A Case Study and Analysis of Brothers Furniture Ltd.

W650: Business Strategy

Submitted to:

Dr. A. K. M. Saiful Majid Professor

IBA, University of Dhaka

Prepared by:

Abid Al Reza (Roll: 05) Asifur Rahman (Roll: 17)

Fahim Alam (Roll: 53) MBA Batch: 48D

Institute of Business Administration University of Dhaka

March 23, 2014

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March 29, 2014

Dr. A. K. M. Saiful Majid

Professor, Institute of Business Administration

University of Dhaka

Dear Sir,

Re: Submission of Report.

With due respect it is our pleasure to present the term paper entitled A Case Study and Analysis of

Brothers Furniture Ltd. as part of our course requirement. This report was extremely interesting to

work at as it gave me the opportunity to have a detailed perception of the current situation of the

furniture industry in Bangladesh.

The report mainly revolves around the SWOT, PESTEL & Porters Five Force Model Analysis of Brothers

Furniture Ltd. These analyses helped us to identify several external and internal factors that affect the

overall business strategy. And in respect to Brothers Furniture Ltd, we were able to learn the way of

utilizing several business analysis tools and the present standpoint of this company.

We would like to take this opportunity to thank you for helping us immensely in every possible way to

get this report prepared. We have completed this report with our utmost sincerity and hope that you

will appreciate this endeavor. However, if any explaining is required, we would be available to answer

any question for clarification.

Sincerely,

Abid Al Reza (Roll: 05) Asifur Rahman (Roll: 17) Fahim Alam (Roll: 53) Batch--48d

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Contents

1. Introduction: ................................................................................................................................... 1

1.1. Brothers Furniture ltd. ............................................................................................................ 1

2. Origin: .............................................................................................................................................. 1

3. Methodology: .................................................................................................................................. 2

3.1. Data Sources: .......................................................................................................................... 2

3.2. Objective: ................................................................................................................................ 2

3.3. Scope: ...................................................................................................................................... 2

3.4. Limitations of the Proceedings: .............................................................................................. 3

4. Strategic Analysis of Brothers Furniture ltd. : ................................................................................. 4

4.1. PESTEL Analysis: ...................................................................................................................... 4

4.1.1. Political: ........................................................................................................................... 4

4.1.2. Economical: ..................................................................................................................... 5

4.1.3. Sociological:..................................................................................................................... 9

4.1.4. Technological: ............................................................................................................... 10

4.1.5. Environmental: .............................................................................................................. 11

4.1.6. Legal: ............................................................................................................................. 11

4.2. Porters Five Forces Analysis: ................................................................................................ 11

4.2.1. Intensity of Competitive rivalry: ................................................................................... 12

4.2.2. Threat of new entrants: ................................................................................................ 12

4.2.3. Threat of substitute products or services: .................................................................... 13

4.2.4. Bargaining power of suppliers: ..................................................................................... 13

4.2.5. Bargaining power of customers: ................................................................................... 13

4.3. SWOT Analysis: ..................................................................................................................... 14

4.3.1. Strengths: ...................................................................................................................... 14

4.3.2. Weakness: ..................................................................................................................... 15

4.3.3. Opportunities: ............................................................................................................... 15

4.3.4. Threats: ......................................................................................................................... 15

5. Conclusion: .................................................................................................................................... 16

6. References ...................................................................................................................................... A

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List of Figures:

Figure 1: Macro environment forces affecting a firm (PESTEL forces) ................................................... 4

Figure 2: GDP growth of Bangladesh ...................................................................................................... 5

Figure 3: Inflation in Bangladesh economy ............................................................................................. 6

Figure 4: Exchange rates of Taka in terms of USD .................................................................................. 6

Figure 5: BANGLADESH DISPOSABLE PERSONAL INCOME ...................................................................... 7

Figure 6: Consumption Growth in last ten years in Bangladesh ............................................................. 7

Figure 7: consumer Price Index: National ............................................................................................... 8

Figure 8: BANGLADESH PERSONAL SAVINGS ........................................................................................ 10

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Executive Summary:

The Brothers Furniture Ltd was established in 1985. The company manufactures wooden furniture

and machine made wooden door, doorframe, stair rail, molding bit, wooden floor, kitchen cabinet etc.

The Brothers Furniture Ltd has good technical skills and marketing experiences that have been praised

in different international trade fairs at home and abroad.

The PESTEL analysis conducted on the furniture industry reveals that irrespective of some minor

complications the political, economic, social, technological, environmental and legal condition for this

industry is favorable. And these facts are supporting the growth of this industry.

According to the porter's five forces analysis, the threat of substitute products, the threat of new

entrants and the bargaining power of both the buyers & suppliers are less. But "Brothers Furniture

ltd." is facing a high risk rivalry from Hatil furniture ltd. and Akhtar Furniture ltd.

From SWOT analysis it was observed that, Brothers Furniture ltd." is holding a good position in the

market. But it has some weaknesses that may prove fatal in the future. But if the company utilizes the

opportunities and remain aware of the potential threat, it will not just survive, it can become one of

the market leaders in the industry.

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1. Introduction: The furniture industry is one of the most potential sectors in Bangladesh and the overall condition of

the sector is very good in recent years. Local furniture manufacturers are meeting a huge local demand

while the upper section of society is also having access to imported furniture. Fortunately, the local

companies have the lions share of the market. After meeting the local demand, furniture industry

moves forward and is concentrating on exporting furniture to neighboring countries specially India.

There are 5,000 registered furniture houses in the country, according to the Bangladesh Furniture

Association. Almost 99 per cent of them are non-brand operators. There are about 72,000 enterprises

present in the furniture industry of Bangladesh and the total market share held by these organizations

is about 66.65 percent. The domestic furniture market is worth an estimated 67 Billion BDT and

growing at a rate of 19% yearly. And the countrys total furniture export was only 4.3 Million USD in

the fiscal year (2011-2012). (PKF, Accountants and business advisors, January 2013)

1.1. Brothers Furniture ltd. Brothers Furniture Ltd. is a renowned name in the furniture industry of Bangladesh. This company was

established in 1985. The company specializes in wooden doors and wooden furniture. It has been

operating for about past three decades. By this time this company has gained reputation for superior

quality, craftsmanship and post purchase services. The Brothers Furniture Ltd has good technical skills

and marketing experiences that have been praised in different international trade fairs at home and

abroad. As a result sophisticated machines and technology have been introduced in Horindhora,

heymaytpur, saver factory to cope with the demand of the customers.

The production coordinators of this company strive to have a quality product produced in a timely and

efficient manner. In the unlikely event a defect is found, complete customer satisfaction in quality and

workmanship is guaranteed. The Increasing demand for wooden home and office furniture and

machine made wooden door, door frame, stair rail, molding bit, wooden floor, kitchen cabinet etc.

made them ahead than the stream line companies.

The yearly turnover of this company is about 5.2 million USD. And company employs over 150 full-

time employees. (Brothers Furniture ltd., 2014)

2. Origin:

This report titled as A Case Study and Analysis of Brothers Furniture Ltd. has been assigned by Dr. A.

K. M. Saiful Majid, Course Instructor, as a partial requirement of the course Business Strategy (W650).

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3. Methodology:

3.1. Data Sources: A combination of both primary and secondary was pursued to conduct the aforementioned analysis.

Primary data was mostly extracted from answers of questionnaire surveys with various personnel

from Brothers Furniture Ltd. Secondary data was extracted from sources such as- reputed dailies (The

Daily Star, The Financial Express, Prothom Alo), websites of Bangladesh Bank, Bangladesh Bureau of

Statistics, National Board Of Revenue, Ministry of Environment and Forest, Board of Investment

Bangladesh etc. and other statistical figures available from previous published credible market

researches available on the web.

3.2. Objective: The primary intention was to conduct a thorough strategic analysis on Brothers Furniture Ltd. using

broadly accepted analytical tools such as -

PESTEL Analysis

Porter's Five Forces Analysis

SWOT Analysis

3.3. Scope: This strategic analysis task given to us regarding Brothers Furniture Ltd. rewarded us with the

following opportunities:

To get a brief overview of the furniture industry of Bangladesh.

To identify the external and internal factors of macro and micro environment that has effect

on a furniture manufacturing company.

To make a qualitative evaluation of a firm's strategic position in the industry.

To identify the internal and external factors that are favorable and unfavorable to achieve the

stated objectives of Brothers Furniture Ltd.

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3.4. Limitations of the Proceedings:

Limitations that were confronted while preparing this report are as following-

Inadequate primary data due to improper response of personnel of the concerned

organization

Insufficient source of secondary data

Absent of explicit legislative statements regarding various facts in various legal acts

The analytical remarks were influenced greatly by the subjective judgments of the participants

of this report.

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4. Strategic Analysis of Brothers Furniture ltd. :

4.1. PESTEL Analysis: PESTEL analysis is a simple and effective tool used in situation analysis to identify the key external

(macro environment level) forces that might affect an organization. These forces can create both

opportunities and threats for an organization. Therefore, the aim of doing PESTEL analysis is to:

Find out the current external factors affecting an organization;

Identify the external factors that may change in the future;

To exploit the changes (opportunities) or defend against them (threats) better than

competitors would do.

Figure 1: Macro environment forces affecting a firm (PESTEL forces)

PESTEL analysis of furniture industry of Bangladesh gave us the following proceedings:

4.1.1. Political:

4.1.1.1. Political Instability:

If we go through the political condition of Bangladesh, we will see that from 1991 to 2013, none of the

major parties were able to hold the government position for more than one term continuously. There

is a shift, none of the parties were capable to meeting the expectation of the public. Also they were

unable to mitigate the conflict between them, so they intentionally or unintentionally made it worse.

The people of the country are accustomed with increased unstable political condition during the

elections. Moreover, other issues like conflict over caretaker government, the assassination attempt

of Awami League chairperson Sheikh Hasina on 11 January, 2007 and a more pressing concern

regarding the several terrorists groups have been key disturbing factors making the political condition

of Bangladesh extremely unpredictable and unstable. And this increased political instability is a bad

influencer for the economy and the furniture industry of our country is also affected by it.

4.1.1.2. Government Policies Concerning the Furniture Industry:

In the budget speech of FY 2011-12, the finance minister addressed an increase in supplementary duty

on imported furniture from 20 to 30 percent to aid in proliferation of emerging local furniture industry.

Additionally, the Finance minister also proposed a withdrawal of regulatory duty of 5 percent on

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import particle boards and MDF boards to make quality materials cost effective. (EU inspired program,

January 2013)

But there are some other conditions that are holding back the furniture industry like, import duty on

raw materials required by furniture industry ranges from 10.72 to 92.30%, an average of more than

50% which is far above than any other competing countries (Daily Prothom-alo, 2011).

So in summary it can be said that the political factors are affecting the furniture industry mostly in a

negative way, although there are some approaches by the government to help it.

4.1.2. Economical:

4.1.2.1. GDP growth:

The GDP growth of Bangladesh is a bit unpredictable, it has experienced many ups and downs since

2005. GDP shows a cyclic up and down mostly due to cyclic political instability.

Figure 2: GDP growth of Bangladesh

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4.1.2.2. Inflation:

The Bangladesh economy is experiencing a continuous rise in inflation.

Figure 3: Inflation in Bangladesh economy

4.1.2.3. Exchange Rates

Value of Taka against US Dollars has decreased. Thus favouring the export of furniture but badly

hampering the import of raw materials for production which has experienced increase in import duty

for this.

Figure 4: Exchange rates of Taka in terms of USD

(Source: Ministry of Finance Bangladesh)

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4.1.2.4. Disposable income

Disposable Personal Income in Bangladesh increased to 31079.56 BDT THO in 2013 from 29606.81

BDT THO in 2012. Disposable Personal Income in Bangladesh averaged 18543.01 BDT THO from 1990

until 2013, reaching an all-time high of 31079.56 BDT THO in 2013 and a record low of 6808 BDT THO

in 1990.

Figure 5: BANGLADESH DISPOSABLE PERSONAL INCOME

4.1.2.5. Consumption level:

For the last twelve years, on an average, the growth rate of consumption was 9.29 per cent from 2000-

01 to 2005-06, it had a rapid increase of 47.44 per cent and the growth rate at present is 13.70 per

cent.

Figure 6: Consumption Growth in last ten years in Bangladesh

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4.1.2.6. Spending on furniture

According to a Household Income and Expenditure Survey of 2005, the domestic consumption growth

rate is around 20%. (Katalyst)

4.1.2.7. Sales Volume of the Furniture Industry

The total sales volume of furniture industry is around 100billion BDT annually.

Table 1: Average Annual sales and profit among different classes of furniture manufacturer

Firm size Numbers of

Enterprise

Average Annual Sales

(BDT)

Gross Profit

(%)

Net Profit (%)

Micro 7,961 1,877,400 21.6 9.87

Small 1,676 5,118,333 25.74 12.41

MSM 2 276 8,571,429 29.67 14.67

MSM 1 40 19,350,000 32.10 15.1

Large 35 104,100,000 35.80 15.8

(Source: Bangladesh Economy Website, https://bdbanijjo.wordpress.com/tag/industry-of-bangladesh)

4.1.2.8. Consumer Price Index on furniture:

Inflation has increased over the years resulting in Consumer Price Index (CPI) of Furniture increase

more than double since 1995-96 and depicts increased product price

Figure 7: consumer Price Index: National

(Source: Bangladesh Bureau of Statistics)

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4.1.2.9. Labor Cost:

Labor cost in furniture manufacturing is comparatively low than those of competitor countries

exporting furniture. In all the other contemporary Asian furniture exporting nations (China, Vietnam,

Thailand, Malaysia), the cost of labor is either equal to or more than USD 120 per month whereas in

Bangladesh it ranges from USD 37-120 per month.

Here, the hourly wage rate in furniture is between $ 0.06- 0.40, less than in China ($0.50- 0.75) which

is the largest furniture exporting country. (EU inspired program, January 2013)

In short, the economic condition of Bangladesh is mostly favourable for the growth of furniture

industry in our country.

4.1.3. Sociological:

4.1.3.1. Changes in Family Size:

The average household size in Bangladesh is 4.4 persons per family, down from 4.8 in 2001 and 5.5 in 1991. Clearly this statistic indicates an increase in the number of family sizes and households, resulting mostly due to urbanization. (Source: The Daily Star, The Financial Express)

4.1.3.2. Attitudes towards Product Quality and Service:

Along with rapid urbanization, increase in awareness and changes in lifestyle from united and

conventional families to fragmented and professional families, peoples' attitude towards commodities

has also changed. Preference towards sustainable products has noticeably increased due to lack of

spare time for thorough self-inspection in product purchasing.

Also inclination towards congenial and sincere customer service has grown vastly due to competitive

and strenuous urban lifestyle which allows minimal time in elsewhere engagements.

4.1.3.3. Personal Savings:

Personal Savings in Bangladesh increased to 1771.53 BDT Billion in the fiscal year 2011/2012 from

1536.82 BDT Billion in the fiscal year 2010/2011. From 1994 until 2012, Bangladesh Personal Savings

averaged 726.9 BDT Billion reaching an all-time high of 1771.5 BDT Billion in June of 2012 and a record

low of 177.4 BDT Billion in June of 1994.

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Figure 8: BANGLADESH PERSONAL SAVINGS

In summary, it can be said that, increase in family number, increased personal income has increased

the market size for this industry. And the attitude towards superior Product Quality & Service has

provided a positive sociological support for the furniture industry of Bangladesh.

4.1.4. Technological:

4.1.4.1. Technological Shifts in the furniture industry:

Traditionally furniture in Bangladesh developed as cottage based industry. It is in early 90's when the

furniture industry in Bangladesh transformed from cottage based industry to mechanized mass

production oriented industries. Since then furniture businesses began to grow with modern

machinery, innovative designs and use of diverse materials.

Now-a-days, the main varieties of products are wood, processed wood & Medium Density Fibre board

(MDF), and laminated board, particleboard, rattan/bamboo and wrought iron furniture. For a more

personal domain as ones home, the preferred raw materials still remains solid wood, but combination

of solid wood with other materials like cane, rattan, laminated boards, plywood and MDF are

becoming very popular. But for offices furniture designs are usually focused on the more

contemporary style and the preferred use of materials include plastic, MDF, laminated boards and

wrought irons.

The typical portfolio of products of this industry present in recent times:

o Wooden

o Melamine Laminated Chip Board

o MDF

o Cane and Metal furniture

o Upholstery (Tubular Metal) furniture, etc. (Bangladesh Economy Website, 2014)

4.1.4.2. Accessibility to Raw Materials:

About 60% of raw materials of furniture sector are imported from different countries. Around 65% of

wood comes through import. Most of the tic, gamar and hard wood come from Africa; oak wood and

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barmatic wood come from Myanmar. Around 100% of Wood coating and lock, 60% of ply board, 20%

of particle board, 50% of adhesive is imported. (Bangladesh Economy Website, 2014)

In short, incorporation of newer technology has increased the product diversity of modern furniture

market. Newer products have increased the market size and transaction. Also creating differentiation

among big and small enterprises.

4.1.5. Environmental: Due to an increase in awareness, a shift in trend of furniture purchasing is taking place gradually. And

due to mass campaign against forestry consumption, presentation of consequences of global warming

and other reinforcement properties of natural forestry, consumer preference is being shifted gradually

toward metal and plastic furniture. As a result, we see a vast diversity in product categories of

furniture manufacturers and changing demands. This change is mostly visible amongst middle- higher

middle class urban population, but steadily it's expanding towards the higher end urban dwellers and

rural masses.

Although preference of cheaper products has raised the opportunity of small businesses to gain

market more than before, the bigger ones still benefit from the ability of larger product volume and

reduced price.

4.1.6. Legal: The existing Bangladeshi legislation in this area, however, dates mostly from the period of British rule.

The legislation in force are as follows:

Patent and Design Act of 1911

Patent and Design Rule of 1933

Trademark Act of 1940

Copyright Act of 1999

4.2. Porters Five Forces Analysis: Named after Michael E. Porter, this model identifies and analyses 5 competitive forces that shape

every industry, and helps determine an industry's weaknesses and strengths. Three of Porter's five

forces refer to competition from external sources. The remainders are internal threats. Porter referred

to these forces as the micro environment, to contrast it with the more general term macro

environment.

Porter's five forces include - three forces from 'horizontal' competition:

Threat of new entrants

Threat of substitute products or services

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Intensity of competitive rivalry

And two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining

power of customers.

Bargaining power of customers

Bargaining power of suppliers

The porters five forces analysis for Brothers Furniture Ltd. gave us the following results,

4.2.1. Intensity of Competitive rivalry: Rivalry among existing Firms in the furniture industry is intensified by the following factors:

It is noteworthy that Akhtar, the one of the main rivals to Brothers came earlier (1976) in the

market. As a result, rivalry is intensified among the established firms because of Brotherss

creating the risk of potential entrant. And Hatil Furniture Ltd. was established in 1989.

The least intense rivalry will prevail in an industry in which one or a few large firms dominate.

Thus, if we look at the Brand Furniture industry comprising Akhtar, Hatil and Brothers there

are few companies with shared dominance. This results in Oligopoly. .

Though Brothers had made a large investment, the full-scale operation for Brothers is yet to

begin and apparently it is following Akhtar and hatil. That is how the strategy do not differ

much from them and rivalry increases. In spite of this, the other two company do not consider

having Brothers as a noteworthy competitor and continues with their own strategy.

Furthermore, both the principle competitors, Hatil and Akhtar, pioneered the concept of

Brand Furniture industry, which has apparently been booming for the past few years. Brothers

identified this opportunity in the market and it is not a new entrant. In the end, with the

strength of integration prevailing within Brothers, there are possibilities of the industry

becoming highly consolidated.

The furniture industry is not a commodity market and each player has its differential

advantages. Imported-furniture based companies are also coming up. Hatil has set the tone

in brand timber-based furniture and Brothers eventually followed that. In this situation, price

is not that big a factor rather its the brand image, quality, innovation etc. that create the

difference. Moreover, when the differentiation is well established, each company has quite a

blue ocean of their own and thus the rivalry becomes less.

THE RIVALRY WITHIN THE INDUSTRY IS HIGH.

4.2.2. Threat of new entrants: Exit barriers are economic, strategic and emotional factors that may keep Brother Furniture in the

furniture industry even if returns are low. Exit barriers further create chronic overcapacity and the

intense rivalry which accompanies that condition.

THE ENTRY AND EXIT BARRIER IS HIGH.

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Since Brother Furniture had invested a substantial amount to establish their stand in the market, it

makes it hard for them to leave the industry.

4.2.3. Threat of substitute products or services: Close substitutes for Brother Furniture are:

Wrought Iron furniture

Plastic furniture

Solid wooden furniture

These close substitutes are a very potent competitive threat for Brother Furniture concern. Moreover,

the Wrought Iron furniture boomed up as a fade and now lost their attractiveness due to low durability

while plastic furniture is perceived as outdoor furniture and targets to a different market segment.

THE THREAT OF SUBSTITUTION IS SUBSTANTIALLY LESS.

However, the solid wood made furniture is a big threat for Brother Furniture. The consumers

perception is that the wood made furniture is more reliable and that the particleboard is made of jute-

stick only. Besides, wood can be extensively curved but boards cannot be. To cope with this problem

Brother Furniture started to integrate solid wood-curving upon their particleboard furniture.

4.2.4. Bargaining power of suppliers: For Brother Furniture the threat of the bargaining power of the supplier is likely to be low due to

Vertical integration

Good relation with foreign timber traders

THE THREAT OF SUPPLIER POWER IS SUBSTANTIALLY LESS.

4.2.5. Bargaining power of customers: The buyer is the next person downstream in the value chain. The buyers of Brother Furniture are

grouped as the following:

General consumers having event-wise demand, buy in small amount but altogether build a

large group providing maximum revenue.

Institutions and organization having bulk demand

Furniture buyers can integrate backward if suppliers cannot offer satisfactory prices. Often consumers

choose designs of furniture from galleries and produce them through individual wood artisans.

THE THREAT OF BUYER POWER IS SUBSTANTIALLY LESS.

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4.3. SWOT Analysis: It is a tool that identifies the strengths, weaknesses, opportunities and threats of an organization.

Specifically, SWOT is a basic, straightforward model that assesses what an organization can and cannot

do as well as its potential opportunities and threats.

SWOT analysis can also be carried out for a product, place, industry or person. It involves specifying

the objective of the business venture or project and identifying the internal and external factors that

are favorable and unfavorable to achieve that objective.

Factors that are covered in SWOT analysis are:

Strengths: characteristics of the business or project that give it an advantage over others.

Weaknesses: characteristics that place the business or project at a disadvantage relative to

others

Opportunities: elements that the project could exploit to its advantage

Threats: elements in the environment that could cause trouble for the business or project

Identification of SWOTs is important because they can inform later steps in planning to achieve the

objective.

The conducted SWOT analysis of Brothers Furniture Ltd. gave us the following findings,

4.3.1. Strengths: The identified strengths of Brothers Furniture Ltd. that gave it a competitive advantage over other

competitors are,

Stable financial condition.

A detailed customer database.

A loyal customer base, most customers are involved in rebuy.

Software based central inventory.

High brand value

Use of advanced machineries for production.

Skilled craftsmanship.

Innovative and exclusive design.

User and environment friendly design

There are four outlets in kakrail, Nazimuddin Road, Uttara and baridhara. These outlets are

strategically located targeting the target customer base. And also there are other outlets in

different places but they are through dealerships.

They always try to keep in touch with the customers. Different promotions are

communicated via SMS, phone call and other advertising methods.

Adequate advertising through television, billboards and newspapers. Especially they are one

of the ATN news sponsors.

Promotional and discounted sales option during the festivals like EID, New Years celebration

etc.

Most raw materials are imported from China, not affecting the country environment.

Environmentally positive attitude, raw material are mostly vinyl boards and only oak wood is

used for framing.

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4.3.2. Weakness: Brothers Furniture Ltd. is one step behind from its prime competitors like Hatil and Akhtar for the

following reasons,

Limited distribution channel compared to the competitors.

Higher product price.

Showrooms are not well decorated.

Designs are fixed and there is no opportunity for customization.

Not involved in interior designing.

They are not producing office furniture like their competitors, so they are losing a potential

revenue opportunity.

No clearance sales are conducted.

No packaging is provided during furniture sale.

No delivery option is provided from the company while the goods are sold.

Unskilled marketing executives and sales persons.

4.3.3. Opportunities: If following opportunities can be utilized, Brothers Furniture Ltd. will be able to operate more

efficiently and they will be able to compete with its competitors from shoulder to shoulder,

Can expand business options via providing interior designing option to customers.

Office furniture production will give them the same position as competitors.

Approval of famous artists, like Otobi has a strong connection with Nitun Kundu.

Approval of environmentalists.

Increased export opportunities.

Growing concern on forestation will win the hearts of environmentally concerned

customers.

Growing customer base.

Exploring International market.

Cost-efficient technology.

4.3.4. Threats: The following facts should be always kept in check, so that they does not drag this company to its

destruction,

Extreme competition.

Downward pricing pressure.

Compressed product life cycle.

Dependency on the international suppliers for raw materials.

Increased popularity of substitute products like plastic, board and rot iron based furniture.

Lack of import barriers.

High exit barrier.

Oligopoly market. Market is dominated by Hatil, Otobi and Akhter furniture Ltd.

Competitors have an established loyal customer base.

Unpredictable political situation.

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5. Conclusion:

The thorough strategic business analysis on Brothers Furniture Ltd. has revealed that despite of

some complications the total furniture industry in Bangladesh is facing a favorable condition for its

growth. In case of Brothers Furniture Ltd., it entered into the market with high industry profits which

are associated with weak suppliers, weak buyers, high entry barriers, little opportunity for substitutes,

and little rivalry. But presently, it is facing a severe competition from its competitors. And this

company is lagging behind from its near competitors due to its unresponsiveness to market trends.

The annual turnover value indicates that the company is doing well financially but some unattended

factors specially the unfriendly nature of marketing and sales representatives will drag this company

into abysmal.

A

6. References Bangladesh Economy Website. (2014, March 29). Retrieved from

https://bdbanijjo.wordpress.com/tag/industry-of-bangladesh/

Bangladesh Economy Website. (2014, March 29). Retrieved from

https://bdbanijjo.wordpress.com/tag/industry-of-bangladesh/

Brothers Furniture ltd. (2014, March 29). Retrieved from Brothers Furniture ltd.:

http://www.brothersfurniture.com.bd

Daily Prothom-alo. (2011, June 9). Fiscal Budget Speech 2011. Daily Prothom-alo. Retrieved from Daily

Prothom-alo.

EU inspired program. (January 2013). Furniture Sector Includes Value Chain Analysis and Proposed

Action Plans.

Katalyst. (n.d.). Bangladesh Furniture Industry and Export Promotion. Canadian International

Development Agency.

PKF, Accountants and business advisors. (January 2013). Technical Report: Furniture Sector Includes

Value Chain Analysis and Proposed Action Plans. Bangladesh INSPIRED.