The Household Furniture Industry - Term Paper Example

? Project Program February 21, Project Program The household furniture industry is a potential investment opportunity because of its trend in the growing domestic market and availability of the international market. I, in this paper, present part of my business plan for establishing an enterprise, Golden Furniture, in the industry. The business will be a private limited company with a semi-structured management system and transformational leadership style. It will rely on creativity and innovation for product development together with a market oriented organizational culture towards competitive advantage. Background This project undertakes to offer a business plan for an entrepreneurial venture in the household furniture industry. The business plan will be completed in sections and this project presents the first section of the business plan. The proposed project, for which this business plan is written, is an entrepreneurial venture in the country’s household furniture industry that offers a viable business opportunity in both the United Kingdom’s domestic market and in major international markets. The enterprise will first be established in the United Kingdom’s capital city, and its independent branches established in other parts of the United Kingdom and other countries. In the United Kingdom, the industry projects positive prospects with expanding market capacity. The domestic market has grown over the past decade except in 2008 and 2009 when major world economies suffered from recession. The trend in growth, however, resumed in 2011 and 2012 and this identifies confidence in availability of market for the proposed product. The industry’s scope is also wide with different types of commodities, types of houses and types of rooms, for offer. Types of rooms that offer the greatest demand for furniture are living room, dining room, bedroom, and kitchen, all of which have depicted increasing market potentials (Keynotes, 2013, p. 1). The market also identifies a good opportunity for an innovative approach because consumers are developing a trend of renovating their furniture as opposed to new purchases. While this may appear as a barrier to success in the market, consumers have retained their desire to communicate their social status through their property, and this means that an outstanding innovation that portrays high social standards will attract high demand for services. Highly perceived utility levels in newly invented brands of furniture will also attract new purchases. The industry’s projected growth also promises availability of market despite the existing competition from both domestic and international markets (Keynotes, 2013). The industry also has extensive market opportunities in developed countries such as the United States that has not been able to meet its household furniture demand from its domestic productions. For example, the past two decades have identified an increasing trend in the nation’s importation of furniture. Importation of “nonupholstered” commodities has increased from a bare 20 percent in the early 1990s to a more than 60 percent record reported in 2008. The current percentage is most likely higher with expected positive trends. Importation of upholstered furniture in the same period increased from 5 percent to almost 30 percent (Buehlmann & Schuler, 2009). The market in the United States is also indiscriminative against foreign products, but values developed image by exporting countries (Buehlmann, Bumgaedner, Lihra, & Fryer, 2006). These factors, therefore, identify available market for the household furniture project, both domestically and in other developed countries. I also prefer the project because the wide scoped market that underscores unfair competition offers room for product differentiation through innovation. Introduction The enterprise, Golden Furniture, will operate as a private limited company. Its scope of operation will include designing household furniture products and producing the designed products. It will also, based on consumers’ tastes and nature of consumers’ commodities, design necessary renovation applications to furniture, and implement the ideas. The proposed legal form of Golden Furniture, however, identifies diversified issues in its establishment and operations. The first set of involved issues in the proposed project is the organization’s features that define its formation, composition, scope of operations, legal obligations, and rights. Golden Furniture will operate as a separate legal entity and will, therefore, be liable for obligations that accrued on its behalf. It will also be able to enforce rights acquired on its behalf. The entity will also be able to own property in its name and such property will include developed products for sale, acquired raw materials, intellectual property from its registered innovations, and property that the entity will acquire on lease. The entity will similarly interact with customers as an independent personality and any claim on sales will be made against the entity’s name and not against names of its founders or stockholders. Further, the enterprise will be responsible for its liabilities and its shareholders will share its proceeds, or the proceeds will be ploughed back into its capital. Its stockholders will further run it in a democratic manner of equal power of votes per stockholder. It can also have a single stockholder (Shakespeare, 2011). The scope of Golden Furniture enterprise, and its legal environment also identify advantages and disadvantages that it will face it its operations and which must be anticipated for successful management. The proposed form of business organization does not restrict its size and will allow the project to be established on a small-scale basis and slowly expanded to capture a wider market base. The enterprise will also be able to raise a large amount of capital because of its wider capital base, through sales of shares or business integrations. Its other advantage, which is derived from its existence as a separate legal entity, is provisions for limited liabilities which mean that stockholders will never be held liable for the entity’s liabilities unless otherwise expressly stipulated or unless the liability is accrued from a stockholder’s gross misconduct. The organization, however, anticipates disadvantages such as high costs during formation and the need to operate standardized accounting systems. While the legal environment will regulate the enterprise’s scope and operations, it also protects the organization and its stockholders from unfair practices by other parties to the business environment. Such parties include customers who may dishonor terms of their contracts with the business and competitors who may infringe the organization’s rights such as rights to intellectual property. Other parties, against which the legal environment will protect the enterprise, are suppliers who may breach their contracts with the enterprise and the general members of the society who may infringe the organization’s rights under civil law (Shakespeare, 2011). Vision Statement The Statement Golden Furniture’s proposed vision statement is, “Our production and sales personnel will continually work to ensure that each of your single expectations is met and that you derive full utility from your purchases from our company.” Process of Developing the Vision Statement The vision statement has been developed from an informal research process that was conducted among potential customers. The aim of the research was to establish customers’ most valued expectations from a service provider and to apply the research findings in aligning the proposed business’s long-term goals with customers’ desires. Research participants were asked how they expect a service provider to meet their needs in the household furniture industry, the level of quality of services and goods that they desire, and their desired degree of competence from attendants. Their responses were then analyzed qualitatively, merged and translated into the vision statement. Analysis of the Process and Supporting Details The approach to deriving the vision statement is suitable and is likely to achieve objectives of a vision statement. Having been derived from consumers, the statement is likely to identify with the target market that will be influenced to have confidence in the organization. This is because of the statement’s correspondence with their expectations. The approach also develops an inspiration for employees who will not mistake the vision for unrealistic theory from the organization’s management but understand it as a reality from customers. Available data from research have been preserved for reference purposes. Analysis of the Vision Statement The developed vision statement for the proposed business is sufficient to meet its expected benefits. The approach of deriving expectations from the consumers meets a vision statement’s need to relate to the target “community members’ core values” (Flint, 2013, p. 217). The vision statement also identifies a common objective to be pursued by the organization’s members and promises consumers a shift from what they currently receive from the market to what they exactly need. It also offers a basis for mobilizing the organization’s resources towards achieving the identified long-term objective – a factor that makes it suitable for application (Flint, 2013). Mission Statement The proposed mission statement for the organization is expressed bellow, “We are committed to effectively and efficiently using our resources to deliver top quality household furniture to our esteemed customers.” Development Process The mission statement was developed through a collective initiative between individuals who have subscribed to be stockholders of the proposed business. The team met and deliberated on key concepts of the mission statement and then appointed two of the group members to refine the statement. Analysis of the Process and Supporting Details The process was comprehensive and developed a precise and objective oriented mission statement. Minutes for the developmental process were documented to facilitate future review of the statement. Analysis of the Mission Statement The mission statement is appropriate because it meets the fundamentals of a mission statement that should identify what an organization does, beneficiaries of the organization’s initiatives, and the organization’s operational approach (Holston, 2011). The mission and vision statements will be communicated a sign post at the organization’s locations and in each of the organization’s advertisements and circulars to employees. The Leadership (Management): Team and Human Resource Management Golden Furniture’s management will be organized into a simple structure with three levels of management. At the top of the structure will be the general manager with assistance from two line managers, production manager and sales manager. The two departments will however operate in teams under an unstructured system. This unstructured approach at the bottom of the organization will aim at facilitating creativity and innovation among the employees. The general manager will have a Masters degree in business administration and at least five years of experience in managing a production unit. The line managers will be required to have at least a Bachelors degree in commerce and at least two years of experience in a managerial position. The required academic background and experience will facilitate proper management towards achieving the project’s objective of penetrating the domestic market and expanding to international markets. This is because the academic qualification will identify the personnel’s potentials and their experience that will be evaluated to identify their probability of utilizing their potentials to spearhead the project’s success. The managers’ experience in the furniture industry will further be necessary to facilitate their influence over innovation and product development. The managers at both levels of administration will apply a transactional leadership style in the organization. Empowerment and motivation aspects of the leadership style will facilitate creativity and innovation among the organization’s employees to develop new products and renovation services, and this will boost the organization’s chances of gaining market control. The leadership approach may, however, not be effective in situations that require urgent and dynamic measures. It may also be ineffective if the organization’s employees are not cooperative with the management (Lang, 2011). The rest of the organization’s human resource will be recruited on by individuals’ technical skills, experience in the furniture industry, and successful demonstration of creativity, innovation, and the ability to work in teams. All employees will further attend continuous training seminars on their respective roles in the organization. Changing staff, failing to find appropriate employees, or employee mobility will most likely hamper the organization’s continuous output, lead to shortage of products and may be lead to loss of customers. Both basic wages and rewards will be used to compensate the employees for their inputs to the organization. Creating good working conditions and proper remuneration and reward approaches will be used to manage employee mobility. Organizational Culture Golden Furniture plans to develop a market oriented organizational culture. This culture promotes behaviors and initiatives for developing highly valued products for consumers. This further establishes an organization’s image towards its competitive advantage over its competitors who may not be able to meet such high standards of quality. Creativity and innovation will be the fundamentals of the culture together with an organization’s motto that customers are priority. The culture is likely to succeed in the organization because of the transformational leadership approach and freedom among employees, which is expected to promote innovation into quality products that satisfy customers (Ferrel & Hartline, 2010). References Buehlmann, U., & Schuler, A. (2009). The U.S. household furniture industry: Status and opportunities. Forest Product Journal, 59(9), 20-28. Buehlmann, U., Bumgaedner, M., Lihra, T., & Fryer, M. (2006). Attitudes of U.S. retailers toward China, Canada, and the United States as manufacturing sources for furniture: An assessment of competitive priorities. Journal of Global Marketing, 20(1), 61-73. Ferrel, O., & Hartline, M. (2010). Marketing strategy. Mason, OH: Cengage Learning. Flint, R. (2013). Practice of sustainable community development: A participatory framework for change. New York, NY: Springer. Holston, D. (2011). The strategic designer: Tools & techniques for managing the design process. Cincinnati, OH: HOW Books. Keynotes. (2013). Household furniture market report 2012. Research Markets. Retrieved from http://www.researchandmarkets.com/reports/2363976/household_furniture_market_report_2012. Lang, M. (2011). Transformational leadership. Norderstedt: GRIN Verlag. Shakespeare, K. (2011). Trade for good – The essential guide to business and finance in UK and international trade. Herts, AL: Ecademy Press. Read More