Company Biography
In January of 2002, John Ferrer and his wife Deborah started their own corporation, a large custom furniture
manufacturer located in Boston, MA. Their initial accounts were in the Northeastern region of the United States,
and they annually observed a constant profit increase. By March of 2006, they were able to grow the company
enough to go from five distribution and manufacturing plants to 10 to allow shipping to 48 states. Although they
have two retail stores, one located in Phoenix and one in Boston, their primary source of revenue is online catalog
sales. They have 10 manufacturing plants and distribution centers throughout the country.
John and Deborah’s corporation is known throughout the industry for its exceptional customer service and
superior quality. The contemporary designs lend themselves to a younger market, and the customer base is
predominantly upper-middle class because it is one of the highest priced furniture companies in the market. Part
of the appeal of John and Deborah’s brand is their consistent involvement with the local communities to create
green gardens. They have also been a major contributor to organizations that build houses for people in need.
One of their primary strengths is their vertical integration. They have a team of in-house designers saving the
company design costs and allowing the flexibility to rapidly change designs as the market changes. Their products
have been featured on several prominent home design and gardening shows and have been endorsed by several
well-known designers.
Because of the recent housing market sales decline (8% from 2005–2006), home renovations have slowed
significantly. This has impacted the amount of furniture and fixture sales and continues to impact revenue.
Furniture sales in the United States have decreased significantly, and John and Deborah have recently been
discussing the possibility of global expansion.
Another potential threat to their company is that many higher-end brands have been marketing aggressively and
creating lines for popular retail stores. These allow the lower-income consumers to have access to high-end brands
at a much lower price point. So far, these lines have been incredibly successful and have significantly increased
profits for competitors. Many of these competitors have also had great success in the global marketplace with
these lower cost replicas.
John and Deborah know that it is time to seriously consider expanding their business. They want to be able to
make it through the economic crisis and rely on other ways to increase sales and business. They are open to
looking into the global market, but they want to be sure that it is the right move for the business. They have
requested an advisory board meeting next month in which you will present the global marketing strategy. As the
market strategist, you will play a key role in helping the board decide if this is the right move for the company.
The Problem
You are sitting in Deborah Ferrer’s office. After the customary small talk, Deborah sits forward and states, “I am
very impressed with the work that you have done as the strategic marketing manager. Since John and I started this
company in Boston, we have seen continuous growth, but nothing like what we have seen since you started.
However, the housing market is really starting to impact our profits. This last quarter’s numbers were not looking
good.”
You reply, “The crisis has really hit us hard. We have some stiff competition, too, with the other brands creating
retail knock-offs.”
She counters, “We’ve had great success with your strategies in the domestic markets, but we do need to think of a
new approach and strategy. I have complete faith in your abilities to take this company exactly where it needs to
go. I must say that we are really counting on you, and I know that you will follow through.”
“I will make sure that we do well. Do you have any new projects for me?” you ask.
Deborah smiles and says, “You know me well. I do have a new project for you. I sent you an e-mail just before our
meeting. I’m curious if expanding in a global market would be a good move for our company. I would like you to
look into this for me.”
“Our team is definitely up for the challenge,” you say with enthusiasm.
Deborah shakes hands with you warmly, and you make your way out of the meeting. As you drive out of the
parking garage, you think about your success with the company. You cannot wait to get started.
Analytical and integrative tools
Analytical and integrative tools
In analytical tools for performing in-depth analysis include Porter's five forces, PEST
analysis and SWOT analysis. The integrative tools to use include benchmarking tool. Thus
the business objective of using the variety of the research tools supports a higher level of
output in the industry. In this study, I will propose the use of a competitive five forces model
(Porter's five forces).
The Porter's five forces include the intensity of industry rivalry (Greenspan, 2017).
This is also contributed by the low differentiation level of the products; there are also high
costs associated with the purchase of the assets, labour unions which make the competitors
fight even more. The market shares of these rivals already in the market also mark a point of
competition in the market, either if the products are not differentiated add to the competition
available. The threat of potential entrants which shows that the ease in which new
competitors enters the market shows the increase in risk due to the new competitors' entry. If
the industry has a difficult entry for the new entrants, then the company can enjoy the
advantage associated with the higher profits and market dominance of few industries. Then
there is the bargaining power of suppliers which affects the industry depending on their
number. If the suppliers are too many, then the industries enjoy a lot of freedom in their
bargaining power. The bargaining power of buyers is also another force. If the buyers lie with
the buying power, then there is the possibility that companies will be operating at low prices
since they can easily negotiate the prices. This can be realised when the industry has more
competitors and a single buyer. Finally, there is the factor of the threat of substitute goods
Analytical and integrative tools
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and services. Companies always are faced with threats of substitute products hence it
prevents industries from charging too high prices on their products due to the competition.
Then I also propose the use of benchmarking tool which will help the company to
improve in its performance by identifying as well as applying the best techniques which have
been practically approved in the same industry (Rothwell et al. (2018). Thus managers are in
the position to compare their practices externally with those of the competitors as well as
internally with those of the best performing departments. Thus the use of benchmarking is to
realise the superior performance as well as come up with the ways of improving the same. In
benchmarking, one has to identify the key performance metrics, and then choose the
company which is your competitor in which you will benchmark from, and then come up
with data for performance as well as practices associated. Identify the areas in which you will
improve on. Finally, adopt the best practices and implement them in your company and make
sure to set reasonable goals to achieve the sane. Thus I believe benchmarking will be
reasonable enough to enable the company to compete favourably even in the global market.
Thus these two strategies porter's five forces and the benchmarking tool will enable
the company to realise several factors (Belton, 2017). In the use of benchmarking tool, the
company will realise how the other already operating companies in the industry will function
and thus enable it to achieve success in the seen area. The company will realise the areas of
strengths as well as the weak areas of operation. The competitive forces model gives the
company a clear look of the industry even before entry into it. The company will thus look at
the forces of the supplier, the customer, substitute products and services, complementary
goods and services as well as the threat from the potential entrants into the market.
Analytical and integrative tools
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References
Greenspan, R. (2017). Amazon. com Inc. Five Forces Analysis & Recommendations (Porter's
Model).
Belton, P. (2017). Competitive Strategy: Creating and Sustaining Superior Performance.
Macat Library.
Rothwell, W. J., Hohne, C. K., & King, S. B. (2018). Human performance improvement:
Building practitioner performance. Routledge.
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