Business Strategy (W-650) : Date: March 07, 2020 Presented by - Group 4

Business Strategy (W-650)
Date: March 07, 2020

Presented By – Group 4
A CASE STUDY ON
BROTHERS FURNITURE LTD.
Date: March 07, 2020

A CASE STUDY ON BROTHERS FURNITURE LTD.
Presented to –
Professor Dr. A. K. M. Saiful Majid
Course Instructor (Business Strategy, W-650)
Institute of Business Administration
University of Dhaka
Rauful Islam Sworan Anika Ema Arshad Chowdhury Md. Moinul Islam Md. Towshikur Rahman
59D; 30 59D; 32 57E; 42 58D; 32 58D; 49
Story of Brothers Furniture

 Cottage-based Furniture Industry
 Beginning of Brothers Furniture in 1981
 Dominance of Chinese Products
 BFIOA’s initiative
*BFIOA - Bangladesh Furniture Industries Owners Association

Story of Brothers Furniture

Purpose
 To provide customer satisfaction with competitive price

 To establish a local brand & substitute imports
 To respond to evolving preference of customers
Brothers Furniture Today
Visionary Management Modern Designing …and craftsmanship
 500 craftsmen and 30 to 40

skilled engineers
 36 showrooms Well-equipped Manufacturing Facility
Present Strategy
Vision & Mission
 Mission of Brothers Furniture is “Growth through service”.
 Vision of the company is “Dedication to the highest quality of customer

service delivered with a sense of warmth, friendliness, individual pride
& company spirit.”
BFL’s Strategy Analysis

Generic Competitive Strategy
Broad Differentiation in Terms of Product

& Services
Overall Low Cost Broad
Provider Differentiation
 Enriched R&D
Strategy
 Innovation in customer engagement
 Serving mid to high-end customers Focused Low Focused
Cost Differentiation

Success Test of Strategy
Fit Test Competitive Advantage Performance Test

• Competitive market
Test • Adopting technology
• E-commerce site & app • Evolving designs
• High chances of product
• Well equipped manufacturing • Countrywide showrooms
duplication facility & R&D
• Raw material variation ( from • Close Competitor exists (i.e.
wood to synthetic boards, Partex)
laminated boards, Plywood)

Success Test of Strategy
Corporate level Business Level Functional Level

strategy Strategy Strategy
• Product Quality • Showrooms through • Expert R&D team
• Affordable pricing Associates • Improved Customer
• Continuous improvement • Interactive online platform Service
in customer service • Mobile application • Work environment
• Environment friendly
sourcing of raw materials
Cost Efficiency Model
Economies of Scale
Supply
Experience
Supply
 Bulk production
Experience  Waste reduction
 Computerized
factory
Supply  Local items: from local

suppliers
Experience  Imported items:
Red oak Seed wood
Chemicals
Supply
 Over three decades
Experience
 Technically skilled
craftsmen
Marketing Mix
Product
Price
Promotion
Place
Marketing Mix
PRODUCT PRICE PROMOTION PLACE
BED Almirah Divan
Sofa Dining table Work station

Marketing Mix
Otobi
Akhta
r BFL Partex Regal
Nava
na
Mid Tier
Brand
Marketing Mix
TVC.. BROTHERS- better than others

Marketing Mix
Seasona
l
discount
offer
Marketing Mix
Free
Offer
Marketing Mix
Launched:  Augmented
2018 reality
 Virtual reality
 3D view
 Furniture
customization
option
 Product detai
Convenience to
customer
Marketing Mix
 Available in all
important and
financially affordable
areas of Dhaka city
X Less availability
outside
Total 39
of Dhaka
Outlets
Positioning Map
Price vs. Orientation
HIGH PRICE
HATIL
AKHTAR
BROTHER
PARTEX S
NAVANA
LOW HIGH
ORIENTATION ORIENTATION
OTOBI
LOW PRICE
Positioning Map
Price vs. Orientation
Positioning Map
 One of the leading players  Considered to be the  Came late in the

in the market “Game-changer” market
 Offers premium pricing  Offers moderate premium  Large inventory
 High End products pricing system
 Delicate designs  Carefully chosen raw  Technological
 Strong customer base materials advancement
 Well reputation in  Environment-friendly  Lacks high end
overseas business model products
 Intense marketing  Lacks promotion
 High product variation
Positioning Map
 One of the largest manufacturing  One of the pioneers in

brands furniture market
 Captured a sizable market share in  Highest market share
a short time  Highest retails stores
 Very well set vertical integration  Lower end products
 Low end product focus  Targeting mid-income
 Lacks functionality customers
 Prone to exporting  Lacks high end product
 Less user satisfaction
S
STRENGTH
W
WEAKNESS
O
OPPORTUNITY
T
THREATS
Analysis
SWOT Analysis
S
STRENGTH
W
WEAKNESS
O
OPPORTUNITY
T
THREATS
 Strong brand name

 Unique Design
 Good reputation among customer
 Automation in production
 Software based central inventory
 Imported raw materials from China
 Customer database maintenance
SWOT Analysis
S
STRENGTH
W
WEAKNESS
O
OPPORTUNITY
T
THREATS
 Lack of patent protection: anyone can copy the product

 Not advertised at larger scale
 Lack of User Friendly Website
SWOT Analysis
S
STRENGTH
W
WEAKNESS
O
OPPORTUNITY
T
THREATS
 Demand for Eco friendly product

 Zero wastage target for cost minimization
 Integrated marketing communication
 Niche for higher end products
 Opportunity to go global (Exporting to newer markets)
SWOT Analysis
S
STRENGTH
W
WEAKNESS
O
OPPORTUNITY
T
THREATS
 Shifts in consumer tastes

 Emergence of substitute products
 New regulations
 Increased trade barriers
 Imported furniture
PESTEL Analysis
Political E S T E L
Political Stability
 In recent years, some black shadow appeared in the sky of Bangladesh because of political unrest,
strike, conflicts, labor unrest etc.
Export-Import policy
 About 60% of raw materials are imported. Around 65% of wood is still imported.
 Increase in supplementary duty on imported furniture from 20 to 30 percent
 A withdrawal of regulatory duty of 5 percent on import of raw materials to make quality materials
cost effective (FY 2011-12)
Tax and Tariff policy

 The Govt. has made changes to the tariff policies of wood imports
 Also, to provide a 15% cash incentive on all types of furniture exports, to encourage foreign
exports
32
PESTEL Analysis
P Economic S T E L
 Since 2004, Bangladesh averaged a GDP growth of 6.5%, seeing major

improvements in its export volume
 Per capita income of Bangladesh has steadily risen over the years, reaching USD
1,751 in FY 2016-17, as per BBS.
 Bangladesh's Annual Household Expenditure per Capita reached 591.949 USD in

Dec 2016
In respect of the economic factors, is FAVORABLE nationally,

but in respect of the global market, due to the frequent fluctuation of
BDT against USD, it would be difficult to say
33
PESTEL Analysis
P E Social T E L
Issues Considered
Income level | Social status | Occupation | Age | Family size | Cultural factors | Fashion trends
 The average household size in Bangladesh reduced to 4.4 persons per family, as per BBS.
 The fact that 35.86 percent of Bangladesh's total population lived in urban areas and cities, demand
for more ‘modern furniture’ has improved.
 Consumers prefer local furniture to foreign manufactures these days, say industry insiders, which
bodes well.
 The industry, however, is still in the nascent stages of exploiting innovation opportunities.
In summary, there is FAVORABLE sociocultural support for the furniture industry of

Bangladesh 34
PESTEL Analysis
Technological
P E S E L
Issues Considered
Automation | Social Media | Technology incentives | Website | Supply chain management | Ease of
accessibility | ICT infrastructure | Cyber security
 Since 90s, furniture manufacturers have been using innovative designs, sophisticated machineries,
and other materials to grow and establish the industry.
 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.
Overall, there is FAVORABLE technological support for growth of the furniture

industry of Bangladesh. 35
PESTEL Analysis
Environmental
P E S T L
Issues Considered
Protection of nature | Business Ethics | Corporate Social Responsibility| Ethical business operation
 Consumer preference is being shifted gradually toward metal and plastic furniture.
 Preference of cheaper products has raised the opportunity of small businesses to gain market
more than before
 Brands are increasing to shift to now promote and campaign for advertisement purposes online.
Overall, the future of furniture industry looks environmentally

friendly.
36
PESTEL Analysis
P E S T E Legal
 The existing Bangladeshi legislation for the furniture industry is quite backdated.
 Patent and Design Act of 1911
 Patent and Design Rule of 1933
 Trademark Act of 1940
 Copyright Act of 1999
 However, because the import of raw materials and export of finished goods fall under traditional
laws, it has been enjoying benefits of the changing and oft-favorable tariff rates.
 More regulations, especially in case of IPR, needs to manifest, as well as targeted labor laws and
standardized wage rates.
Overall, the laws and regulations governing the furniture

industry needs revamping 37
Threat Industry
Power of Power
argaining New Competition
Entrants
ee producers
sizable economies of scale
are in Rivalry in production,
increases when buyer demand is Porter's Five Forces
5
on, advertising,
relation orgrowing
other activities:
to the available slowly or
supply: High .
declining: Weak.
Model
nts have
hat otherthe
enhance hard to replicate
Rivalry costasadvantages
increases it becomes less costly for
entrants:
rdized High. buyersistoweak:
or differentiation switch brands: Strong.
rs
s tohave
ofing
. loyalty
to to
strong
switch  brand
their
competing
Rivalrypreferences
Low
seller:sellers. become
brands
Moderate.
4
increases asandthehigh
products of rival
or less strongly differentiated:
w: Strong.
and other andforms of intellectual property
3
ge companies
sn to:
in areStrong
number . Low
in place:
relative Rivalry is more intense when industry
. the number
to
members have too much inventory or
e some products:
ppliers’ significant
strong “network amounts
effects” of idle production
in customer
Low . the product capacity, especially if the industry’s product
about offerings of
equirements
ers
entails high fixed costs or high storage costs:
nd quality, prices, buyer reviews)
Strong
are high:
ion of(ansuppliers:
indicator ofHigh. .
markup): 2
 Rivalry
e restrictive regulatory increases
policies: Lowas. the number of competitor
1
increases and they become more equal in size
creases when buyers are earning
and capability: Moderate.
ome: Weak.
Risk Status for Brothers
Force
Furniture
Porter's Five Forces
Model
Competitive Rivalry High
Threat of New Entry Low
Threat of Substitute Medium
Buyer’s Power Medium
Supplier’s Power Medium

Thank You

Business Strategy (W-650) : Date: March 07, 2020 Presented by - Group 4

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Business Strategy (W-650)

Date: March 07, 2020

BROTHERS FURNITURE LTD.

Date: March 07, 2020

Story of Brothers Furniture

*BFIOA - Bangladesh Furniture Industries Owners Association

Story of Brothers Furniture

 To provide customer satisfaction with competitive price

Brothers Furniture Today

Visionary Management Modern Designing …and craftsmanship

 500 craftsmen and 30 to 40

 Mission of Brothers Furniture is “Growth through service”.

 Vision of the company is “Dedication to the highest quality of customer

BFL’s Strategy Analysis

Broad Differentiation in Terms of Product

BFL’s Strategy Analysis

Fit Test Competitive Advantage Performance Test

BFL’s Strategy Analysis

Corporate level Business Level Functional Level

Cost Efficiency Model

Cost Efficiency Model

Cost Efficiency Model

Supply  Local items: from local

Cost Efficiency Model

BED Almirah Divan

Sofa Dining table Work station

TVC.. BROTHERS- better than others

 One of the leading players  Considered to be the  Came late in the

 One of the largest manufacturing  One of the pioneers in

 Strong brand name

 Lack of patent protection: anyone can copy the product

 Demand for Eco friendly product

 Shifts in consumer tastes

Tax and Tariff policy

 Since 2004, Bangladesh averaged a GDP growth of 6.5%, seeing major

 Bangladesh's Annual Household Expenditure per Capita reached 591.949 USD in

In respect of the economic factors, is FAVORABLE nationally,

In summary, there is FAVORABLE sociocultural support for the furniture industry of

Overall, there is FAVORABLE technological support for growth of the furniture

Overall, the future of furniture industry looks environmentally

Overall, the laws and regulations governing the furniture

Threat of New Entry Low

Threat of Substitute Medium

Buyer’s Power Medium

Supplier’s Power Medium

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