Palliser Furniture Ltd
Palliser Furniture LTD.
1. What are the key global factors influencing the “competitive landscape” for furniture in North America at the end of the case?
The shift of competitive structure for furniture in North America is noted in the case based on the following facts:
⇨ Shift of competitive structure of the furniture market i. China accounting for approx. 40% of the U.S. furniture imports with more and more firms setting up businesses in China ii. Development of manufacturing facility in low-cost sourcing destinations like China iii. Competition from Taiwan firms for home furniture in the U.S. markets iv. Competitiveness resulting from NAFTA for setting up manufacturing locations in Mexico or China
The key global factors influencing the competitive landscape for furniture in North America are:
⇨ Availability of low cost destinations. The drivers of this factor were: i. Availability of Cheap Labor in China ($3 per day) to compared to U.S ($40 per day). ii. No income tax and social costs such as health and insurance in china. iii. Negligible union issues or union pressures and hence no associated cost. iv. No environmental issues and hence no associated costs with leather furniture production in China. v. Efficiency of people in china was higher than people in Mexico and North America as they used to work for more than 10 hours a day. vi. Decrease in market share and margins of firms operating in U.S. ⇨ Availability of comparable product quality and design in low cost destinations. The drivers of this factor were as follows: i. Furniture manufactured in Mexico was perceived to be of almost similar quality as of U.S. vis-à-vis furniture manufactured in China. ii. Provision of specialty products and a complete house hold furniture solution to customers
1. What are the key global factors influencing the “competitive landscape” for furniture in North America at the end of the case?
The shift of competitive structure for furniture in North America is noted in the case based on the following facts:
⇨ Shift of competitive structure of the furniture market i. China accounting for approx. 40% of the U.S. furniture imports with more and more firms setting up businesses in China ii. Development of manufacturing facility in low-cost sourcing destinations like China iii. Competition from Taiwan firms for home furniture in the U.S. markets iv. Competitiveness resulting from NAFTA for setting up manufacturing locations in Mexico or China
The key global factors influencing the competitive landscape for furniture in North America are:
⇨ Availability of low cost destinations. The drivers of this factor were: i. Availability of Cheap Labor in China ($3 per day) to compared to U.S ($40 per day). ii. No income tax and social costs such as health and insurance in china. iii. Negligible union issues or union pressures and hence no associated cost. iv. No environmental issues and hence no associated costs with leather furniture production in China. v. Efficiency of people in china was higher than people in Mexico and North America as they used to work for more than 10 hours a day. vi. Decrease in market share and margins of firms operating in U.S. ⇨ Availability of comparable product quality and design in low cost destinations. The drivers of this factor were as follows: i. Furniture manufactured in Mexico was perceived to be of almost similar quality as of U.S. vis-à-vis furniture manufactured in China. ii. Provision of specialty products and a complete house hold furniture solution to customers