Strategic tools for the practising manager

The Indian furniture industry is estimated to be worth Rs 35,000 crore. About 85 per cent of this falls into the unorganised sector.

The share of the wooden furniture market is estimated at Rs 60 crore.

The GLOBAL home furniture market is worth about Rs 20,000 crore and during the past three years it grew by 20 per cent a year.

According to a World Bank study, the organised furniture industry is expected to grow by 20 per cent a year, and India, Russia and Brazil are likely to witness a boom.

The range of indigenous furniture available in India includes both residential and contract system furniture, with an increased concentration in office and kitchen furniture.

Currently in India, manufacturers use a three-tier selling and distribution structure "" distributor, wholesaler and retailer.

India ranked first in furniture imports in 2004-05 with a 17 per cent share in worldwide furniture imports. A total number of 10,476 importers were involved in importing furniture in India during this period.

Current imports are mainly from Italy, Germany, Spain, China, Korea, Malaysia, Indonesia, the Philippines and Japan.

The furniture market in India is mainly concentrated in A, B and C type cities (the top 589 cities).

It has been estimated that the top 784 urban centres contribute 41 per cent to the total furniture consumer market. A and B type cities together contribute 33 per cent to the total market.

Selections from management journals
NUGGETS

Last December the Toyota Motor Corporation officially forecast that it would sell 9.34 million cars in 2007 "" which could make it the world's largest automaker.

However, rapid growth and globalisation have created many pressures for the company, and the strain of success is already beginning to show. Two HBR editors interviewed Toyota's president Katsuaki Watanabe and several top executives to learn about the strategies they are developing to cope in the future.

For well over a decade, J D Power and other research firms have consistently rated Toyota among the top automobiles for quality, reliability, and durability. But in 2006, a series of problems with its cars threatened to sully the auto company's reputation.

What's more, speedy expansion to meet demand and the struggle to keep pace with technological change have combined to challenge Toyota's grand ambitions and its famed "Toyota Way." For Watanabe, being number one means "being the best in the world in terms of quality". If Toyota's quality continues to improve, he says, volume and revenues will follow. If problems arise from overstretching, Watanabe wants them made visible, because then his people will "rack their brains" to solve them "" and if that means postponing growth, so be it.

Lessons from Toyota's long drive
Katsuaki Watanabe interviewed by Thomas A Stewart and Anand P Raman
Harvard Business Review,
July-August 2007
Subscribe to the article at www.hbr.com

While most managers would think long and hard before bringing to market a product that lacked patent protection and could be easily imitated, many invest in sales promotions "" sweepstakes, coupons, time-limited price discounts, free gifts or samples, special events, displays, membership rewards, consumer-directed promotions and so on "" that are easier to imitate than the simplest new product.

The authors discuss how to plan profitable sales promotions by considering the stature of the brand in the marketplace, the message being delivered, and how customers and competitors would react.

A strategic perspective on sales promotions
By Betsy Gelb, Demetra Andrews and Son K Lam
MIT Sloan Management Review, Summer 2007, Volume 48, Number 4
Read the article at http://sloanreview.mit.edu/