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SOURCES OF COMPETITIVE ADVANTAGES OF OTOBI LIMITED

SOURCES OF COMPETITIVE ADVANTAGES OF OTOBI LIMITED
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SOURCES OF COMPETITIVE ADVANTAGES OF OTOBI LIMITED
1.0 INTRODUCTION
1.1 Origin of the Report. This report was authorized by the course instructor AFM Abdul Moyeen, PhD
to write a term paper on the course Strategic Management as a part of MBA program. This report is
written by group 4, composed of four members as envisaged in the title fly. The report was submitted
on 19 October 2002.
1.2 Objective. The objectives of this report are:
To carry out SWOT analysis of OTOBI Ltd
To evaluate the sources of competitive advantage of OTOBI Ltd
To analyze the functional level strategy implemented by OTOBI Ltd
To study the nature of the business level strategy followed by OTOBI Ltd
To explore the corporate level strategy pursued by OTOBI Ltd
1.3 Sources and Methodologies of Collecting Information. The information necessary to write the
repot was collected both from primary and secondary sources. Organizational survey and interviews
were done to gather the information. All possible efforts were made to ensure the credibility of the
report to the maximum extent at the time of writing the report.
1.4 Report Preview. Since OTOBI is the leading laminated board furniture manufacturing company, we
have chosen this company to evaluate its sources of competitive advantage. As efficiency, quality,
innovation and customer responsiveness are the main building blocks of competitive advantages;
therefore these are discussed elaborately under functional level strategy. An effort has been taken to
relate the theoretical knowledge with current strategies followed by OTOBI to achieve competitive
advantages. This paper attempts to highlight business and corporate level strategy pursued by OTOBI
as well.
2.0 BRIEF BACKGROUND OF THE ORGANIZATION
2.1 Background. OTOBI Limited is one of the leading world class furniture manufacturers of its kind in
the country. Over the two and half decades of tireless endeavor, OTOBI earned the fame and image of
the unique manufacturer of world class products. OTOBI received National Business Award as
Enterprise of the Year for year 2001. It makes all kinds of metal, laminated board and plastic
furniture. The functional utility and durability with the elegance of OTOBI products earned the
reliability and confidentiality of the customers. Currently OTOBIs product range cover the office
furniture, household furniture, plastic furniture, hospital furniture, computer furniture, kitchen

cabinet, work station, storage rack, decorative items and interior decoration. Besides these crests,
trophy, medal, gift box etc are also the products of OTOBI.
2.2 Founder of the Organization. Countrys famous artist Mr. Nitun Kundu is the managing director of
OTOBI. His endless efforts, creative idea and professionalism brought OTOBI at present state. Painter
and sculptor Mr. Nitun Kundu graduated from Institute of Fine Arts, Dhaka in 1959, and secured first
class first position. The same year he started his career as a designer in the United States Information
Services (USIS) Dhaka. He left USIS as chief designer in 1971 and participated in the liberation war.
After the war he turned into a free lance painter. In 1974 he conceived the idea of embarking into
commercial venture and started manufacturing decorative items at his residence. The name of his mini
workshop was The Designer.
2.3 Introductory stage of OTOBI. Mr. Nitun Kundu set up a small workshop in a tin shed at Topkhana
road in Feb 1977 and named it Art in Craft. Here in addition to coat pin, cup, crest, trophy etc he
started manufacturing decorative items, table lamp and various types of metal furniture. In
Bangladesh traditionally wooden furniture are used, but forest resources being extremely limited, Mr.
Nitun Kundu anticipated the need for metal furniture and in 1978 and he opened a show room at New
Elephant Road, Dhaka and gradually started marketing all kind of metal furniture in a proper manner.
2.4 Growth of the Organization. In 1984-85 Mirpur factory building was constructed. All kind of metal
furnitures were being manufactured at Mirpur factory and marketed through the show room at
Elephant road by 1988. The quality of OTOBI products as well as sales and marketing methods was so
successful that by 1992 Mr. Nitun Kundu constructed a four storied building at Dilkusha C/A and
opened a display center on October 1993. OTOBI set up another factory at Shyampur with continuous
market demand, which went into experimental production in 1994. The factory is now full operational
with latest machines to manufacture a wide range of most sophisticated furniture so that it can
compete in the international market.

3.0 IDENTIFICATION OF INTERNAL STRENGTHS AND WEAKNESSES

3.1 Internal Strengths: Strengths of OTOBI are as follow:
Skilled Workforce. OTOBI possesses a skilled and efficient work force. While shifting its manufacturing
plant from Mirpur to Shyampur it took all of its skilled work force along with it.
Dynamic Leadership. The founder of OTOBI, Mr. Nitun Kundu, is a dynamic person with lot of
innovative skills. He is a famous architecture of our country. As Managing Director, he has lead OTOBI
to establish itself to be a world class furniture manufacturer.
Well Facilitated Production Site. Initially the production site of OTOBI was located at Mirpur which day
by day became overcrowded. Thats why OTOBI had to shift some of its production facilities to
Shyampur, located beside Dhaka-Narayangang highway. There by they could also avoid burden of
municipal tax and other costs.
Good Marketing Force. The marketing department of OTOBI is composed of good number of skilled

marketers. The brochures published by this department can not but attract every cultured person.
R & D. There is an R& D section in OTOBI which is guided by the MD himself. As the Managing Director
of OTOBI is very innovative he keeps himself involve in R&D as well as encourages his employees for
even small innovation.
3.2 Weaknesses. OTOBI has the following weaknesses:
Failure to Follow JIT. One of the main components of OTOBIs product is imported from Malaysia,
Thailand and Singapore. Due to political unrest OTOBI keep huge buffer stock to meet contingencies.
Which makes it unable it to follow JIT. Some times this stock becomes so large that OTOBI has to stop
its further selling, and disposes the raw material first.
Price of OTOBI Product. For the general people of Bangladesh price of the OTOBI product seems to be
little high in comparison to other wood made furniture, which restricts it to get a large customer
group.
3.3 Opportunities. OTOBI has the following opportunities:
Growing Market Share. Starting from the small corner of the kitchen of a home maker up to the
luxurious work stations of the top executives, OTOBI has successfully established foothold through its
various type of furniture.
Changing Culture. With the change in culture and fashion, people are looking for stylist, well designed
furniture for their houses, offices and shops. This opens a broad market opportunity for OTOBI.
Growing Concern on Forestation. Every year large portion of forest have been wiped off by the woodbusinessmen for preparing the wooden furniture, which has a devastating effect on the environment
of our country. Now people have become more conscious about forestation, they have started looking
for furniture made of other substitute materials as OTOBI offers.
3.4 Threats. OTOBI has the following threats:
New Competitors. Recently in our country a good number of firms are coming up with their innovative
and competitive furniture like Partex, Tanin, Akiz Partex. There is also some foreign furniture being
imported which becomes threat to OTOBI products.
Restriction on Use of Plastic. Recently government has imposed restriction in use of polythene bag due
to its detrimental effect on the environment. Government is also thinking to impose restriction on
other plastic materials subsequently. As OTOBI is using a good amount of plastic material to produce
its product therefore this restriction may become a threat to OTOBI.
Use of Rot Iron. Use of rot iron as furniture is also becoming popular day by day with the change of
culture and fashion. It is also becoming a threat to OTOBI.
Political Unrest. Political unrest is a normal phenomenon in our country. Supply of raw materials and
production schedule often gets stuck up due to strike and other political unrest. Thus it hinders the
activities of OTOBI like all other industries.
4.0 LITERATURE SURVEY
4.1 Efficiency. A business is simply a device for transferring inputs into outputs. Inputs are basic factors
of production such as labor, land, capital, management and technological know how. Outputs are
goods and services that the business produces. The simplest measure of efficiency is the quantity of
inputs that it takes to produce a given output. That is efficiency= output/input. The more efficient a
company, the few inputs required producing given output. Efficiency helps a company attain a low cost

competitive advantage. The most important component of efficiency for many companies is employee
productivity, which is usually measured by output per employee.
4.1.1 How to Achieve Superior Efficiency. Superior efficiency can be achieved at functional level. First
various primary functions of production and marketing, then various functions of supporting activities
of the firm will be discussed.
4.1.1.1 Production and Efficiency. Efficiency is the measure of producing outputs from limited inputs.
Production can influence efficiency in the following way:
4.1.1.1.1 Economies of Scale. Economies of scale are unit cost reduction associated with a large
output. One source of economies of scale is the ability to spread the fixed cost over a large volume of
production. Another source of Economies of scale is the ability of the company producing in large
volume to achieve a greater division of labor and specialization.
4.1.1.1.2 Learning Effect. Learning effect are cost saving that come from learning by doing, for example
learns by repetition how best to carry out a task. In other words labor productivity increases over time
and unit cost falls as individual learns the most efficient way to perform a particular task.
4.1.1.1.3 The Experience Curve. It refers to the systematic unit cost reductions that have been
observed to occur over the life of a product typically decline by some characteristics amount each time
accumulated output of the product is doubled.
4.1.1.1.4 Flexible Manufacturing. The idea economy of scale is that the best way to achieve high
efficiency, and hence low unit cost, is through the mass production of a standardized output. Wide
product variety makes it difficult for a company to increase its production efficiency and thus reduce
its unit cost. The flexible manufacturing technology covers a range of manufacturing technologies
designed to:
Reduce set up time for complex equipment
Increase the utilization of individual machines through better scheduling
Improve quality control at all stages of the manufacturing process
4.1.1.2 The Marketing and Efficiency. The marketing strategy that a company adopts can have a major
impact upon the efficiency and costs structure of an enterprise. It refers to the position it takes with
regard to pricing, promotion, advertising, product design and distribution. The important role of the
marketers is to reduce customer defection rates and building customer loyalty.
4.2 Quality. Within any given industry some companies are more profitable than others as those
companies have some sources of competitive advantage like quality. Quality products are goods and
services that are reliable in the sense that they do the job they were designed for and do it well. The
impact of high product quality on competitive advantage is two fold:
High quality products increase the value of those products in the eyes of consumer. In turn this
enhanced perception of value allows the company to charge a higher price for its products.
The second impact of high quality on competitive advantage comes from the greater efficiency and the
lower unit costs it brings. Less employee time is wasted making defective products or providing

substandard services and less time has to be spent fixing mistakes, which translates into higher
employee productivity and lower unit cost. Thus high product quality not only lets a company charge
higher prices for its products, but also lowers cost. This relationship will be much more clear if we
follow the figure given below:

4.2.1 Achieving Superior Quality through TQM Concept. The enhanced reputation for quality lets the
company to charge a premium price for its product, and the elimination of defects from the
production process increases the efficiency, hence lower costs. A company can use different means to
achieve superior quality. The main one is total quality management (TQM). It is a management
philosophy that focuses on improving the quality of a companys product and services and stresses
that all company operations should be oriented toward this goal.
4.2.2 Implementing TQM. Implementation of TQM requires close operation among all functions in the
pursuit of the common goal of improving quality. It is a process that cut across the function.
4.2.2.1 Building Organizational Commitment. TQM concept will be useless for a company unless it is
embraced by every one in the organization. Both top management and general employee can play a
major role in this process.
4.2.2.2 Focus on Customer. TQM practitioners see a focus on the customer as the starting point. The
marketing function should play a vital role here. It needs to identify what the customer want from the
good or services that the company provides; what the company actually provides to customer. The gap
between what customers wants and what they actually get is called quality gap, and this gap should be
eliminated as far as possible.
4.2.2.3 Setting Goals and Creating Incentives. The task of setting goals and creating incentives is one of
the key tasks of the top managements. The management should set a challenging quality goal and
should create incentives for reaching those goals.
4.2.2.4 Solicit inputs from Employees. Employees can be a vital source of information. Whatever the
forum, soliciting inputs from lower level employees requires that management be open to receive and
acting on, bad news and criticism from employees.
4.2.2.5 Identifying Defects. Product defects most often occur in the production process. TQM tells that
defects should be identified during the work process, trace them to their source, find out what caused
them, and make corrections so that they do not recur. One technique that helps greatly in tracing
defect to their source is reducing lot sizes for manufactured products.

4.2.2.6 Building Relationship with Suppliers. A major source of poor quality finished goods is poor
quality component parts. To decrease product defects a company has to work with its suppliers to
improve the quality of the parts they supply. Following steps will be beneficial for a company which is
practicing TQM concept:
No of suppliers has to be reduced to manageable proportions
The company should establish a long term contractual relationship with the suppliers
4.2.2.7 Breaking down Barriers between Functions. TQM implementation requires organization wide
commitment and substantial cooperation among functions, i.e.; R&D has to cooperate with Production
to design products that are easy to manufacture.
4.3 Innovation. Innovation is perhaps the single most important building block of competitive
advantage. It can be defined as any thing new or novel about the way a company operates or the
products it produces. Innovation means new ways of doing things. It includes advances in the kinds of
products, production process, management system, organizational structure and strategies developed
by a company. Although not all innovation succeeds, those do can be a major source of competitive
advantages. It gives a company something unique which its competitors do not have. In the long run
competition can be viewed as a process driven by innovation. For this innovation, the company being
the sole supplier of a new product can charge a premium price. By the time competitors succeeded in
imitating the innovator, the innovating company had built up such strong loyalty and supporting
management process that its position proved difficult for imitators to attack.
4.3.1 High failure rate of innovation. Though innovation can be a source of competitive advantages,
the failure rate of innovative new products is high. One recent study shows that only 12 percent
innovative products earned an economic profit. There are many reasons that new products fail to
generate economic profit as the followings are:
Uncertainty
Poor Commercialization
Poor Positioning strategy
Technological Myopia
Slowness in Marketing

4.3.2 Building Competencies in Innovation. Companies can take a number of steps in order to build a
competency in innovation and avoid failure. These areas are discussed below.
4.3.2.1 Building Skills in Basic and Applied Research. Building skills in basic and applied research
requires the employment of research scientists and engineers and the establishment of a work
environment that fosters. A number of top companies try to achieve this by setting up university- style
research facilities, where scientists and engineers are given time to work on their own research
projects, in addition to projects that are linked directly to ongoing company research.
4.3.2.2 Project Selection and Management. Project management is the overall management of the
innovation process, from generation of the original concept, through development, and into final

production and shipping. Project management requires three important skills: the ability to encourage
as much generation of ideas as possible; the ability to select among competing projects at an early
stage of development so that the most promising receive funding and potential costly failures are
killed off; and the ability to minimize time to market. Project development phases are shown below:

4.3.2.3 Cross Functional Integration. Tight cross-functional integration between R & D, production, and
marketing can help a company to ensure the following:
Production development projects are driven by customer needs
New products are designed for ease of manufacture
Development cost is kept in check
Time to make is minimized
Close integration between R & D and marketing is required to ensure that product development
projects are driven by needs of customers. A companys customer can be one of its primary sources of
new product ideas. Identification of customer needs, and particularly unmet needs, can set the
context within which successful product innovation takes place. There are two ways to achieve it:
4.3.2.3.1 Product Development Teams. One of the best ways to achieve cross-functional integration is
to establish cross-functional product development teams. These are teams composed of
representatives from R & D, marketing and production. Certain attributes seem particularly important
for a product development team. These are:
The team should be led by a project manager who has both high status within the organization and the
power and authority to obtain the financial and human resources that team needs to succeed
The team should include at least one member from each key function
The team members should be physically collocated to create a sense of camaraderie and to facilitate
communication
The team should have a clear plan and clear goals, particularly with regard to critical development
milestones and development budgets
Each team needs to develop its own process for communication and conflict resolution.
4.3.2.3.2 Partly Parallel Development Process. One way in which a product development team can
compress the time it takes to develop a product and bring it market is to utilize a partly parallel
development process where product development proceeds without consideration of manufacturing
issues. To solve this problem companies typically use a process which is shown below. In the partly

parallel development stages overlap so that, for example, work starts on the development of the
production process before the product design is finalized. By reducing the need for expensive and
time-consuming product redesigns, such a process can significantly reduce the time it takes to develop
a new product and bring it to market.

A sequential Process

A partly Parallel process

4.4 Customer Responsiveness. Customer responsiveness is the ability of a company to do a better job
than competitors of identifying and satisfying the need of its customers. Consumers then place more
value on its products, creating a differentiation based competitive advantage. Achieving superior
quality and innovations are an integral part of achieving superior customer responsiveness. Another
factor that stands out in any discussion of customer responsiveness is the need to customize goods
and services to the unique demands of individual customers or customer group. There are two other
prerequisites for attaining this goal. The first is to focus on the companys customers and their needs,
and the second, to find ways to better satisfy those needs.
4.4.1 Customer Focus. A company can not be responsive to its customers needs unless it knows what
those needs are. The means to this end are demonstrating leadership, shaping employee attitudes,
and using mechanism for bringing customers into the company.
4.4.1.1 Leadership. Customer focus must start at the top of the organization. A commitment to
superior customer responsiveness brings attitudinal changes throughout a company that can

ultimately be built only through strong leadership.

4.4.1.2 Employee Attitude. Achieving a superior customer focus requires that all employees see the
customer as the focus of their activity. Leadership alone is not enough to attain this goal. The objective
should be to make employees think of themselves as customer- to put themselves in the customers
shoes.
4.4.1.3 Bringing Customer into the Company. Know thy customer is one of the keys to achieving
superior customer responsiveness. Knowing the customer not only requires that employees think like
customers themselves; it also demands that they listen to what their customers have to say, and, as
much as possible bring customers opinions into the company.
4.4.2 Satisfying Customer Needs. Once a focus on the customer has been achieved, the next task is to
satisfy the customer needs that have been identify. Companies can provide a higher level of
satisfaction if they customize the product and minimize the time it takes to respond to customer
demands.
4.4.2.1 Customization. Varying the features of a good or service to tailor it to the unique needs of
groups of customers or, in the extreme case, individual customers is known as customization.
4.4.2.2 Response Time. Giving customers what they want, when they want it requires speed of
response to customer demands. To gain a competitive advantage a company must often respond to
consumer demands very quickly.
5.0 FUNCTIONAL LEVEL STRATEGY IN OTOBI
5.1 Efficiency in OTOBI. We have learned in our literature survey how a company can achieve superior
efficiency that is, how it can reduce its cost. There are various functions undertaken by OTOBI which
directly or indirectly contribute to achieve efficiency.
5.1.1 To achieve economies of scale OTOBI goes for a large volume of production together. For this
purpose, they do not leave out the small orders also. What they do is compile all the small orders and
then go for production.
5.1.2 Efficiency is also achieved through division of labor and specialization. OTOBI has divided its labor
force for various segments and goes for specialization; chair, table, kitchen cabinet, hospital furniture,
office furniture etc.
5.1.3 OTOBI gives emphasis on the experienced worker. If a little bit higher pay is also required they
are ready to pay, but it always try to hold up their experienced and old employees. OTOBI shifted their
plant from Mirpur to Shyampur, some of the local workers refused to go to the new location. OTOBI
gave them higher payment, accommodation and other facilities to take them to Shyampur.
5.1.4 To make the manufacturing process flexible, recently OTOBI has imported modern machineries
from Germany. Locally they are continuously trying to improve their equipments to ease the
manufacturing process.
5.1.5 OTOBI does not leave out even single customer. Again they are also careful that in the process of
customization cost does not run out of limit.
5.1.6 OTOBI has become so renowned in the field of furniture that they could establish brand loyalty in
thousands of customer. Through customization they do not allow any individual customer to defect
from their company.
5.1.7 Mr. Nitun Kundu, the founder of OTOBI is a very creative and innovative person. He always
engages himself in R&D. He also encourages his employees to think to innovate. Recently OTOBI has

innovated a number of small engineering tools which have made the production process easier and
cost effective. The teams which innovate some thing new get a good amount of remuneration.
5.1.8 Through good leadership OTOBI could establish a well coordinated network and cooperation
among the employees. Employees are trained time to time on a new machine or technology.
5.2 Quality in OTOBI. OTOBI produces high quality world class furniture, thats why customers have a
high perceived value for OTOBI products in their mind. There by OTOBI could charge premium price for
its products. And the customers are ready to pay more amounts for a quality OTOBI product.
5.2.1 Since OTOBI has a very efficient work force, their efficiency reduces cost of production to a
greater degree.
5.2.2 OTOBI could establish a strong organizational commitment to achieve superior quality to beat
the competitors in the quality aspects. Starting from managing director of OTOBI up to general worker
every one in OTOBI is self motivated to produce quality products.
5.2.3 OTOBI gives great emphasis on the customer need. The company is always trying to eliminate the
quality gap. When customers buy any OTOBI products they are ensured to be satisfied that the price
they are giving for a product is as worth as the quality of the product itself. The customers bear the
feelings that they are not being cheated with a huge price that OTOBI charges.
5.2.4 OTOBI often offer challenging goals to its employees. Side by side adequate incentives are also
arranged for meeting those goals.
5.2.5 OTOBI solicits the ideas taken from any level of worker. Any worker /employee of OTOBI are at a
liberty to talk about any idea which may improve the quality. There is a provision of fortnightly
meeting in OTOBI, chaired by MD himself. In the meeting all the production managers discuss about
the ideas and information generated at worker level of their respective divisions. Afterwards, R &D
section works on it if it is a viable one. This accepting attitude of management facilitates to have a
unique working environment in OTOBI.
5.2.6 OTOBI used to follow TQM concept in identifying the defects. The defects are traced in the
production process. More over OTOBI produces its products in smaller lots size, thats why even if
defective products are produced their number remains smaller, which also decreases the wastage.
Again with short production lot, defects show up immediately, they are quickly traced to the source
and problems are solved.
5.2.7 OTOBI has a manageable number of suppliers. There are three types of suppliers in OTOBI:
Local items- procured from local suppliers
Imported items- procured from overseas suppliers
Stationary items- procured from local suppliers
OTOBI believes in having long term contractual relationship with the domestic and overseas suppliers.
The suppliers of OTOBI also feel comfortable to work with OTOBI for such long term relationship.
5.2.8 OTOBI could establish a very good cross functional relationship among different divisions. Here
we may discuss about the operation management function. Marketing department does the marketing
forecast, accordingly production manager carry on acquisition of resources, and thereafter conversion
of inputs into outputs is done through transformation process. If the marketing department could
identify any change of customer need, immediately the idea is forwarded to R&D department. R&D
department acts accordingly and improve or restructure the design.
5.3 Innovation in OTOBI. As OTOBI is a leading and pioneer furniture maker in our country, it follows

the continuous improvement in case of machinery, materials, and labor utilization and production
methods. There is a tool machine section which is used as part of research and development division
for machines. Out of numerous innovative products, parts and process few of those are discussed
below.
5.3.1 Drill Punch Machine. It is a riveting item which is required for connecting the sheets in the chair.
Earlier they used to take 03 minutes to reduce that. With a continuous improvement it takes hardly 4
seconds which saves time. Earlier they need to do it manually, now machine can do it.

5.3.2 Cluster Tool. Earlier it used to take 5 minutes to make a cluster tool; now with the development
by tools section it takes only 1 minute.

5.3.3 Bench Marking. During its initial production they bought different items from India, Singapore,
Malaysia, and Sweden as model. Now they do not follow any particular company. But they try to
improve their product comparing with international product. Earlier they used to produce steel
Almirah which costs more than 18000 taka. Afterward observing different Almirahs of Alico Company
based in Japan, Godrej from India and Oloy company jointly operating (India, Italy) they designed a
new Almirah which is compatible with those but costs only 10000 taka.
5.4 Customer Responsiveness in OTOBI. OTOBI attends all the trade fairs in Bangladesh to
communicate their performance to the customers. It has set a rare example by winning the first prize
in Dhaka International Trade Fair since 1981 2001 by offering quality products, service and pavilion
decoration. They work with an aim to increase SATISFIED CUSTOMER. To respond to the need of
customers OTOBI has established their presence across the country by extending dealer network in
almost all district headquarters.
5.4.1 OTOBI manufactures different products in two ways: Normal work and Project work.
5.4.1.1 Normal Work. For normal work OTOBI forecasts their production requirement and prepare a
detail work schedule for a particular period. According to the schedule they produce a wide variety of
furniture. This variety of furniture mostly serves the customer needs.
5.4.1.2 Project Work. OTOBI takes some project to serve individual customer to produce customized
product. This includes bulk order of particular furniture, kitchen cabinets etc.
5.4.2 Customer can easily purchase required furniture from the show room or dealers any time which
are produced through normal work. For customized product they take the order from the customer
first and deliver those after production. They take around 30 days to deliver and fix a kitchen cabinet.
To provide home service delivery, people from OTOBI go to the customers house for required
measurement of kitchen cabinet and after manufacturing again they go to that particular customers
house to fix that.
5.4.3 OTOBI delivers its product by its own transport to the customer if the order is of more than taka

100000.
5.4.4 OTOBI also gives preference to individual customers taste. They deliver customized product
according to customers choice of design, color, shape and size.
5.4.5 Products are prepared and delivered in parts with a manual so that customers can easily
transport it to home or office and then assemble it. Besides providing warranty, OTOBI also renders
after sales service through its different outlets.

6.0 BUSINESS LEVEL STRATEGY OF OTOBI

Companies pursue a business level strategy to gain a competitive advantage that allows them to
outperform rivals and achieve above average returns. They can choose from three basic generic
competitive approaches; cost leadership, differentiation and focus, although these can be combined.
OTOBI has brought changes in production technique through development of flexible manufacturing.
Thats why they can follow both cost leadership and differentiation strategy in the following way:
Through flexible manufacturing process OTOBI has reduced its cost. They are using various tools
innovated by them for this purpose.
OTOBI being a differentiator is also realizing significant economies of scale by standardizing many of
the component parts used in end product.
OTOBI is also reducing both of its production and marketing costs. Through attractive brochures it
offers no of packages of options from which customer gets readily his/her expected one.
By following both cost leadership and differentiation strategy, OTOBI is getting more profit than its
competitor. Because it is reducing the cost and at the same time increasing the perceived value of their
product.
7.0 CORPORATE LEVEL STRATEGY OF OTOBI
The principal concern of corporate strategy is identifying the business areas in which a company
should participate in order to maximize its long term profitability. When choosing business areas to
compete in, a company has several options. It can focus on just single business, it can diversify into a
number of different business areas or it can vertically integrate, either upstream to produce its own
inputs or downstream to dispose of its own outputs.
The corporate level strategy of OTOBI is to concentrate on a single business. It competes successfully
within the confines of a single business that is in the laminated furniture business.
OTOBI focuses its total managerial, financial, technical and physical resources and capabilities on
competing successfully in a single area.
As it is a fast growing business, demand on its resources are very significant.
Even after having the capability of diversification, OTOBI does not go for that. It sticks to its knitting
that is it sticks to doing the furniture business, what it knows best. OTOBI does not want to do any
mistake of diversifying into areas about which it knows little and where its existing resources and

capabilities add little value.

8.0 CONCLUSION
Why do some organizations succeed while others fail, even if those companies start their business
with same resources? The only reason is that the selection or choice of strategy as well as
implementation of that. A company pursues a strategy to attain superior performance, through
achieving its stated goals. Being pioneer to bring revolutionary changes in the arena of laminated
furniture, OTOBI has gained competitive advantages over its competitors. By implementing functional
level strategy successfully, OTOBI could achieve superior efficiency, quality, and innovation and it has
become customer responsive.

9.0 RECOMMENDATIONS
Our group recommends the followings:
OTOBI should expand their distribution channel up to district level.
OTOBI should implement JIT which will help them to reduce cost.
Beside direct personal selling effort OTOBI should go for TV ad also, which will reduce their marketing
cost at the same time it will achieve wide spread fame.
OTOBI should take part in Save the environment program which will make them more responsive
towards customers.
Finally as the competition is increasing day by day, OTOBI should focus more on their quality and they
should also try to reduce their price to retain the customers.