DAHLIA FURNITURE PRIVATE LIMITED

________________________

A Written Analysis of a Case

Submitted to
LUZ B. UN, Ph.D., M.B.A.

In Partial fulfillment of the Requirements for the Course

BUSINESS POLICY

By

Myrjul P. Emeterio
 I. Facts of the Case

1. Dahlia Furniture, owned by Mr. Chua, Mr. Leong, and Mr. Lim, made its entrance
into the furniture industry in 1972 and supplied mainly wall units and kitchen
cabinets. Bedroom sets and dining sets were subcontracted out or obtained from local
suppliers.
2. Dahlia’s furniture line was of higher quality and price than those of other retailers.
However, the people living near the area of Dahlia’s location were mainly from lower
income group.
3. Aside from the usual local suppliers, Dahlia turned towards imported furniture from
France, Japan, and Belgium.
4. It was perceived by the owners that Dahlia’s clientele are those customers who are in
the middle and upper income group with a taste in western designs. Due to its
imported furniture being displayed, Dahlia’s image improved as a high quality
furniture store.

II. Statement of the Problem

What are the means of acquiring inventories should Dahlia engage in for maximization of
profit and enhancement of company’s position in a highly competitive industry?

III. Objectives
 Expansion of the company’s operational activities
 To maximize profit and increase sales
 To be the leading manufacturer of furniture.

IV. Areas of Consideration

 The furniture industry is highly competitive and it is clearly shown by the recent
advertisements, fairs, and price slashes.

 Dahlia’s furniture line target market is the middle and upper income groups, those
who are willing to pay any amount of money for exclusivity and quality.
  The growing demand for the imported furniture and families who could afford and
were willing to pay for such furniture paved a way for Dahlia to expand in another
market.

V. SWOT Analysis

 Strengths
 High quality of products and elegant image of their furniture
 New division is run by present designers
 Dahlia Furniture is a known seller of imported furniture

 Weaknesses
 Dahlia Furniture has a small market
 It has a limited product line (wall units, kitchen cabinets, bedroom sets and dining
sets)
 Poor management

 Opportunities
 There are growing number of families who can afford and are willing to pay
higher price for a higher quality furniture
 There is a growing demand for imported furniture
 To change the production lines because market supply of modern furniture was
not keeping up with the increasing demand

 Threats
 Other companies that offer furniture for a lower price
 Powerful competitors including foreign manufacturers and retailers in the
Singapore market
 The attitude of buyers toward change
VI. Alternative Courses of Action

1. All products will be imported with a high quality and continue to establish a fairly
expensive image with middle and upper income family’s clientele.

Advantages
Importing can mean higher-quality
products.
Importing grants access to regionally
exclusive resources.
Comparative advantage means lower-
priced goods.
Many governments actively support trade
relations and aim to make importing easy
for your business.
Disadvantages
Importing reduces the economic growth of the
country.
It would be costly, because Dahlia needs to pay
GST (Goods and Service Tax) on imported
goods.

2. Increase its production unit and compete with competitors through lowering of prices to
reach a larger market.

Advantages
More people will buy.
Helps Launch New Product Lines
Disadvantages
Product quality is at risk
Low-price offering reduces your profit margin
and forces you to operate on a low budget
which affects the production.

3. To formulate a proportionate inventory acquisition with some products imported and some
manufactured, to drive away competition and at the same time, maintain its present image,
also to reach all brackets of prospective clientele.

Advantages Disadvantages
Maintains high quality product. More cost, greater risk
 Expand the market of the company
Increase its sales and maximize its profit
Sustain the competitiveness and the
company’s position in the industry.

VII. Recommendation

Therefore, I recommend that the best alternative action is to have a proportionate

inventory acquisition with the imported and manufactured products. In this way Dahlia can
measure which product is more profitable. Producing and importing high quality products can
maximize the profit for the consumers are more willing to buy for the quality. In addition,
furniture industry is highly competitive; Dahlia must step up their game to drive away the
competitors. Using different strategies like product development and market development is just
one way of keeping up with pace of the competitive industry. Dahlia needs to consider different
areas and functions of production to improve the quality product and attain its goals and
objectives.

VIII. Conclusion

As a conclusion, the continuous growing rate of demand for imported products is a one
way for Dahlia to maximize its profit and increase its sales. Singaporeans prefer imported
furniture than locally product furniture. Thus, continuing the supply of imported furniture would
be an effective decision. Implementing the product and market development strategy can also be
a great help towards attaining the objective of the company. Producing new high quality products
at a lower cost paved way to expansion of market. Instead of using the focus approach, Dahlia
should increase the quantity of a specific design for those customers having the same preference.
This strategy will help improve the company’s position.