decline of wooden furniture industry

8/3/2019 Decline of Wooden Furniture Industry

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Decline of Wooden Furniture Industry:

Strategies for Cane, Molded & SteelFurniture

Presented by:

Aishwarya Parthasarthy (03)Amardeep Bhogal (04)Ankit Kapoor (08)Jatin Ahuja (24)


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The World Furniture Industry

The world home furniture market is worth Rs 200

billion.During the last three years ie. from 2007 to 2010, it

grew by 20% a year.

Traditional furniture-making countries continue to

take up over 70 per cent of the global marketbecause of their long established production capacity,advancement in science and technology, solid fundsand rich management experience.

Meanwhile, developing countries and regions likeChina, Southeast Asia, Poland and Mexico, with Chinataking the lead.

These countries have built upon their respective

competitive advantages and gradually covered


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INDIAN FURNITURE INDUSTRY

Indian Furniture market is estimated to be

more than Rs. 60,000 cr (Rs. 600 bn)

The industry is dominated by theunorganized sector, which constitutes 90% of

the market.The organized furniture market is at 10% and

growing at about 35% CAGR.

The furniture sector in India only makes amarginal contribution to the formation ofGDP, representing just a small percentage(about 0.5%).

The furniture industry employs a total of


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SWOT ANALYSIS FURNITURE INDUSTRY

Strengths

Increasing demand in modern,

clean, minimalist designs

Highly educated, skilled, young,capable & dynamic humanresources

Established branding, tradition

Worldly-reknowned outsourcinghub

Diversity vs. Ideas (Innovation,Integration)

Big democracy= big market &

free media

Weaknesses

Inefficient stock control; outdatedsystem

Lack of trust in externalorganizations

Fear of sharing knowledge & taking

risks

Lack of effective & executionframework

Decreasing demand in traditionalfurniture

Industry has slow absorption ofinnovation & change


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SWOT ANALYSIS FURNITURE INDUSTRY

Opportunities

Big potential market in Design sector

& emerging new market segment inServices

Lower labor costs in outsourcing

Research & Development capability

More efficient production method

Hybrid solutions balancing &blending

Need modernization of infrastructure

Very little competition in modern

furniture design

Threats

Large fluctuations in stock control(new production method)

Inter-company collaboration isunknown

Rising cost of imported goods

Pioneering uncertainties

Clashes in Diversity vs. Imbalance

Fast change Internet (IT), newinventions (Technology,Innovations)


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By SALES: MAJOR FURNITURE SEGMENTS


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WOODENFURNITURE

CANEFURNITURE

STEEL &MOLDEDFURNITU

RE


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REASONS FOR DECLINE IN THEWOODEN FURNITURE INDUSTRY

Upgrading challenge facing producers in

medium- and low-income economies

Chinese Cheap and eco-friendly furniture

posing threat to Indian Furniture Industry.

Housing market is slowing down & credit

crunch is hurting furniture consumers.

Furniture Imports are more expensive than

exports.


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With the decline and saturation in thewooden furniture segment, what do you

think could be the best alternative to replacewood on the basis of the following criteria?

Criteria STEEL FURNITURE MOULDED

FURNITURE

CANE FURNITURE

Reliability 80% 12% 8%

Availability 20% 40% 40%

Durability 65% 20% 15%

Pricing 30% 40% 30%

W d C St l M ld d


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Wooden Cane Steel Molded

Promotional Mix Good Poor Poor Good

Media Good Poor Poor Good

Distribution Excellent Poor Poor Average

ALTERNATIVES BUYERS INDUSTRIAL USES HOME USE

STEEL

FURNITURE

COMMERCIAL-UPTO 70% ALMIRAHS, RACKS DINING TABLES,

CHAIRS, BEDS

MOULDED

FURNITURE

HOTELS AND

RESTAURANTS: UPTO 80%

TABLES & CHAIRS SIDE TABLES,

SITTING CHAIRS,

STOOLS

CANE FURNITURE DOMESTIC: UPTO 60% LOBBY

ARRANGEMENTS

GARDENS AND

LOBBY TABLES AND

SOFAS (OUTDOOR)


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Molded furniture

Made from the finest

polypropylene, usingcomputer designed moulds.

lightweight.

Good quality and Modern

designed.

Weatherproof and virtuallymaintenance free.

Stackable and space-savingwhen not in use.

A wide range of attractivecolours.

Barring upholstered


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Cane furniture

It is less prone tobreakage, thus lastslonger and is good valuefor money.

Light weight

Reasonably priced &designer made.

Can be easily sourced.

Cane is known for itsflexibility, thus can bemolded and shaped intovarious unique, intricate

designs.


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Durability is the mainadvantage.

High corrosion resistance

Fire and heat resistance

Hygienic, non-porous, surface

Easy cleaning ability

Aesthetic appearance

Bright and easily maintainedsurface

Strength-to-weightadvantage.


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Strategies for Molded Furniture

Firms like Supreme & Nilkamal are market leaders.

Products are equally competitive & hence they mustconcentrate on product differentiation.

Companies can go ahead with plans of bringing inMolded Sofas & Molded Beds.

Plastic is still considered highly breakable, so animage makeover on the strength of plastic used bycompanies is a must.

Differentiation


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Contd.

In case of pricing, Penetration Pricing isrecommended because due to high pricing byOrganized Indian Players we observe level of local,unorganized purchases.

Distribution can be improved through tie ups withfurniture vendors who usually sell local or importedproducts.

Promotion Mix:

Advertisement on AIR & through Television.

Complete home-makeover offers.


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Strategies for Cane Furniture

Though its one of the oldest industry in India, stillits in the Growth stage.

A huge level of limited domestic use, makes thisindustry a slow progressing one.

Highly dominated by the local handicraft industry.

Color variation in the product can be suggested.

These are usually low priced, hence PENETRATIONPRICING is suggested.

Promotion: Tie up with nearby stores in localities.Trade and other fairs.

Distribution: local vendor & more of members in

Growth Strategy


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Strategies for Steel Furniture

Steel still considered as tough and uncomfortabledue to the toughness expects a Productdifferentiation: where a combination with other

softer elements like wood, could help.

Steel doesnt fit in as a cheaper commodity, henceLower Prices are to be put forward.

Distribution : through company owned storesbecause of high level of local vendor market.

Promotion:

Print media.

Money back plans

Product Differentiation


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BRAND RECOGNITION:

Furniturewala,

Zuari,Yantra,

Renaissance,

N R Jasani &Company,

Furniture Concepts,

Durian,

Kian

But this Brand recognitionis missing in case of all 3,

except in molded, where afew brands like Supreme& Nilkamal are known

WOODEN FURNITURE

BRANDS

decline of wooden furniture industry

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