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1. About Brothers Furniture Limited

The Brothers Furniture Ltd was established in 1985. It has only three branches that are located in Gulshan, Uttara and Baridhara. The furniture company employees over 150 full-time employees with its annual turnover US $52, 00, 000. The company manufactures wooden furniture and machine made wooden door, doorframe, stair rail, molding bit, wooden floor, kitchen cabinet etc. The Brothers Furniture Ltd has good technical skills and marketing experiences that have been praised in different international trade fairs at home and abroad. As a result sophisticated machines and technology have been introduced in their Shahjadpur, Gulshan factory to cope with the demand of the customers. Nonetheless, in the recent years the company is facing fierce competition from other branded and non-branded furniture retailers.

Brothers Furniture Ltd. is a name that is synonymous with fine quality Victorian and Modern productions. Their professionals have a combined experience with furniture productions of over three decades. Their technical skills and experiences are not only limited within the territory of Bangladesh, rather it has broadened throughout the whole world. The sales and decorating staff have only but one mission, to assist and help customers to become a satisfied client. They are dedicated to provide you with proven expertise with customers fabric coordination and finish selection.

Their production coordinators strive to have a quality product produced in a timely and efficient manner. In the unlikely event a defect is found, customers complete satisfaction in quality and workmanship is guaranteed. Increasing demand for their wooden home and office furniture and machine made wooden door, door frame, stair rail, molding bit, wooden floor, kitchen cabinet etc. made them one of the dominant player in the stream line companies. There are one of the very few among Bangladeshi furniture manufacturers experiencing export business which gives them opportunity to achieve an international quality.

Brothers Furniture Ltd. guarantees customers two things: First, Their prices are guaranteed to be the competitive most. Second, they guarantee customers satisfaction in quality and workmanship.

2. Current Situation of Furniture Industry of Bangladesh

Traditionally furniture in Bangladesh developed as cottage based industry. It is in early 90's when the furniture industry in Bangladesh transformed from cottage based industry to mechanized mass production oriented industries. Since then furniture businesses began to grow with modern machinery, innovative designs and use of diverse materials.The main varieties of furniture are produced from wood, processed wood, melamine board, Medium Density Fibre Board (MDF), particleboard, steel etc. At present Bangladesh is producing wide variety of international standard and quality furniture. People in Bangladesh are now choosing local furniture instead of foreign furniture.

The export of furniture and allied products from Bangladesh has started from 1995. Furniture is a labor intensive sector and Bangladesh hasa large low cost manpower which is a vital factor in becoming competitive in the world market. So, there is good potential for export of furniture and Bangladesh's furniture industries are ready for that. It is estimated that, by 2015 Bangladesh will earn export potential of crafts furniture accessories worth of USD 10 million along with furniture worth USD 40 million.

At present two relevant associations i.e., Bangladesh Furniture Export Association and Bangladesh Furniture Industries Owners Association (BFIOA) are actively working on materializing the potential of this sector. Bangladesh Furniture Export Association (BFEA) has 12 members. The government of Bangladesh has declared the furniture industry as a 'Thrust Sector'.

At present about 41,560 enterprises and nearly two lakh skilled and semi-skilled people are engaged in this sector. On average 60% of raw materials of furniture sector are imported from different countries. Of those, timber, wood coating materials, hardware & accessories, world class fabrics etc., are major importable items. This sector has some mentionable problems such as high import duties of some raw materials like good fabrics, finishing/coating materials, hardware & accessories, shortage of electricity/gas etc.

Scarcity of skilled manpower in handling modern equipment and machinery is limiting the prospect of growth of this Industry, which can be addressed through setting up more Technical Schools with a curriculum of short-term trade courses, where along with government initiatives private sectors should also come forward.

Furniture is one of the most rapidly growing sectors in Bangladesh, graduating in the last 15 years from a cottage-based to a manufacturing industry. The manufacturing of wooden furniture accounts for 0.29% of the countrys GDP, and in 2008-09 the value addition amounted to BDT1.8b with an export volume of USD1.8m .

The industry employs more than 250,000 workers. The sector, growing at 19.5% pa, aims to export USD40m by 2015, along with an additional USD10m in exports of accessories and furniture textiles. This has the potential to increase to USD1b by 2020 provided productivity increases, market linkage improves, and compliance standards are met. The effective demand-supply gap in the domestic urban market by 2014 is estimated to be USD60m.

This is a highly labor-intensive industry, and consists mostly of small and medium enterprises (SMEs). It is organized into 121 urban and peri-urban clusters, comprising 9,913 enterprises, out of which only 35 can be identified as large firms, while the others are small and medium-sized, employing less than 150 employees. However, the industry is represented by another 74,926 freelance carpenters and carpenters' households, where between one and three labor work independently. Those involved have usually migrated from rural areas, and can initially expect to earn BDT1,500 per month, which increases to BDT8,000 or more per month as skill level and experience grow. Furniture has the potential to play an important role in favor of the poor, as growth in this sector can increase income for small enterprises, and at the same time can generate higher income for existing and new workers, as the sector offers both conversion and absorption of laborers.

3. Situational Analysis

Situation analysis refers to a collection of methods that are used to analyze an organization's internal and external environment to understand the organization's Industry and competitive condition and competencies, capabilities, resource strengths, weaknesses and competitiveness. This mainly considers two things. Companys external or macro-environment Companys internal or micro-environment

Situational analysis is the process of gauging the position, situation and circumstances that a company is operating in at a given point in time. It assists in planning for the future of the business and to find out the competitive position of the company. A situational analysis is the process of identifying and evaluating existing internal and external elements that may impact an organization's ability to achieve its objectives.

While a situation analysis is often referred to as the "3C analysis", the extension to the 5c analysis has allowed businesses to gain more information on the internal, macro-environmental and micro-environmental factors within the environment. The 5C analysis is considered the most useful and common way to analyze the market environment, because of the extensive information it provides. The 5-c are company, competitors, customers, collaborators and climate. For the better understanding of these five c we use different tools like SWOT analysis, PESTEL analysis and Poters Five Forces Model.

3.1 PESTEL Analysis

PESTLE analysis is in effect an audit of an organizations environmental influences with the purpose of using this information to guide strategic decision-making. The assumption is that if the organization is able to audit its current environment and assess potential changes, it will be better placed than its competitors to respond to changes.

3.1.1 PESTEL Analysis of Brothers Furniture Limited

Political Factors Complex Political Environment: The political environment of the country affects the day to day operations of Brothers Furniture Limited. Bureaucracy: Due to bureaucratic government structure it is time consuming for Brothers Furniture Limited to get any kind of government permission or license Security and social welfare policies: The security and social welfare policy is very poor in our county therefore Brothers furniture limited has to take proper precaution and planning before opening new showroom or factory location. Taxation policy: The local taxation policy deter minds how much profit the Brothers Furniture can make after Tax and make the industry attractive Political unrest: The frequent political unrest in the country brings in difficulty in business operations and financial loss for Brothers Furniture Limited

Economical Factors Cost of Labor: Low cost of labor of Bangladesh gives a competitive edge to Brothers Furniture Limited for outsourcing or foreign export Economic growth: The economy of Bangladesh is a growing economy therefore the furniture industry will boom with the economy of the country Inflation Rate: High inflation rate in Bangladesh increases the price of raw materials thus affect the price of the finished products price of Brothers Furniture Limited Changes in Global Economy: Since Brothers Furniture Limited is an export oriented company the changes in global economy affects the export policy or decision of Brothers Furniture Limited Monetary Policy: The monetary policy of government has affect on the foreign exchange rate which affects price of imported raw materials and exported products

Social Factors Demographics and Social diversity: Due to the demographics and social diversity the customers preference varies. Therefore while designing the product Brothers Furniture Limited has to keep in mind to what social segment they are catering to make the product desirable. Lifestyle preferences: Due to lifestyle preferences the consumer behavior towards a product depends. Therefore Brothers Furniture Limited has to keep their customers lifestyle preferences while position the products and making promotional decisions. Levels of education: Level of education helps the customers make informed decision about the products and they customers can compare the product features properly before making purchase decision. The level of education of the Bangladeshi customers over all is not very high. Still the market segment that Brothers Furniture Limited caters to are educated enough to understand what the company is doing special with their product so that they can make better choice.

Technological Factors Technological Changes: The technology is changing very frequently worldwide but keeping pace this technological change is very expensive for Brothers Furniture Limited Technological Know How: The technical knowhow is not very common in Bangladesh. Therefore for Brothers Furniture Limited has to train most of the new employee about the technologies that they use and it is also very difficult to replace or fill vacancy of a skilled labor. Availability of Technology: Even though there are many modern technology is available globally which will make life of Brothers Furniture Limited very easy , the company cannot adopt those due to increased capital expenditure and non availability of technical expertise.

Environmental Factors Climate issues: The climate or weather of country determines what kind of seasoning Brothers Furniture Limited has to do for their wooden products. Environmental protection issues: Environmental activist group of Bangladesh and abroad raise awareness against the use of timber for furniture and encourages the use of non wood furniture which is not favorable for Brothers Furniture Limited Pollution and Recycling: There is environmental law in Bangladesh which Brothers Furniture Limited has to follow to maintain business operations in the country. But there is no proper implementation of the law. Therefore Brothers Furniture Limited can be a little relaxed in abiding law for pollution and recycling.

Legal Factors Labor Law: As Brothers Furniture Limited in a business which is highly labor dependent, the company must follow the labor law of Bangladesh and ILO to maintain minimum standard of work environment. Copyright Law: The copyright law of Bangladesh gives companies like Brothers Furniture Limited protection against their creative designs. But we do not see any such implementation of that law in reality. Customer Protection Regulation: Consumer rights are legally protected worldwide. Though Bangladesh has very less implementation of such law the global market strictly protects the consumers rights. Therefore to export globally Brothers Furniture Limited has to follow the customer protection regulations. Import and Export Policy: The import and export policy of government affects the purchasing decision of raw materials and product sales in foreign market ofr Brothers Furniture Limited

3.2 SWOT AnalysisA SWOT analysis is a structured planning method used to evaluate the strengths, weaknesses, opportunities, and threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.

Strengths: characteristics of the business or project that give it an advantage over others. Weaknesses: characteristics that place the business or project at a disadvantage relative to others Opportunities: elements that the project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or project

SWOT analysis aims to identify the key internal and external factors seen as important to achieving an objective. The factors come from within a company's unique value chain. SWOT analysis groups key pieces of information into two main categories:

internal factors the strengths and weaknesses internal to the organization external factors the opportunities and threats presented by the environment external to the organization

3.2.1 SWOT Analysis of Brothers Furniture Limited Strength Striking new modern designed wooden furniture Highly skilled, devoted, capable and dynamic human resources Strategically located factories in the city to meet instant need of customers Prepared to cater the local and foreign market Well established brand in the local furniture industry Strong retail network Participation in different fairs at home and abroad brought in more awareness among the customers Sophisticated Machines helps to meet customers increasing demand.

Weaknesses Decreasing demand for traditional wooden furniture Not very well known in foreign market. Suppliers are more powerful as the most of the raw materials are coming from abroad No innovative marketing communication done to attract more customer

Opportunities Big potential market at home and abroad Established dominant competitors present in market Low cost labor can be a competitive advantage while penetrating foreign market Recent increasing interest of buyers about local furniture brands

Threats Cheaper substitute readily available in market Low price and availability of non wood furniture in the market are getting popular Poor infrastructure like transport increasing the price of raw materials and finished goods

3.3 Five Forces Model of Competition

Five Forces Model of Competition is a framework for industry analysis and business strategy development. It draws upon industrial organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability.

3.3.1 Five Forces Model of Competition of Brothers Furniture LtdRivalry among existing firms

It is intense in the local market of furniture and the major players in the industry include Otobi, Partex Furniture, Akhter Furniture, Navana Furniture, Hatil, Nadia etc. . However, there are lots of non brand furniture shops as well but they are not as big as Brothers Furniture Ltd. The major players in the market mostly cater to similar market segment and all has similar distribution channel. The competition is very fierce as the customers are very much price sensitive and quality is a very big factor.

Risk of entry by Potential Competitors

New entrants to an industry can raise the level of competition, thereby reducing its attractiveness. Furniture is one of the most rapidly growing sectors in Bangladesh, graduating in the last 15 years from a cottage-based to a manufacturing industry. The manufacturing of wooden furniture accounts for 0.29% of the countrys GDP, and in 2008-09 the value addition amounted to BDT1.8b with an export volume of USD1.8m. The threat of new entrants largely depends on the barriers to entry. High entrybarriers exist in some industries whereas other industries are very easy to enter. In the furniture market the barriers to entry is not very high therefore new competitor can easily challenge the existing players.

Threat of Substitutes

The presence of substitute products can lower industry attractiveness andprofitability because they limit price levels. The threat of substitute products depends on:- Buyers' willingness to substitute- The relative price and performance of substitutes- The costs of switching to substitutes. Brothers Furniture Ltd makes quality wood furniture which is quite reasonably priced. But it seems high priced to the middle class and lower middle class people. Therefore they move towards noon wood furniture or cheaper low quality version of wood furniture. The upper class or upper middle class are more into buying local furniture brands now a days but still a big portion of that group prefer imported furniture.

Bargaining Power of Suppliers

Suppliers are the businesses that supply materials & other products into the industry. The cost of items bought from suppliers (e.g. raw materials, components)can have a significant impact on Brothers Furniture Limited's profitability. If suppliers have highbargaining power over a company, then the company's industry is less attractive. Thebargaining power of suppliers will be high when- There are many buyers and few dominant suppliers- There are undifferentiated, highly valued products. The local suppliers are very much available and they are not very much powerful. But foreign suppliers have some bargaining power over the Brothers Furniture Ltd.

Bargaining Power of Buyers

Buyers are the people / organizations who create demand in an industry. Thebargaining power of buyers is greater when there are few dominant buyers and many sellers in the industry and the products are standardized. This is the situation in case of Brothers Furniture Ltd.

4. Conclusion:Branded furniture market in Bangladesh is extremely competitive market. Here high level of competition among the market players. Consumers are more powerful in this market because they have lot options to choose for. The government has declared the industry as thriving sector. There are supports for the small and medium enterprises from government and NGO but the big contributors like Brothers furniture limited does not receive any kind of government or non government support. Therefore the success story of Brothers furniture is backed by their performance, integrity, quality and creativity. 15