FCAE

Arte Casa- Final project

Corporate Strategy

By:

Emily Hernandez Savala

Laleska Michell Mendez

Narcy Maria Aragón

Julissa Karina Zeledón

Melissa Mendieta Morales

Teacher:

Enrique Cordero

Date:

November 30, 2022

Content

1. Description of the company…………………………………………………..4

2. Mission and Vision Statement
Questions of the Mission statement……………….………………………………………..5
Mission Statement………………………………………………………………………..…6
Vision Statement…………………………………………………………………………….6
Values……………………………………………………..………………………...……… 6
Objectives…………………………………..……………………………………………….. 7

3. External Analysis
External analysis
definition……………………………………………………………………………………7
PESTE……………………………………………………………..………………………. 8
Porter’s Five Forces…………………………………………….………………………….. 11

4. Internal Analysis
Internal analysis
definition……………………………………………………………………….………….13
Swot………………………………………………………………………………………..13
Value Chain analysis ……………….…………………………………….………………. 15
Three Circles Analysis………………….……….………………………….…………….. 16
Grand strategy selection matrix……………………………………………………………18
Organizational structure……………………………………………………………………19
Bibliography………………………………………………………………………………..21

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 1. DESCRIPTION OF THE COMPANY

We are a company member of the Khatib Group that represents leading companies
worldwide, specialized in the furnishing of interior and exterior spaces that is distinguished
by continuous innovation in designs and finishes. Our products satisfy the needs of clients
who aspire for a personalized and unique result. Some of the companies we work are:

- Viking is part of Middleby Corporation, the largest manufacturer of commercial

kitchen equipment in the world.
- Docol is the leading Brazilian brand in the taps, valves, mixers and showers
market since 1956. Docol products are subjected to international tests and
standards, which makes the quality of the brand recognized throughout the
national territory and in more than 40 countries.
- DURAVIT It is a German company founded in 1817 whose philosophy is that the
bathroom becomes more and more a space for stay and relaxation. For this reason,
much more is expected of him than just taking a bath, washing or showering.
Duravit designs and manufactures specialized products to guarantee comfort in
this space.
- Sonos, Inc. is an American developer and manufacturer of high-quality audio
products best known for its multi-room audio products.
- ARRITAL S.P.A. Arrital S.p.a. Since 1979, he has been manufacturing designer
kitchens in Fontanafreda, Italy. It made its debut on the world market with the
production of kitchens appreciated from the beginning for the attention to detail
and the choice and quality of materials.
- Nidi is a modern concept of children's and youth furniture for the bedroom and
study area by the company Battistella – Italy founded in 1953 whose fundamental
pillars are innovation, creativity, quality, technology and service.
- Altamarea, Bath Boutique. Altamarea stands out in the national and international
market for its production of Italian design bathroom furniture.
- TRIBE It is a Belgian family business founded in 1924 and is currently
internationally recognized as a company that creates discreet luxury and
exclusivity for terraces and gardens. For Tribú, luxury is: Contemporary, Discreet
and Sober.
- Lynx is the leading manufacturer of outdoor kitchen appliances. Valuing
dedication, craftsmanship and innovation in each of the products they offer.
Founded in California, United States in 1996.

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 2. MISSION AND VISION STATEMENT

Why is this firm in business?

Due to the way it has been developed for years, it is profitable and viable, thanks to the
excellent prices, the quality and the experience that the business is willing to give its
customers, as its value proposition.

What are your economic goals?

● To have more earnings.

● Have a higher percentage of sales.

● Improve margins, by reducing our cost of production and overhead expenses.

What is your operating philosophy in terms of: quality, company image, and
self-concept?

The owners believe that quality is essential to gain the loyalty of customers and therefore,
offer a reliable image of being transparent with customers that want to create their home with
great quality and great customer service.

Quality: Keep improving the quality of our products and services to become one of the best
workshops in the city.

Company image: We are committed to our community and we want to be socially responsible
with the environment.

Self-concept: We want to create a healthy and trustful environment for our customers by
offering top-quality products and service to make a pleasant experience.

What are your competencies and competitive advantages?

Competencies: Time distribution for orders for each customer, personalized attention no
details for each order, social media presence.

Competitive advantages: Customer service, skilled and certified labor.

What do customers need and what can you do to satisfy their needs?

Customers need innovative designs, so we make sure we are up to date to tendencies in the
design world, and offer the best we can.

How do you view your responsibilities with your employees, communities, environment,
social issues and competitors?

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We view employees as part of our family, that creates and brings a great service to customers,
as for our environment and social issues we are aware of the situation surrounding our
country so we try to make the prices on our products to be affordable, with our competitors
we try to make a difference by being more personal with the customer service and being as
transparent and friendly with them as well as working with social media presence.

Mission Statement:

Build a strong Company in the field of design, manufacture and restoration of furniture.
Offering our customers the best materials and workmanship and a fair price, thus
guaranteeing their satisfaction, which is also ours.

Vision statement:

Being a leading company with a pronounced growth in our service areas such as design,
manufacturing and restoration. Always taking care of our company values and our
stakeholders.

Values:

Honesty: We promote honesty in Arte Casa because we believe that is one of the most
important values, we want to create trust for our clients to feel safe and that they can count on
us and our remarkable work.

Integrity: We believe in doing what is right, that is why our clients keep coming back to us
because we always create an environment of trust and hardwork.

Respect: We believe in treating our clients with the respect they deserve, making sure
everyone that comes in contact with our business feels welcomed and satisfied with our
products and services.

Fairness: We commit ourselves to work together in making our brand one of the best, setting
the right amount prices for our products and services.

Accountability: We work as a team at all levels, recognizing the opinions given by our
clients and trying to improve in everything we do.

Dedication: We commit our best in everything we do, striving for professional excellence by
expectations and distinguishing ourselves through superior performance.

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 Objectives:

Short-term objectives:

1. Implement an annual production chain model by the production department, which

will be oriented towards highly profitable market niches, covering most of the
consumer market in office products and accessories and all types of space.
2. Increase 30% of the sales, by our sales team, in our products and obtain the best
profits and benefit of our clients and the company in the next semester.
3. Create a contact center in ten months, with a high capacity to answer our clients
through calls.

Long-term objectives:

1. Consolidate ourselves as the first in the market for office furniture and accessories, all
types of space in Managua, and increase the sales volume between the past year.
2. Integrate a team capable of facing adversity and providing the best service to our
clients.

2. EXTERNAL ANALYSIS

The external analysis evaluates the business environment, it analyzes the industry
environment of a company, including external forces that might affect the business’
operations. It is important to perform an external analysis to constantly assess
opportunities and challenges that an organization is facing. The firm’s external
environment comprises three components: the remote environment, the industry
environment and the operating environment.

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 The remote environment embraces economic, social, political, technological and
ecological factors that would affect any operating situation of the firm. On the other hand,
the industry environment is related to the strategic thoughts and business planning,
evaluating the buyer’s and supplier’s behavior, as well as the competition, entry barriers
and the substitute products of a business. Furthermore, the operating environment, also
known as the task environment, includes the competitors’ positions, customers profiling
and HRM.

2.1. PESTE ANALYSIS

The PESTE analysis is a tool to evaluate the industry environment. PESTE stands for
Political, Economic, Social, Technological and Ecological, which are the different factors that
are measured, in order to recognize the opportunities or threats in those areas.

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Political factors
● No benefits:
There are no specific political benefits for this type of industry. We might understand
that the government usually provides companies with the necessary benefits and
resources to grow faster or to ensure profitability, which is not the case for this
industry in Nicaragua.
● Law #237:
There exists a law that regulates this type of industry, which is the 237, and it asks for
a license in order to perform in this area. It is a requirement that makes this industry
less competitive and more exclusive.
● No advantages in imports:
There does not exist a grant for the imports of furniture related to the government that
could help the company and industry to boost their profit while making imports to the
country in order to have more exclusivity with its furniture and products.

Economics
● Dollarization:
High level of dollarization and consequent vulnerability of the financial system. But
creates a positive investor sentiment, almost extinguishing speculative attacks on the
local currency and the exchange rate.
● Real Interest
High active short-term real interest, rates term, reflecting the high spread in the short
term.
● Exchange rate
The exchange rate is one of the elements that affects the imports and sales in
Nicaragua's economy.

Social
● Social Change
There exists a high demand for social change in perspectives such as the minimalist
style.
● Not affordable
As in Nicaragua most of the people cannot afford this service because of their lack of
incomes.
● Young people
According to certified data, the majority of people in Nicaragua are young people, and
this can affect this type of business.

Technology
● New tech
Modern architecture and design feed on many technologies , reflected in 2D, 3D,
BIM, virtual applications.

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 ● Smart elements
Elements such as lights, smart furnitures, coating and more can boost the industry.
● Materials
Special equipments that provide innovation through pieces of materials such as
carbon fiber

Ecology
● Natural elements
There are a lot of ecological materials such as stones, woods, metals, paints, and
natural pigments.
● Energy efficiency
This industry provides a reduction of greenhouse gasses in the uses of inverter
furnitures and brings to the users new ways of reducing the energy consumption.
● Waste reduction
This industry believes in re-use, and to make functional things that are old-fashioned,
which can also be known as “vintage”. Which demonstrates that everything can be
improved.

OPPORTUNITIES THREATS

Majority of people in Nic are young No political benefits

2D, 3D, BIM virtual apps License is requested

Smart elements in designing There are not any grants for imports

Special equipments and technologies High level of dollarization

Ecological Materials It is not affordable for most of the people in

Nic

Energy Efficiency

Waste Reduction

Social perspectives is changing

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 2.2. PORTER’S FIVE FORCES

The five forces of Porter is a framework that analyzes the competitive forces in an industry,
allowing the business to anticipate competition adjustments, influencing the evolution of
industry structure, and identifying advantages in the strategic positions. These five forces are:
Rivalry, New entrants into the industry, Power of suppliers, Power of buyers and the
substitute products.

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Rivalry

The power of rivalry in Nicaragua is low, here in Nicaragua the competitors are 3 and 1 of the
closest is Modernica but however Modernica is not completely competitive with the customer
service experience, the difference with the rivals is the brand Arte casa sell

● Switching cost: the cost for one of the products from worldwide brands is high but the
cx has guaranty of the products and the quality is better and higher from traditional
brands
● Products differences: products meet the needs of customers who aspire to a
personalized result by the company helping them to create the space
● Brand identity is the sophistication and luxury

New entrance

The threats of new entrants in the industry in Nicaragua are low

● They are exclusive distributors of leading brands worldwide,

● The economy scale of the company is big because they are part of a big group that has
companies in different industries so they can face any economic situation,
● The brand identity is the sophistication and luxury that the products have

Suppliers

The power of negotiation from the suppliers is high because they are exclusive distributors
for some brands here in Nicaragua and suppliers can demand premium prices,

● Suppliers concentration: the supplier are from U.S and Italy, the concentration is low
because the export from different suppliers on different products
● Importance of the volume to suppliers: the volume that they manage is medium they
keep inventory of the most selling items and in some cases, some are exported only by
request
● Differentiation of inputs: different suppliers provide different input characteristics

Buyers

Customers have a low power of negotiation because they don’t have a significant impact on
prices

● Buyers volume: the percentage that can afford this product are most likely the 15% of
the population in this country
● Impact of quality: the brand that the company sell are known because of their quality
and performance and most of the customers have used before the brand or has
knowledge about them

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 ● Products differences: products meet the needs of customers who aspire

Substitutes

The threat of substitutes is medium

● Buyer propensity to substitute: the products that the company sell are in the customer
daily basis for cooking, showering, and etc,
● Relative price: however, you can get the product but with a low quality and cost in
another brand
● Switching cost: the cost for one of the products from worldwide brands is high but the
cx has guaranty of the products and the quality is better and higher from traditional
brands

3. INTERNAL ANALYSIS

The internal analysis is a study that focuses on evaluating all the aspects of the
organization itself, helping us to identify the strong and weak points of the company. There
are some tools that analyze all these internal factors, such as the SWOT analysis, Value chain
analysis and the Three circles analysis.

3.1. SWOT

The SWOT analysis identifies the strengths, weaknesses, opportunities and threats
that are present in a company. It is a way to find out how to grow as a business and where the
company is vulnerable.

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Strengths Weaknesses
● Innovative product designs ● Weak advertising and
● Big range of products marketing campaign
● Technological development in our products ● High transportation costs
● Product and material variety ● Only one location
● Strong financial position since it’s a member ● Weak customer service
of the Khatib group ● Lack of an organized training
● Customized service during and after the sale program for the employees

Threats
Opportunities
● Partnership with different worldwide brands ● Alternatives with lower costs
● Imports directly from the country of origin, ● Competitors offering similar
without any intermediate designs
● Growing community of loyal customers ● Delays of products from some
● Use ecological material countries Not affordable for
most of the people of the
country

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3.2. VALUE CHAIN
The Value chain analysis describes the way that a business produces and delivers a product
based on the customer needs, it is a chain of activities that transform inputs into outputs that
customers value.

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 3.3. THREE CIRCLES ANALYSIS
The three-circle analysis is a tool where strategists examine customer’s needs, company
offerings, and competitor’s offerings to more clearly articulate what their company’s
competitive advantage is and how it differs from those other competitors.

Area A:
This first area presents the advantages that our company has and are fulfilling our customers’
needs. Arte Casa offers a customized service post-sale to our clients in order to give them a
personalized experience. Also, we train our customers and teach them how to maximize the
product’s potential. Furthermore, every time we have new collections, we perform a live
show presenting our products.
Area B:
This area shows the things that both the competitors and I offer meeting our customers' needs.
Our company, as well as some other furniture companies, offer modern and high quality
designs. On the other hand, companies such as Modernika, which sells brazilian products,
imports innovative furniture from Brazil, as we also do.

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Area C:
This third area is about our disadvantages, things that the competition offers and the clients
like, but we don’t. Modernika uses a Computer Aided-Design program to help clients
visualize modifications on the designs. They also provide wood and fabric samples, as well as
a well designed, organized and updated catalog for the customers.
Area D:
This area represents the things that both our company and the competition offer, but the client
does not want. For instance, the competition also offers imported furniture, so all these
products have higher prices, and in some cases this is one of the main factors when buying
something.
Area E:
This area explains how the company works and what benefits they offer to their customers
but have many weaknesses and the competition offers or have a lot of control, the care and
maintenance of each product to achieve a successful delivery and what are the services and
products they offer.
The company offers furniture of many companies from different countries and with good
design and material, also offers a high range of prices and offers home delivery.
Area F:
The competition has the facility to source their products from Nicaragua with a slightly more
complete fabrication, they use a variety of woods, laminates and other materials to design,
build, make and repair cabinets, chairs, tables, closets, dressers and any other similar objects.
They also restore antique furniture pieces.
Area G:
In this area we present many of the designs that are in the store and are innovative to facilitate
the spaces being elegant and functional, having prices accessible to all types of customers and
with many types of guarantees.

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4. GRAND STRATEGY SELECTION MATRIX

The Grand strategy selection matrix consists in a four-cell guide that contains two
essential variables in the selection process: The principal purpose of the grand strategy and
The choice of an internal or external emphasis for growth and profitability.

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5. ORGANIZATIONAL STRUCTURE

A functional structure is a type of business structure that organizes a company into different
departments based on areas of expertise. These departments serve as functional units and are
overseen by functional managers or department heads. In each department, team members
report up the chain of command to department heads, who in turn report to the company's top
management, apprising them on the status of their functional areas.

Examples of departments in a functional organization structure include a sales department, a

production department, a human resources department, an information technology
department, a marketing department, and a legal department. In some large corporations,
these departments are stratified into different geographical areas. In smaller companies, they
may simply occupy different areas of the same office building.

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Bibliography
• Chapter 1: Strategic Management. pdf
• Chapter 2, Company Mission.pdf
• Chapter 4, External Analysis.pdf
• Information given by the company
• Jarquín, M. C., Prado, A. M., & Marin, B. G. (2020). Nicaragua's response to
COVID-19-Authors' reply. The Lancet Global Health, 8(7), e899.
• Coulter, M. K., & Coulter, M. K. (2008). Strategic management in action.
• Ritson, N. (2008). Strategic management. BookBoon.
• Anokhina, M. E., Maksimov, M. I., & Seredina, N. S. (2019). A guide to contemporary
strategic analysis.
• Combs, J. G., Crook, T. R., & Shook, C. L. (2005). The dimensionality of organizational
performance and its implications for strategic management
research. In Research methodology in strategy and management. Emerald
Group Publishing Limited.
• WageIndicator. (2019 ). Minimum Wage - Nicaragua . Retrieved from
WageIndicator.org
https://wageindicator.org/salary/minimum-wage nicaragua

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