As the group considers the next step in ensuring that we know the kind of business that were venturing into, we seek to look at the competition that we face when we go into the business of custom furniture manufacturing. This paper looks that the two major companies in the US that pose stiff competition to the business that were about to set up giving a SWOT analysis of the two and seeing how we can capitalize in order to make our business the one with the difference. These two companies will form the headings of the two sections of this paper.
Ethan Allen Interiors
Ethan Allen Interiors is a company that focusses on the making of furniture based on client demands. Based in Connecticut, the company has been established since 1939 and rebought in the 1980s. However, the company faced tough economic times in 2008 after the decline of the American markets where people were no longer interested in buying home furniture as the market didnt even allow the people to have sufficient money to maintain their homes, let alone have enough for extras. The company nonetheless has managed to stay afloat despite challenges in maintaining its previous hold over the American market (Barris, 2013).
In its strengths, the company can boast of a well-known brand in the American market with relatively cheap prices for their custom-made furniture on their online stores. The company has made use of an online designing platform where the client can come and make their custom design, which will then be delivered to them. The company, being located in the Appalachian Mountains, enjoys a steady supply of raw materials that are readily available for the making of their furniture. Furthermore, these resources are quite vast and this means that the company is always willing to ensure that customers can get their products. They have their plants both in the United States and abroad. The weaknesses however, come in where the brand is unknown to the rest of the world as the cultural value of the company is only known in the US. For the average consumer, hand-crafted furniture is quite expensive (Santos, 2011).
Their opportunities are quite vast especially with their move to expand to Asian markets. There are limited resources in china as opposed to the unlimited supply of raw materials for the company. There are also lowering costs of overseas transportation which comes in their favor. However, the threats faced include cultural barriers, governmental restrictions overseas and global furniture retailers such as IKEA who have lower prices.
IKEA International Group
The IKEA is a Netherlands-based group that deals in both custom-made and general furniture. In its strengths, the company has a wide knowledge base of customer knowledge and is constantly using innovations to drive the costs of its products down. There is a diverse product made by the company and it has quite the reputation globally. The weaknesses, however, is that there has been negative publicity, decreasing quality of the products as well as the production of standard products, rather than the focus on the custom products (The Times 100, 2012).
The opportunities presented with the company is within growing online sales and expansion into developing markets that can see the growth of the company happen exponentially. The threats presented to the company, however, lie with the growing incomes of the market base where customers are less likely to buy cheap products that are lower in quality. There is also intense competition from other service providers who are providing the furniture at similar costs and have the same characteristics that form the strengths of IKEA (IKEA, 2013).
When looking at the state of our competitors, it seems that quality would be lacking in the general overview of the products that IKEA Has to offer. As a result, we could partner with the company to see that the standard view of their clients concerning their furniture is removed. We could also ride on the market dominance that they have b offering new products to their line in the form of custom-made furniture. We could still further work with Ethan Allen especially in their expanding markets to provide a wide range of products that can reflect the different cultural backgrounds that they are venturing into.
BIBLIOGRAPHY Barris, M. (2013). Ethan Allen seeks edge in China with custom furniture. Retrieved from China Daily: http://usa.chinadaily.com.cn/epaper/2013-07/11/content_16762335.htm
IKEA. (2013). About IKEA. Retrieved from IKEA: http://www.ikea.com/ms/en_GB/about_ikea/index.html
Santos, R. (2011). Study: Ethan Allen Interiors and the decision to go global. Retrieved from examiner.com: http://www.examiner.com/article/study-ethan-allen-interiors-and-the-decision-to-go-global
The Times 100. (2012). Business Case Studies. Ikea case study. Retrieved from Business Case Study: http://businesscasestudies.co.uk/ikea/swot-analysis-and-sustainable-business-planning/strengths.html#axzz2VB9TPpjz
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