A. (2010). E-Commerce Introduction. Lap Lambert Academic Publishing.

9
McLaughlin, K. (2020). COVID-19: Briefing note. Mc Kinsey & Company.

Milner, M. K. (2021). The Virtual Sales Handbook. WILEY.

Reeves, M. (2019). Harward Business Review. Companies Need to Prepare for the
Next Economic Downturn.

Sachitra, D. Y. (2019). Factors Affecting E-commerce Adoption of Small. Asian

Journal of Advanced Research and Reports.

Schuler, A. T. (2003). identifying Future Competitive Business Strategies for the U.S.
Residential ... USDA Forest Service.

10