Reference no: EM131702000
Divine Furniture Manufacturing Company
The Divine Furniture Manufacturing Company has been in business selling a broad range of Office furniture since 1984. They focus mainly on high end desks and wall cabinets with prices ranging from $2,000.00 to $4,000.00 per executive “CEO” desks to $3,000.00 to $6,000.00 per “CEO” cabinet. While the early years were a little slow; sales increased slowly with the company starting to show a profit after the 5th year. In the past 5 years sales had started to increase substantially with the “CEO” line being recognized in the industry as being of high quality material and workmanship. Sales are made across Canada with the majority of sales being in Ontario and Vancouver. Sales were starting to pick up in Quebec and there for Divine had recently added French speaking staff to the sales and ordering dept. He has also made a number of large sales to U.S. customers through a U.S. Distributor who has been very difficult to work with.
Divine based their selling process on personal selling with strategically located showrooms across Canada. In all there were currently 22 showrooms staffed by full time and part time employees. The Divine Furniture Manufacturing Co. believed in providing strong support for their product and any questions or problems with their furniture was quickly dealt with to the benefit of the customer.
The production of the furniture was operating about 100% of capacity with the warehouse having about 6 months of seasoned pine and oak wood available. Contracts for a supply of wood were always negotiated 2 years ahead to ensure quality seasoned wood was in the supply chain. His financial position is strong, but he would need to finance any international activity and/or if he planned to expand domestic production.
Mr. Divine, the owner, felt that it was time to look at international markets for their furniture, especially since a number of furniture manufacturers from other countries such as China and Germany were starting to make inroads into Canada and the market here was becoming too competitive. To stay alive in the long run he needs new export markets, he need to reevaluate and perhaps reposition how he is doing business in the domestic market, and he has to look at business opportunities from a global perspective. He had also been aware that the Canadian Government was urging Canadian manufacturers to become more active in exporting; although the Canadian dollar was very near par until the current financial crises.
Your job as an international trade consultant is to advise Mr. Divine as he faces the situation he is in. Status Quo or sitting idle is not an option according to Mr. Divine. He wants to go international and wishes to take his furniture to Europe. However, Divine does not want to use an agent, or a distributor because of his negative experience in the U.S., and he knows he wants to stay away from licensing because furniture is so easily copied. Work through the case using the methodology we have studied and present him with a case analysis worthy of your $10,000 contract fee. Unfortunately, Mr. Divine will be “out of touch” while you are preparing this document, so you will have to research the Canadian industry without him so you understand the situation the industry finds itself in.
Cases should be completed with the following elements included:
1. Executive Summary
2. Situation Analysis
3. Assumptions
4. Core Problem
5. Evaluative Criteria
6. Alternatives & Analysis of Alternatives
7. Decision and Justification
8. Implementation
9. Bibliography & Appendices