Usa Furniture Manufacturing Industry
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Executive Summary
The following report is providing a overview of the furniture manufacturing company Adorn expanding its sales operations into a foreign country and the consequences of such a decision.
The assignment covers:
The decision to go global and how to Adorn should choose which country to expand its operations into. Discussed are such aspects as G.D.P. and demographic trends
The U.S.A. is the proposed country to expand into.
With this, data was gathered from many different sources to analyse the country and trends of the U.S. economy. Analytical tools such as P.E.S.T., S.W.O.T. and Porters Diamond Model are used to better understand the environment with in the U.S. and how Adorn needs to adapt to those markets.
Also the ease of doing business with in the U.S. with regards to the relative ease of setting up and doing business within the U.S., compared to other countries.
The furniture industry and its future is discussed in depth with regards to local manufacturing industry, imports and consumer changing perceptions within the United States.
Finally considerations such as regionalism, e commerce and international terrorism and the impact on global expansion
Contents Page
Introduction
Reasoning for considering Globalisation of Adorn
Analysis of Globalisation
Demographic Trends
2.2.1
Population
2.2.2
Culture
Proposed Country
The United States
P.E.S.T.
3.1.1
Political – legal environment
3.1.2
Economic environment
3.1.3
Socio – cultural environment
3.1.4
Technological environment
3.1.5
Other
S.W.O.T. of setting up operations within US
3.2.1
Strengths
3.2.2
Weaknesses
3.2.3
Opportunities
3.2.4
Threats
National competitive advantage
3.3.1
Factor endowments
3.3.2
Demand conditions
3.3.3
Related support industries
3.3.4
Corporate strategy, structure and Rivalry
3.3.5
Other influences
3.3.6
Concerns regarding this model
3.3.7
Conclusion of the Diamond Model
Demographic trends
3.4.1
U.S. Workforce
3.4.2
US Education
Treaties
Trends within the United States furniture industry
3.6.1
Change in perceptions:
3.6.2
Economic changes within the furniture industry
3.6.3
Imports
3.6.4
Future trends
3.6.5
US Imports
Additional considerations
Regionalism/ integration
E commerce
International terrorism
Conclusion
List of references
Appendices: List of Tables
Appendices: List of Figures
Introduction
Adorn is a furniture manufacturer that is producers to clients specifications. It utilises highly automated processes development and production of its products,
Adorns core competencies and competitive advantage include high automation of manufacturing processes, producing specialised and well designed furniture for the user in practicality and style.
1 Reasoning for considering Globalisation of Adorn
With the current global economic recession it would be advisable to enter foreign markets with the intention of sustaining or increasing the organisations profits through increasing the companys market base and sales.
Taking a more proactive stance to the slowdown in demand would be following in Nissan South Africas successful approach of increasing sales through globalisation.
As reported by Ndundu Sithole (2009);
“”Nissan South Africa will boost production and expects to increase its local market share despite a domestic and global economic slowdown, managing director Mike Whitfield said. Local car sales have been in negative territory in the past 18 months, falling by 30.1 percent in March, and the global slump has slashed vehicle exports.
Nissan S.A. expects new product lines to boost output to about 40,000 units from 28,000 in 2008. He said the company was exploring further production opportunities in countries such as Angola and Nigeria. “Our market share came up to around 7.5 percent last year on the back of some lack of products in certain key segments. This year we expect to be just over 8 percent which means we are in a growth phase.” Thousands of jobs are on the line in the automotive industry and vehicle manufacturers and car parts producers have approached the government for loans. Whitfield said Nissan S.A. had escaped the worst, but was not unscathed and has shed 180 jobs.””
Globalisation could be attained through the companys comparative advantage of low cost and high automation combined with a well planned and implemented strategy.
Analysis of Globalisation
There