city furniture and mattress pp final
TRANSCRIPT
![Page 1: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/1.jpg)
City Furniture and Mattress
Team Edward: Ashley Clapham, Jacob Curtis, Tara Lappin, Brandon Kew, Marcus Kelly
![Page 2: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/2.jpg)
Presentation Outline• Recommendations• Company Background• Finances• Internal Analysis• External Analysis• SWOT• Strategic Issues• Alternatives• Recommendations• Implementation
![Page 3: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/3.jpg)
Recommendations
Increase the profitability with a long-term focus.
• Vertical Integration• New payment process• Relocate Pickering store
![Page 4: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/4.jpg)
Where does City Furniture and Mattress stand?
Solid groundRun by father and son team:
Baskar and RajeevGoal is to be more profitableTwo Stores open
◦Toronto: great location, $50,400 profits per month
◦Pickering: $700 profits per month
![Page 5: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/5.jpg)
Mission/Vision Statement
“Thiknk of some shit tom.”
![Page 6: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/6.jpg)
Hambrick and FredericksonElements of Strategy
• Arenas◦- Product category: Home furnishings (Living
Room, Dining Room, Bedroom)◦- Market: Lower to middle income ◦- Geographic: Greater Toronto Area◦- Value Creator: Experienced management
team◦-Market Segment: low to mid price (price
conscious)• Ploy
◦- Vertical integration (gives us high margins)
![Page 7: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/7.jpg)
Hambrick and FredericksonElements of Strategy cont.
• Pattern- Low-cost- Style
• Economic Logic◦ - Low-costs through scale advantages
• Plan◦ - Now-3 months: build manufacturing warehouse◦ -3 months-2 years: manufacture from warehouse/pay it off◦ -1-3◦ -2-5 years: Look to build additional stores and outsource
delivery services
![Page 8: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/8.jpg)
Competitive Advantage
• Singh family’s combined expertise in the market along with Baskar’s legacy advantage- Baskar opened first retail furniture store (1986)
- Later opened manufacturing business producing mattresses and living room sets to support the retail area
◦ - Built relationships to allow leverage with business needs
![Page 9: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/9.jpg)
S.E.P.T.
• Socio-cultural Consumer focus on low-cost, rather than brand loyalty
• Economic Interest rates (Loan)
◦ Unemployment◦ Foreign- Low-cost production in Asia
![Page 10: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/10.jpg)
S.E.P.T. cont.• Technological
◦ Information Technology◦ Re-engineering
• Political◦ Taxes (State/Local)◦ Worker Safety◦ Minimum Wage
![Page 11: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/11.jpg)
Porters Five Forces5 Forces in the
Industry Current FutureCustomers 4 4
Suppliers 2 1
Direct Competitors 5 5
Substitutes 2 2
Potential Entrants 3 4
Total 16 16
![Page 12: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/12.jpg)
SWOT Analysis
Strengths Weaknesses• Experienced
managerial staff
• Direct global sourcing experience
• Toronto location
• Subpar profitability because of Pickering location
• Customer service issues with delivery
• Limited inventory space
![Page 13: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/13.jpg)
SWOT Analysis
Opportunities Threats• Vertical Integration
possibility
• People willing to browse many stores
• Entering new markets or segments
• Negative price pressure
• Low barriers to entry
• Fragmented market share
• Tough market to find new workers
![Page 14: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/14.jpg)
Strategic Issues
• Overworked and unhappy delivery workers
• Lack of brand loyalty
• Unsure how to obtain long run profitability
• Demographics outside Toronto vary
![Page 15: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/15.jpg)
Alternatives
• Store Network Expansion
• Expansion of Global Sourcing Program
• Vertical Integration
![Page 16: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/16.jpg)
Store Network Expansion
Advantages Disadvantages
• Past Experience
• Economies of Scale
• Wider reaching media
• Finding trustworthy, capable staff
• Costly investment• Not enough potential
reward for the risk• Staffing Issues
![Page 17: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/17.jpg)
Expansion of Global Sourcing Program
Advantages Disadvantages
• Increased Margins (Higher % of high margin products)
• Connections globally
• Industry trend moving to global mindset
• Inventory Storage
• Significant Financial Commitment
• Product Selection Risk
![Page 18: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/18.jpg)
Vertical Integration
Advantages Disadvantages
• Baskar Singh’s past experience
• Fragmented Industry
• Increase margin by 15-30%
• Long-term profit potential
• Staffing Issue
• Global Sourcing on the Rise
• Non-profitable in the short-run
![Page 19: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/19.jpg)
AlternativesAlternative
sValue Added
Cost Fit Risk Total
Store Network
Expansion
3 2 3 3 11
Increased Direct and
Indirect Global
Sourcing
2 3 4 4 13
Vertical Integration
4 2 5 3 14
![Page 20: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/20.jpg)
Recommendations
• Short Term• Vertical Integration• New payment process
• Long Term• Subcontract delivery services• Relocate Pickering store and staff to better
location• Begin selling to local competitors
![Page 21: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/21.jpg)
ImplementationMcKinsey’s 7 S’s
• Strategy Create increased profitability through margin gains
• Structure Small top down authoritative company that can
adjust to the environment quickly
• Systems Centralized decision making due to the owners
strong background in the industry
![Page 22: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/22.jpg)
ImplementationMcKinsey’s 7 S’s
• Staff Offer internship opportunities Subcontracted delivery Keep experienced personnel
• Style More authoritative and pressing
• Skills Competitive advantage found in expertise of the business
owners in retail and manufacturing of furniture
• Shared Values Passionate and knowledgeable about the family owned
business
![Page 23: City Furniture and Mattress PP FINAL](https://reader033.vdocuments.mx/reader033/viewer/2022061104/540244a5dab5ca0d378b462b/html5/thumbnails/23.jpg)