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Palliser Furniture focuses on producing the great quality furniture for the home and also make valuable products at economical prices. The mission of the organization is to keep up client connections & fully cope-up with the needs of the customers.Produce/sell various home products which include furniture for bedrooms, kitchen and living room. The main target area of company is delivering goods throughout Canada, USA and Mexico.

To become the most wanted furniture Company in all over Canada, USA and Mexico.Bringing the best of furniture items to the homes of their customers and providing satisfaction is the main vision of Palliser furniture. They work together to become one of the most extraordinary furniture retailers in the world. Apart from just making products, they also deliver the products to the customers. These visions highlight their effectiveness and cooperation with their customers to facilitate them to the extent th company can.Performance: the number of customers depend on how we perform our duties in making them available with the best of products. We continuously work towards improving the services we provide, more efficiently usage of our resources.

Responsibility: The condition of the human life can be improved with the successful working of the organizations. We work by following all the business ethics. We use our resources efficiently which reduces their wastage and have a healthy impact on the eco system. We give more emphasis on the security of our clients and the people who represent us.Advancement: As an organization we believe in doing the work with more creativity and with the new ideas. We believe in putting our ideas in our resources and create those ideas in a framework.

Client Care: we give more focuses on the need of our clients and work according to their needs. we work as to make more loyal customers.Employee Satisfaction: we keep an eye on the needs and want of our workers. We work for the betterment of our employees and more development of the administration. We respect our employees and support their ideas and the things they have learned from their past experiences.

Company’s Information

Palliser furniture was established in 1944. The main focus of the company has been on making best quality products for home & customer satisfaction. Since establishment, the main aim of the company has been to expand throughout the Canada, USA & Mexico. This is because they want to attract customers globally to use their products. In this way their business would expand and their productivity would increase. The key milestone of the company is to provide aristocratic and supreme quality furniture in the homes of the consumers. It is the second largest furniture brand in Canada.

Company’s Information:

Company name: Palliser Furniture Upholstery Ltd

Type of business structure: Private (Family owned)

Ownership/management team: Owner/CEO-Peter Tielmann

President: Cary Benson

Vice President of Operations &Engineering: Mark A. Wiltshire

Corporate HR Manager: Cintia Pauls

Location: It is headquartered at 70 Lexington Park Winnipeg, MB R2G 4H2 Canada and it runs it business at different locations in Canada, USA and Mexico.

Vision:

Bringing the best of furniture items to the homes of their customers and providing satisfaction is the main vision of Palliser furniture. They work together to become one of the most extraordinary furniture manufacturers in the world. Apart from just making products, they also deliver the products to the customers. These visions highlight their effectiveness and cooperation with their customers to facilitate them to the extent the company can. The vision for UK is that all the consumers who want to purchase furniture, deserve the best quality at a cheapest price. For this, Palliser wants to be in every home.

Mission:

Palliser Furniture focuses on producing the great quality furniture for the home and also make valuable products at economical prices. The mission of the organization is to keep up client connections & fully cope-up with the needs of the customers. For the UK market specially, it aims to project long lasting conservation of the natural resources and also to deliver the best quality furniture in the homes.

Products Information:

They produce and sell various kinds of furniture for bedrooms, kitchen and living room. They include sofa sets, dining table sets, Lamp shades, TV cabinets, cupboards, shoe racks, book shelves etc.

The number of customers depend on how we perform our duties in making them available with the best of products. We continuously work towards improving the services we provide, more efficiently usage of our resources.

Responsibility

The condition of the human life can be improved with the successful working of the organizations. We work by following all the business ethics. We use our resources efficiently which reduces their wastage and have a healthy impact on the eco system. We give more emphasis on the security of our clients and the people who represent us.

Advancement

As an organization we believe in doing the work with more creativity and with the new ideas. We believe in putting our ideas in our resources and create those ideas in a framework.

Client Care

We give more focuses on the need of our clients and work according to their needs. We work as to make more loyal customers.

Vision

Employee Satisfaction: 

We keep an eye on the needs and want of our workers. We work for the betterment of our employees and more development of the administration. We respect our employees and support their ideas and the things they have learned from their past experiences.

Following are the important values of Palliser Furniture:

Our People – For a long period of time, the Palliser furniture has been a leader in the furniture industry by meeting the design expectations of their customers and making them available high-quality furniture at very reasonable rates. We’re a proud company and are inviting you to experience what it like is to be our loyal clients and what makes us repeat customers.

Our philosophy – The business of Palliser furniture is run on the trust and relationships that we’ve built with our customers over the years and we believe that honesty and credibility are our keys to success. We only work towards the satisfaction of our customers.

Technical Experience – since the start of the company, Palliser furniture has developed a team of great individuals, designers, managers and technicians. These people give our organization the depth required to deal with even the most delicate of situations and fulfill every request of our customers.

Service and Warranty – Even after selling the furniture, we are not done with our clients. We provide them with a 90 days of return policy if they find the product unsuitable to their needs or if they are facing any problems. Any type of requests is fulfilled without any questions as our only aim is to satisfy our customers and help them build their homes their way and style.

Business Objective:

The main objectives of Palliser Furniture in UK are to provide dedicated service to the consumers by supplying them the best furniture at the lowest rates. Further, to provide proper maintenance to the furniture of the consumers. Lastly, to expand its business all over UK, Canada, USA and Mexico.

SWOT Analysis

Strengths

Strong Brand image

Recruit new employees with diverse ideas.

Using new techniques for distribution of the products

Using of quality raw materials

Opportunities

To became the leader in the furniture company

Sell the furniture throughout UK

Increase revenue by increasing sales

Innovation furniture at reasonable rates

Weaknesses

Renovate the products at a reasonable cost throughout the globe.

Limited inventory to satisfy more demand

Less confidence of the consumers

Lack of communication between management and staff in certain spheres

Threats

Economy is not stable in UK

Competitors giving more discounts to the consumers

 Lack of knowledge of improvement among the staff

The climatic conditions create a barrier in the storage

Geographically speaking, the countries of England, Scotland, Wales and Northern Ireland constitute UK. United Kingdom is 500 kilometers in width and almost 1000 kilometers in length. United Kingdom is consisted of 120 kilometers of sea as well. This indicates that UK is the most suitable place for furniture industry to foster. Moreover it possesses ample resources for the raw materials to prosper into the best quality of furniture. A DEPEST analysis on UK and the various factors which might help the Palliser furniture to grow in UK has been made.

DEPEST Analysis

Demographic:

The age structures of United Kingdom are as follow:

Age Group

Percentage in total population

            Income Levels

 Up to $1000 PA

Up to $ 500 -$ 2000 PA

Up to  $ 10,000 - $ 20,000 PA

Up to $ 10000000 PA

Up to $ 500000 PA

0-14 years

17.53

15-24 years

11.90

25-54 years

40.55

55-64 years

11.98

65 and over

18.04

From the above table, there are high probabilities among the population of UK to purchase the furniture from Palliser. The high income groups are generally above 25 years of age. This is the age when people settle to have new homes. They are the promising consumers in UK market.As compared to other countries the economy of UK is relatively stronger. The GDP of UK is high but it has some issues. The positive and negative factors are:

Mission

Positive

It has fifth highest GDP in the world with 7.2% in 2018 and an annual growth rate of 15%, it stands second in Europe after the Germany.

Free market

Small vendors make good profits because of large population.

The rate of foreign direct investment keeps on increasing.

The economy is comprising of both private and public sector.

Negative

The recovery from economic recession is very slow from 2008/2009

Unnecessary expenditure of money on providing free public services & financial aid.

Political 

UK is fair, stable country with lots of opportunities. It is a constitutional monarchy that functions under the order of parliament. Some positive and negative factors are:

Positive 

Politically stable

Proactive government

Divided into local and notional administration

Negative

Hidden corruption

United Kingdom is unsure whether to stay in European Union or not.  

High social standard of UK lead to better all-round circumstances. The positive and negative factors are:

Positive

UK is Heavily populated with 53 million people

Cheap labor because of high population

Living standards are very high

Negative 

Increasing & high dependence ratio

Educational expenses are kept on rising

Technology factors:

UK does have best admittance to the technology. Technological factors which are affecting UK are:

Positive

Expert in information technology & science

Enough internal competition to stimulate development

Innovation skills are of quality.

For intellectual property, they have effective laws.

Technological advancement is very slow as compared to America.

Environmental factors

Economic factors have impacted the environment of UK. However, UK has always tried to minimize the negative effects. UK has faced many environmental challenges through the years. So, the environment can become a hurdle in establishment of the company in UK. But, steps can be taken to minimize the environmental effects.

Porter’s 5 Analysis 

Power of Supplier:

There are ample furniture industries in the market. Consequently, the furniture market has become extremely competitive since there are plenty of alternatives in the market. With so many suppliers in the market and higher demands, the negotiations become low as the suppliers will be replaced easily. Almost similar kinds of furniture are available in the market. Hence, the supplier’s powers have decreased because they are unable to attract the consumers.

Threat of new Entrants:

UK’s speed of development is stable and it has opened many avenues in its market to attract more manufacturers. Due to consistent growth of the established furniture companies in UK, there are new entrants trying to enter the market. The level of competition is increasing.  As the competition increases, due to heavy population growth, the demand of the people has risen. Consequently, the supply has lowered down. Therefore, the threats of new entries between the existing furniture industries are moderate.

Power of buyers:

Palliser furniture will be selling furniture to supply in the homes of the vast amount of people residing across UK. The standard of living of people in UK is very high and they can afford the furniture manufactured by Palliser. It makes furniture of supreme quality to satiate the needs of the high income group population. Hence, the demand for such furniture is high in that level. Some strategies on costing and quality will help Palliser to establish wand grow smoothly in UK.

Products Information

Threat of substitutes:

 However, the threat of substitutes for Palliser furniture still remains in UK. There are many well established furniture companies that providing interior  as well as exterior furnishing such as “Trade secret”, “Get furnished”, “achica”, “Furniture village UK” etc. They stand as a rival to the Palliser furniture. This threat however can be resolved by adopting the accurate strategies of marketing. The appropriate marketing strategies can attract many consumers across the country.

Rivalry

Competitor’s Information:

There are many competitors of Palliser Furniture. These competitors are also from the international market. However, there are few companies that pose a high threat to UK market. So, the rivalry is high between those companies.

Some of companies are listed:

Get Furnished

Way fair Home Furniture

The Sofa and chair company

The French bedroom Co

Nest.co.uk

Conclusion

Detailed analysis of the different factors above provides a broader view and an understanding of the economic structure of UK. After studying DEPEST factors assumes a very bright future for opening furniture business in UK. However, it would be necessary for the company people to be trained of the cultural and social values of the people in UK. The technological & political factors assure a great environmental condition for investing in the furniture industry. There may be high competition from the existing furniture companies in UK. However, there are good political relations of Canada with UK and that can be a positive point in establishment and helping the company to settle in the UK. Talking about the risk return trade off, that is very high as there are very less or snext to zero chances of the company to fail in foreign market. With regular analysis and control, the Palliser furniture with have a very profitable business in UK.

Marketing Objectives

Palliser furniture being a new player in the UK market would focus more on the following marketing objectives for first 18 months.

Palliser should promote its business and provide the best quality furniture at the reasonable rates

Increasing the shares in the market

Aiming to attract new consumers with lucrative offers

Improving customer relationships

Provision of better services to the consumers

SMART Objectives

Specific

The most important thing for any business is that people should be aware of its existence that is people should know its products and services. So the first goal of Palliser furniture will be creating brand awareness. This will be achieved through advertisements on TV, banners and using digital media platform which includes Facebook, Google and other sites. The advertisements give customers more options to choose from. We will be doing marketing ads based on UK location.

Measurable

The primary focus of Palliser furniture is to focus on top 20% customer base in the market. Business is usually measured on a quarterly base and the first 2 quarters will be dedicated for brand awareness. But in 3rd and 4th quarters increasing sales should be the prime target. So, we will concentrate on spreading awareness in the first two quarters and on sales in the remaining two quarters.

Performance

Achievable

We would like to reach out to 4/5th of customers in first 18 months that will help to give us more queries which we would like to convert to sales. This will help us to achieve a customer and we shall try to keep the customer satisfied with our product and service.

Relevant

The goal which we decided should be relevant and in our case the goal we have is relevant. We estimated that it will take one year to create brand awareness but if we resort to ad campaigns on TV and YouTube then we can achieve this goal in a time period even shorter than one year.

Segmentation and Target Market

We divide our markets as mentioned below:

Wealthy achievers: Category 1

A- Wealthy Executives

B- affluent guys

C- Flourishing families

Urban Prosperity: Category 2

D- Professionals

E- Educated urban residents

F- Aspiring singles

Comfortably Off- Category 3

G- Starting out

H- Secure families

I- Settled sub urban

J- Pensioners

Moderate Means: Category 4

K- Asian communities

L- Postindustrial families

M- Blue Collar roots

Hand pressed: Category 5

N- Struggling Families

O- Burdened Singles

P- High Hardship

Q- Inner city adversary

Positioning

Our unique selling point is quality and service and that’s how we are different from rest of the world. We provide world class service which is hard to beat for our competitors. 

Marketing Plan

Products/Branding 

Since 1944, Palliser Furniture Company has been facilitating the people to help them decorate their homes and offices with the best quality of furniture available in the market at a lower price as compared to their competitors. The products that are sold by the company include a whole lot of office furniture like sofas, tables, chairs and the home furniture such as bedroom furniture, kitchen furniture, tables and chairs as well.

Palliser furniture offers three different product lines that are based for the living area, the bedrooms and the kitchen furniture. Palliser furniture make products that is for the customers comfort and make them feel like home. The various products sold by the company are discussed below:

 

Living room:

Sofas

Sectionals

Chairs and Ottomans

Home theatre seating

Sleepers

Coffee tables

Console tables

TV stands

Bookcases

 

Dining Room:

Dining Tables

Dining Chairs & Benches

Barstools

Buffets & Cabinets

 

Bedrooms:

Beds

Nightstands

Dressers & Mirrors

Chests and Armories

Benches

Vanities

Logo of the company clearly defines their thinking towards their customers. It says that people can design their homes by their own way and their own style.

We are going to use the same logo even in UK market & anywhere around the globe.

Pricing

While taking into consideration the pricing of UK as of the 2018 statistics, it can be agreed upon with the fact that the customer base of the business would succeed if they enter the UK market with uniform pricing worldwide. The cost of the furniture should always be reasonable and preferably towards the lower side. In this way, the consumers would remain loyal to the company because a belief would be built among the minds of the consumers.

This would be very helpful in the expansion of the company.  The furniture of the company would be endorsed and the competition in the market would be declined since Palliser would hold a supreme position. As a company, it should mainly concentrate on 25% of the market that gives 75% business in the UK. Because of a highly reputed company in Canada, it has a chance of attracting the top 25% of customers in UK market. It would endorse themselves as “quality matters” in the competitive market. In UK, selling the products at a wholesale price would reduce the price as well as not cause loss to the company.

Responsibility

Marketing Channel and Distribution

Every marketing agent and distributor requires to possess adequate information regarding the furniture Palliser Company, the distribution channel, repair, marketing strategy and the implementation strategies of the Palliser Furniture. These group of people must be educated about the marketing strategies. They should be made aware of every situation arising in the competitive market. Joint meetings and seminars can be conducted to exchange opinions with each other and express the ideas. In this way, the novel ideas of every persons can be expressed and be known. The best idea can be adopted.

Palliser furniture requires to motivate its agents and distributors regularly to make a communication among the staff engaged in the company. Recruiting skilled and efficient labor is expected to happen.

Palliser furniture has a monthly or annually target to be fulfilled. At the end of the year, the sales would be recorded for the accumulation of profits. By comparing the data, distribution channel can be further modified.  Accordingly, the expected target can be achieved and gain profits in the market.

Palliser furniture will deal with intermediaries and dealers, which fundamentally indicates the scale of their lot should be between regular to large size. So, Palliser Furniture will do production in order to meet the demand in the UK market.

Wait time

Palliser furniture will make their mostly all of their products according to the demand from the customer and it takes about 14-15 days to give the final products to the customer including the delivery time. But in some cases, is customer want special design on their products, then it will take little bit time more as it is will be produced in the Canada.

Variety of the product 

Palliser furniture will provide variety of products according the design of their offices, according to the budget of the customers.

After sales service 

In the Palliser company is not only focus to increase the sales it also focuses on services that customer needs after buying the products. We will provide after sale service like door delivery, repairs and maintenance by going to the customer places, replacement of the defective products and so on.

Channel Objectives

Availability of the product 

The main objective of the Palliser furniture is to provide their products to every customer who needs it in every corner of the UK.

Providing after sales service:

To fulfill the service needs of the customers, by giving them best services. Some of the services we are going to provide are:

Dependability (reliability and consistency of delivery)

Cycle time of order (time period from receiving the order, processing it & delivering it)

Convenience (to fulfil the special wants of the customers)

Communication among seller and buyer for providing after sales service.

Promotional support

It means solid support from the network agents and dealers for the company products. It includes promotion of the products by displaying them in the stores, by using social media. By putting them in the special events and by placing hoarding in different places.

Advancement

Information of the market

As the company has intermediaries in the market, they will give the unbiased information in the company about the company product in the market, competitors move in the market, inventory levels & Customers’ reactions.

Effectiveness of the cost: the cost which company incur in order to achieve the objectives of the company should not be too much as compare to the gains of the company.

Palliser furniture can use a mixture of the channels, rather than using the single alternative. By using various type of intermediaries, Palliser furniture can sell their goods & it will also benefit them as intermediaries also have experience of the market.

Exclusive distribution Intermediary

It is a form of selective distribution, in this type of distribution only 1 retailer, wholesaler or distribution is assigned in a definite geographical area. It is the most commonly used form of product distribution.

Joint Venture Distribution Intermediary

It is type of distribution, in which Palliser Furniture can do partnership with any similar type of company in UK as local companies have more good knowledge of the local culture and requirement of the customers.

Traditional Distribution Intermediary

This distribution is also known as the direct channel distribution, in this Palliser furniture can manufacture the products the as per the demand from the customer and can sell those products directly to the final customer without using any intermediaries.

Evaluating Channel Alternatives

Palliser furniture after doing deep study on these various channels’ distribution, they have to select the best channel which will satisfy their objectives for the long run.

Economic or Financial Criteria

Sales and costs produce by each alternative channel is different. The very 1st step is to determine compare the sales done by company own force with the sales agency. Palliser furniture then have to choose the sales agency which is selling more than their own sales force.

Control Criteria

In order to consider the control issues, this criterion can be broadened. Control problem arises when we use sales agency. It is because sales agency are independent firms, they are interested in only increasing their profits. In that way Palliser can lose their control over its own product, however, to have certain control, contracts can be made.

Adaptive Criteria

Palliser Furniture while selecting the one particular distribution channel, it has check whether while that particular channel can be flexible enough so that can they achieve their long-term objectives and goals. They should do 5-year contract and within this period they regularly evaluate the sales done by sales agency and decide whether to do further contract with them.

Selecting Channel Members

By doing evaluation of all the distribution channels alternatives. Palliser furniture has to choose the member for channels carefully as these members are going to represent the company and.

With the help Better Business Bureau (BBB), Palliser Furniture can check the reputation of the members. Selected members for the distribution channels have to provide the information like Credit rating, number of years in business, customer’s review, expertise area, etc.

Client Care

Channel Management

Training

As Palliser Furniture for selling their products using intermediaries and these intermediaries are also providing customer services on the behalf of Palliser Furniture. Palliser Furniture has also need to identify how many numbers of employees are hired by these agencies in order to provide customer services. This will help in building the image of the Palliser Furniture in the market.

Motivating 

In order to motivate the distributors and employees working with Palliser Furniture different number of sales target promotions will be provided to those who achieve certain targets. Additional commission and incentives will also be given to intermediaries. Non-monetary benefit like appreciation should also be provided. Compensation should also be given to those employees to whom customer provide positive review.

Evaluating & Modifying 

By setting up sales target, sales agency will know what is Palliser furniture is expecting from them. Palliser Furniture has to set reasonable sales target for the sales agency. If still the sales targets are not met by the sales agency, then various promotional tools such as brochures, email and training should be given to them.When the product is new in the market i.e. during the introduction stage of the product, Palliser Furniture will be spending the huge sum of money on brand awareness and promotion so profits are very less or are not visible. But through this stage, more & more dealers are getting in contract.

During the second stage, which is also known as golden era in lifecycle of the firm, when Palliser Furniture is growing rapidly and company is earning profits, it is that time when company sales are on high level and gaining profits. At this stage, Palliser furniture needs to put emphasis on who is their potential competitors & how to create monopoly in the target sector.

Maturity

Now at this stage, Palliser furniture will focus on how to improve the quality and services and also how to retain the customer base. Doing investment in the sectors which are profitable is the key strategy.

Channel Dynamics

Multichannel marketing System

This system is used as it is best suited according to the requirements. Palliser Furniture now approach to Independent Dealers and Distributors to sell their goods as they help initially in setting up the customer base and has provided relevant information of the market.

Along with distributors, Palliser Furniture will also put emphasis on direct selling with the help of the social media, advertisement and with its own personal website. With the use of these techniques, brand awareness will be built and customer will also get to know how Palliser Furniture is best.

By the use of Multichannel approach, Palliser Furniture will get various benefits like there is increase in the sales of their products as there are various channels who are working on same objective. Secondly, we can collect feedback from the customers and make our product more effective, improved & competent. Lastly same message is promoted through various channel, we can collect feedback from various segments, which will benefit Palliser furniture for long term.

Employee Satisfaction

Distribution (Physical Distribution)

Both sea routes and road transportation will be most suitable for distribution of our furniture from whole sellers to retailers in UK. These transportation channels will be most effective for the number of products we will be shipping and it would be cost effective too to send huge amounts at one time.

Sea transportation will be used when we will be shipping huge amount of furniture from the go downs in Canada to whole sellers in UK. It will be most suitable as the sea route can take up to 100 tonnes of furniture per container and one load can take up to 50 containers which will cost $25000 of shipping fees including as clearances and customs and as well including insurances. At one time, sea transportation will be able to take around $1 million of furniture.

Road transportation will be used for the moving of furniture from the whole sellers to the various retailers in UK. The transportation cost of furniture will be based on miles travelled and tonnes of load transported. A rough estimate for transporting 1 container carrying 100 tonnes of furniture will cost around a fixed charge of $5000 plus additional charges of miles travelled at .75 cents per mile.

Objectives for promotion

Create awareness-

To create awareness among people about our product in target market, social media will help Palliser very much. Company will use social media in promotion as a marketing tool. Palliser will use Facebook, Instagram and Twitter to promote its products and these are cheap comparatively. The Palliser can run a social media contest and Facebook is useful for speak directly to customers and share the results of different products.

Create interest-

Palliser will boost interest among the customers through different modes of advertising like, radio, television, newspapers, internet and magazines. The advertising through media is as tool which can reach to thousand even million potential consumers very easily. For example, Palliser can advertise its home-theatre product by showing an ad in which all family will be seeing the movie together.

Providing information-

The company will provide whole information about all the products, it will describe the variety of products, functions, characteristics, quality, fabric used, features and prices on its website as well as in the newspaper and magazines by adding pamphlet so that customers can know better about the products and choose according to their interest and budget. There should be accurate and true information about the products.

Stimulating demand and increase the sale

The other objective of the promotion is to increase the demand and sales through different ways. In UK, when the Palliser will open its new company, it will give incentives to its new customers and new members at a special timing which will be decided by the management and this activity will increase the demand. If the demand will increase, then the sales will automatically increase. Palliser has a capacity of completing the orders quickly which will be a key factor in increasing demand and sales.

Business Objective

Promotional mix

Advertising-

Advertising is a vital need for promoting the products and to encourage people to pay for purchasing the products. The UK is at the fourth place among the largest advertising markets of the world. Due to the roles of internet and smart phones, the ways of advertising are changed. Printed stuff like, Newspapers are the preferred mode of advertising in UK, so Palliser will use British newspapers which are Sunday Times, the Daily Telegraph, Sun, Mirror and so on. (United Kingdom - Trade Promotion, 2018)

Personal selling-

Palliser will do personal selling by organizing trade fairs which are designed especially for the future industry and consumers. Though it is not very preferable way, but the company can hire sales representatives who will meet customers or talk on phone and use skills of personal selling for developing good bond with the customers.

Direct marketing-

Marketing, after collecting details about the customers it is necessary to take permission from customers for sending an offers or promotions in UK. Palliser will use direct marketing tools like, telephones, leaflets, mails, fax or post for reaching to its customers. Palliser can use the automatic calls for direct marketing, they will record the promotional message prior and send to the customers. (Marketing and advertising: the law, n.d.)

Sales promotion- 

Palliser will practice sales promotions for promoting its products in UK. There are many ways of sales promotion like, front page promotion on newspaper, offer to readers, and organize competitions, prize draws, coupons and on-pack promotions. These types of sale promotion will help to make people aware about the products of the Palliser to customers. As in UK, people like to read newspaper more so front-page promotion and reader offers are best ways of sales promotion. (Smith, n.d.)

Public relation- 

The goal of the public relation is to make people aware about the products for free and it is different from advertising. The Palliser is making its new products and services press release continuously in Canada and tis strategy can be adopted in UK. For example, with public relation Palliser can inform the citizens about their connection with the retailers and distributers. Furthermore, Palliser should maintain high quality standards.  

Crisis Management Plan

 The crisis can be happened in any company or organization and there are many risks associated with the work. The use of new technology in the industry includes some risks to the safety of the workers. The work accident is the major aspect that is needed to ne consider and try to minimize as possible.

There are three element of the work accidents which are unpredictable, causing losses of material and non-material and the disturbance in the working process. For some of these accidents, the poor employee safety and health management is responsible. (Fitriyanto, 2017)

Palliser Furniture Ltd has established a health risk Assessment committee in Canada for conducting the health risk analysis of the possible effects to the health and emissions of VOC on the workers, it will adopt the same strategy in UK. Many types of controlling the air pollution and emission are implemented on the sites such as bio filters, bag houses and cyclones. (Palliser Furniture Ltd, n.d.)

SWOT Analysis

The other risk can be of the position established by the existing companies as the furniture is a large expense for the families and they look about the high quality and the value. The already existing national and global both chains can take the benefit of brand acknowledgement and established reputation to attract the customers and can make difficult for the new stores of furniture to make place in the target market.

So, the company should make a crisis management plan for solving this problem and adopt the different types of the promotion to attract the customers toward its brand and must make high quality products for the costumers.

Palliser furniture is a large manufacturing company producing a huge quantity of furniture on a regular basis which impacts the consumers either directly or indirectly (Palliser, 2018). Currently, the furniture manufacturing company has planned to expand in the UK market for which it requires to set its objectives with regards to its operations, marketing, supply chain and sales. It is also important to include information about inventory requirements, manufacturing process and capital and expenses requirement. The operating section of Palliser’s UK expansion business plan will start with the development stage and continue with the production process. The operations related objectives will be as follows.

Palliser furniture should prepare a production workflow and list out the possible risks associated with production in UK market.

The list of potential suppliers will be maintained which will comprise of their prices offered, terms and conditions. The objective will be to maintain a healthy relation with suppliers to continue even flow of supplies.

The daily operations of Palliser furniture in the UK plant will be identified by outlining the location of the manufacturing plant, hours of daily working hours, equipment required and calculating the worth of assets.

One sustainable target Palliser needs to achieve is maintaining the quality of furniture by following quality control measures.

Legal and Industry Compliance

Licences, Permits, Approvals

A furniture building business company involves building all kinds of furniture which requires the use of heavy equipment and hazardous machines. For the set-up of a furniture building company, or expanding in new territories certain licenses.

Business License

Palliser already has a business license for manufacturing furniture in US. But it requires to get a new business license for setting up a new manufacturing plant in UK. This license will give a permission to the company to legitimately use the equipment and machineries (Sherman, 2011). 

Conditional Permit

Palliser will require a conditional permit for building furniture and use of noisy machines and equipment in zoned out areas.

Fire Department Permit

It is important to get this permit as the manufacturing of furniture involves use of welding equipment, flammable materials and tools. This permit generally procured for the production process in the plant.

Seller’s Permit

As furniture is a taxable item, a seller’s permit will be required to get from the state agencies. This permit will help Palliser furniture to keep a track of expenses and when to pay the taxes.

Laws and Regulations 

In order to manufacture furniture in UK, Palliser furniture has to comply with certain laws and regulations applicable for the industry. The company has to comply with the Fire and Furnishings (Fire Safety) Regulations 1988/1989, 1993 and 2010 which ensures the materials, upholstery components used for furniture that are supplied in UK should meet specific ignition resistance levels and are labelled suitably (Fire and Safety Advice Centre, 2018). Palliser should also comply with the European Timber Regulations (EUTR), 2013 which prevents illegal harvesting of wood within the European market (Fire safety of furniture and furnishings in the home, 2018).

Industry Standards and Requirements

Palliser furniture is required to follow key industry standards/requirements. It has follow the Chain of Custody and Timber Procurement certification, FIRA Guide to the Timber Regulations (EUTR), Improved Performance for Businesses Implementing ISO 140001:2004, Office Chair dimensions and European chair dimension standard (EN 1335-1:2000), Standards applicable to the sale of children furniture in UK and safety standards for health and safety of woodworkers (FIRA, 2018).

Compliance Plan

#

Key Compliance Requirements

Compliance Measures / Actions

Resources Needed

Responsible  Job Title

Planned Start Date

Planned Due Date

Status / Comments

Laws/Regulations

1

Fire and Furnishings Regulation

Ensures upholstery components for furniture meets specified ignition resistance levels and labelled suitably.

Use of ignition resistant materials and components

Head of Safety and quality control

Month 1

Month 1

These laws and regulations are important and must be followed.

2

European Timber Regulations

Ensures illegal trading of timber within UK

Due diligence and forestry schemes

Trading agent

Month 1

Month 2

This must be followed to avoid fines and trading suspension.

Industry Standards /  Requirements

1

Chain of Custody and Timber procurement Certification

Ensures regulations for timber procurement

A procurement license

Procurement Officer

Month 1

Month 1

A license is required to legally procure timber.

2

Chiildren safety furniture

This standard ensures manufacturing of children friendly furniture

Furniture and fixtures ad per the standard

Head of Safety and quality control, Design Manager

Month 3

Month 5

This standard is to be followed by use of relevant materials for children furniture.

Operations Process and Setup 

Production Process 

This production process flow chart describes the main production steps that should be taken by Palliser in their manufacturing unit in UK. The process will start with procurement of timber which will require the Procurement Officer to get Chain of Custody and Timber Procurement Certification (Brack, 2014). After getting the certification, permission is required from the forestry department to cut timber for making furniture. The process will move ahead with the selection of components required to build the furnitures which will require to follow the Fire and Furnishing Regulation. This regulation lays down the standards for required ignition levels for furniture components (Hagen, Karemaker, Larsson, Hörnqvist, Brants, & Hagen, 2017).

The next step is to assemble the parts of the furniture which can be either of a sofa, dining table or a bed. All the parts are to be made separately and then assembled together. The next step is to give the finishing touches which includes polishing and smoothing out the edges. The packaging will be done according to the standards which says that products should be labelled properly. The final step is to deliver the products to the desired customers.

General Operational Information

Based on the factors, the daily operations of Palliser manufacturing company will start with Production planning where managers will decide on the amount of production that has to be done in a day, the availability of the stock will be determined, and how many units are required to be produced from the available resources. The daily operations will require the managers to monitor the production process and make adjustments if needed. The purchasing of raw materials is also required to be checked. The final step is to quality of the goods are maintained (Marques, Agostinho, Poler, Zacharewicz & Jardim-Gonçalves, 2016).  

Operations Location and Layout

The preferred location will be UK market.

Operating Assets

#

Asset Category

Key Asset Name / Brief Description

Supplier / Vendor

Owned or Leased

Quantity

Unit Cost

Total Cost

Financing Sources

Land

Acquired by the company

Property dealers

Leased

1

15,00,000

15,00,000

Financial Institutions

Facilities/Buildings

Acquired by Palliser Furniture company

Vendor

Leased

2

10,00,000

20,00,000

Financial Institutions and own capital

Plant equipment and machinery

Purchased in UK and imported from USA

Supplier and Vendor

Owned

20

7,00,000

14,00,000

Own Capital

Furniture

Purchased in UK

Supplier

Owned

150

5,000

7,50.000

Company stock

Office equipment

Purchased in UK

Supplier

Owned

200

100

20,000

Company stock

Vehicles

Delivery and goods vehicles

Supplier

Owned

10

100,000

10,00,000

Company stock

Other equipment / assets

Purchased in UK

Supplier

Owned

50

1000

50,000

Company stock

Operations Resource Requirements 

Resource Category

Item Name

(incl. brief description if available)

Quantity Required

(of each material / resource per unit of product)

Unit Cost (approx.)

Total Cost (per unit of product)

Materials

Sofa

Wood, upholstery, fillings

Wood- 1000, upholstery- 200, filling-100

1200

1300

Chairs

Wood, paint, Industrial glue

Wood- 2000, paint-1000, industrial glue- 500

3000

3500

Dining table

Wood, paint, industrial glue, glass

Wood- 3000, paint-2000, glass- 2000

5000

6000

Energy

(breakdown by Electricity, Oil, Gas, etc.)

Electricity

Oil

Gas

Electricity-  20 per unit

Oil- 65 per unit

Gas- 30 per unit

20

65

30

40

70

50

Water

Quantity in gallons, water supply for drinking

Water jars- 20

20

40

Consumables/Supplies

(e.g. lubricants, chemicals, tools, etc.)

Refreshments for labours

Food items- 100

100

120

Operations Labour/Staff

Staff Salary

100

50

5000

Outsourced Equipment and Services

(e.g. forklifts, cranes, maintenace & repair, technical / production consultants, contracted skilled Labour, etc.)

Skilled labours

20

30

60

Supply Chain Plan

Sourcing

The supply chain process comprises of the suppliers, stores, distribution stores, retailers, production centres, and sites for distribution (Jacobs, Chase & Lummus, 2014). The selection of supplier and evaluating the supplier choice is an important task for any company. The selection of suppliers is a time consuming process and requires to define clear objectives. Suppliers should be trustworthy and capable of supplying the raw materials at the time of needs. While evaluation of suppliers it is important to verify the legality of the suppliers. This helps the company to adhere to all the laws and regulations in the country.

For 3 main BOM items (e.g. wood or metal, cushioning material, upholstery)

For manufacturing a sofa, wood, metal parts, upholstery and industrial glue will required to manufacture 500 sofa sets in a period of 2 months. 5 suppliers will be selected and evaluated on the basis of their capability to provide required supplies to manufacture a sofa. The wood can be supplied from any local timber company. The upholstery can be supplied from local manufacturer of cloth materials. The industrial glue can be supplied from any local hardware shop or vendor to supply the product.

For manufacturing a chair, wood is the prime supply which can be supplied from local timber companies. Glue can be supplied either from a vendor or purchased from any hardware store.

For manufacturing of a dining table, wood and glue are primary which can be supplied locally.

Procurement and Supply Assurance Plan 

Procurement

Briefly describe your procurement/purchasing process including purchase lead times for key materials.

The procurement process will include purchasing of the raw materials required to manufacture the furniture. The process will require the procurement mangers to get the procurement certificates and lead times for procuring the materials will be set.

Inventory Management

Raw Materials Inventory

The inventory will be kept as per the requirement of the manufacturing plant. This will require the managers to use the resources efficiently.

Finished Products Inventory

The manufacturing plant will require an inventory to make 500 sofas, 200 chairs and 100 dining table sets. The track of the inventory will be kept by the operations manager by keeping a check on daily inventory level.

Contingency Plan

The alternative arrangements can include overstocking and optimum utilization of the resources as to not reah to the danger level.

The quality management is done through keeping a check on the materials procured from the suppliers and the vendors. This will ensure an efficient process of manufacturing. It is the responsibility of managers to track any changes that may hamper the production and report it during the daily operations of the business. The quality is to be maintained in terms of building the furniture too. This can be done by using the systematic process of assembling the furniture and using good quality of products. The upholstery quality should be good and cannot be compromised on the factor of pricing. This will help the company to gain trust of its customers and create a greater awareness for selling quality and safe furniture. This will also help in zero wastage and help in recycling products.

Operations Risk Management Process 

Process for operations risk management as follows:

Identify Operations Risks- The operational risks can include risk from lesser or under supply of the materials required to manufacture the products. The risk can also be from hazards inside the manufacturing plant from use of flammable equipment. The risk is also involved in handling the heavy equipment. This can be risk to the workers working in the plant.

Assess/Evaluate Risks- The risks can be evaluated from the nature of the hazards. The risks involved in making the handling the equipment can be assessed by having knowledge on the usage of the equipment.

Manage Risks- The risks can be managed by being on the safer side. The workers and other employees should be provided with safety equipment while working with flammable objects. The risks can be minimized by following proper safety instructions and adhering to the rules set inside and outside the manufacturing plant. The operational risks can be mitigated by educating the employees about the hazards that can be dangerous to their lives.

Operations Risk Management Plan

#

Risk

Causes

Probability (P)

Impact (I)

Risk Level

R = P x I

Risk Control Actions

Completion Date

Responsible Job Title

 

Risk from low supply of timber

Low production

3

3

9

Stocking materials beforehand

Month 1 (January 1)

Operations manager

 

Risk of fire

Loss of human lives and materials

2

3

6

Following safety measures

Month 1 (January 1)

Operations manager

 

Risk of health and safety of employees

Loss of health

3

2

6

Use of safety instructions

Month 1 (January 1)

Human Resource

Summarize all of the above information in a table as follows:

Risk Rating Table (Example of simple 3-level scale; you may consider a 5-level or other scales)

The forecasted income statement of the company shows that for the year 2019, the estimated sales revenue generated has come out to be 400,000, which in the financial year 2020 increase to 430,000 and the same again has an increase and becomes 460,000 in the year 2021. The company assumes its sales to increase by at least 10 per cent after the initial year, and 20 per cent in the next year. However, in this case, the expected sales after the first year have increased by only 7.5 per cent whereas in the next year it seems to be increasing by only 7%. The company also earns revenue from sales of scrap and receives rent from their warehouses.

The total revenues of the company are expected to be 410,000 for the first year, for the next year it is expected to be 442,000 whereas for the last year it has been forecasted as 474,000. The total expenses of the company accumulate due to all the costs such as costs of advertisements, insurance, furniture, rent, salaries, COGS, etc. The total expenses for the year 2019 have been predicted to be 244,500 which would have a potential decrease in the next year.

Again, in the year 2020 the same would increase and become 264,000, implying that more costs would be paid by the company. The rate of income to be paid in the year 2019 is 18 per cent, however, the same for both the succeeding years would be 20%. Finally, the total income of the firm for the three years 2019, 2020 and 2021 would be 135710, 160,000 and 62650 respectively. In 2020, the profits are higher due to lower expenses whereas on the contrary, in 2021, the profits for the firm are expected to seep down drastically.

Forecasted Cash Flow Statements 

 The cash flow for the company has been forecasted for 12 months where the total of all the necessary receipts and payments are taken into account. The highest amount of receipts is expected to be generated from the 7th month, which are expected to be 52,834, whereas, the least receipts generated would be in the first month which would derive only 5000 for the firm. The total cash receipts for the 12 months have been predicted to be 417,000.

The constituents of the cash receipts are cash sales, collection of credit sales, receipt of loan repayments and new equity inflow. The total payments made for the 12 months are predicted to be 183,305, where the highest amount of payments would be incurred in the first month. All the expenses which would make the cash of business to go out, would be included here. The first two months of the year, show a deficit balance of the cashflow, which subsequently gets balance with the succeeding months. The final balance of the cash flow shows an expected surplus balance of 233,695.

Forecasted Balance Sheet

The forecasted balance sheet of the firm starts with the opening cash balance which is expected to be 40,000, 40,800 and 41,616 for the years 2018, 2019 and 2020 respectively. The total current assets of the firm are expected to be 362,000, 369,240 and 376,624.80 for the three years. Now, the total fixed assets are amounted to be 181,000, 186,430 and 190,158.60 for the three financial years. The total assets generated after adding up other assets and deferred income tax stand to be 543,650, 554,523 and 565,613.46 for the years 2018, 2019 and 2020 respectively.

The long-term liabilities of the company are comprised of long-term debts and deferred income tax. Their balances for the three financial years are predicted as 100,600, 102,612 and 104,664.24. The owner’s equity is funded by the investment of the owner and retained earnings. The total liabilities and owner’s equity are forecasted to be 26,820, 241,556.40 and 246,387.53 for given years.

Social Return on Investment (SROI) 

Kindly refer to the Appendix.

Breakeven Analysis 

The net benefits derived out of Brand awareness is determined to be 230. The net benefits that is derived out of the sustainability objective of targeting new customers comes out to be 145. And finally, the net benefits that are received by Improving upon the customer relationships are 235, implying it derives the maximum profit. Hence, businesses should work upon improving their relationships with customers.

Financial Requirements 

The total financial requirement would be calculated by adding the one-time startup expenditure and the total recurring expenses. The one-time startup expenditure can be assumed to be $15,000 during the start up. The total variable expenses would be $15,000 until the firm reaches the break-even point. Hence, the total financial requirement for start-up till reaching break-even point would be $30,000.

Business Viability

Total Finance Requirement 1: $30,000

Planned Breakdown by Types of Finance:

Equity: 60% = $18,000

Debt: 40% = $12,000

Prospective Source Category

Prospective Source

%

$

Equity

Owner’s Investment

70

12,600

Retained Earnings

30

5,400

Total Equity

100

18,000

Debt

Bank Loan

80

9,600

Customer advances

20

2,400

Total Debt

100

12,000

Total Finance Requirement

100%

30,000

Target market potential

The potential target market of the company is regions of USA, Mexico and Canada. Their markets are divided into the following categories under which the customers according to their earnings - Wealthy achievers, urban prosperity, comfortably off, moderate means and hand pressed.

Differentiated customer value proposition

The unique selling proposition of the company is derived by producing the best quality furniture for homes and producing these products are reasonable prices, while focusing primarily on customer satisfaction and service.

Marketing strategy

The company follows a feasible marketing strategy. The products that the company mainly deals in are good quality furniture, living room essentials, dining room essentials and bedroom essentials. The prices which the company fixes on the products are economical and reasonable, because customer satisfaction is their primary goal. Promotional strategies of the company include aspects such as advertisement, personal selling, direct marketing, sales promotion and public relations. The products are distributed through intermediaries such as independent dealers, distributors, etc.

Key financial performance indicators

All the performance indicators for the initial year are shown as below.

GP Margin: (410,000-90,000) / 410,000 = 0.78

Net Profit: 410,000 – 244,500 = 165,500

NP Margin: (135,710 / 410,000) * 100 = 33.1%

ROI: (135,710 + 160,000 + 62,650) / 543650 * 100 = 65.91%

Current Ratio: 362,000 / 107,020 = 3.38:1

Debt-Equity ratio: 207,620 / 29,200 = 7.11

Brack, D. (2014). Promoting legal and sustainable timber: using public procurement policy. Chatham House for the Royal Institute of International Affairs.

FIRA. (2018). FIRA Guide to the European Timber Regulations (EUTR). Retrieved from https://www.fira.co.uk/technical-information/environment/fira-guide-to-the-european-timber-regulations-eutr 

Fire and Safety Advice Centre. (2018). Furniture and Furnishings (Fire Safety) Regulations 1988/1989, 1993 and 2010. Retrieved from https://www.firesafe.org.uk/furniture-and-furnishings-fire-safety-regulations-19881989-and-1993/ 

Fire safety of furniture and furnishings in the home. (2018). A Guide to the UK Regulations. Retrieved from https://www.fira.co.uk/images/FIRA-Flammability-Guide-PDF-with-links.pdf 

Jacobs, F. R., Chase, R. B., & Lummus, R. R. (2014). Operations and supply chain management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.

Palliser. (2018). Casablanca. Retrieved from https://www.palliser.com/ 

Sherman, A. (2011). Franchising and Licensing: two powerful ways to grow your business in any economy. Amacom.

Hagen, R., Karemaker, M., Larsson, I., Hörnqvist, A., Brants, D., & Hagen, M. (2017). Fire safety of upholstered furniture and mattresses in the domestic area.

Marques, M., Agostinho, C., Poler, R., Zacharewicz, G., & Jardim-Gonçalves, R. (2016, September). An architecture to support responsive production in manufacturing companies. In Intelligent Systems (IS), 2016 IEEE 8th International Conference on (pp. 40-46). IEEE.

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