Environment Analysis
- Micro analysis- Please explain company's internal environment with the Valu chain model.
- Macro analysis- Please use the PESTEL model to analys only furniture industry in context of both the countires India and UAE on Macro level.
- Meso analysis- Please use Porter's five forces to analys both the countries India and UAE on Meso level.
Answer:
Macro Environment:
PESTEL analysis
Political: The political factor is one of the major factors for any external business environment. So, the Sofa and Chair Company should also follow this factor to understand the market segment in both the countries, i.e. in India and UAE (Yüksel, 2012). In India, the political environment is very much friendly and democratic. The companies are very much aware of all the political factors and law regarding the business. In the UAE, the law is also very friendly but in order to stabilize in the country, the Sofa and Chair Company will have to put some effort because in UAE, the political laws are different and also very much complicated for any new business (Yüksel, 2012).
Economical Factors: Globalization is one of the most important factors for any business. In India, the economical environment is not that much high whereas in UAE, the economy is very much stable and it is very much developed according to the globalization. The effect of financial crisis in 2007 had its effect on India but not in UAE (Yüksel, 2012).
Social factors: The company is providing job opportunities to the people in India. They are making many people self-dependent. Apart from that, they are providing the best and high quality furniture to the people (Thesofaandchair.co.uk, 2016). In UAE, they will also have to support the society by providing the best quality of furniture and career opportunities.
Technological: India is technologically developed. In the market of furniture, there are many technologies which are making the business easier. Moreover, the UAE market is also very much developed with technology than India. So, the technologies of both countries are making a big difference in the furniture industry.
Environmental: Geographical environment is very much different for each country. India has different season and UAE is basically a warm country. So, the company has to understand the environment of both the countries (Makos, 2014).
Legal: Legal factors are very much important. India has their laws for the furniture business and so does the UAE. The Indian laws are very much easy to understand. However, the UAE law is not so easy and at times are a bit complicated for any start-up business.
Micro Environment
The value of chain
The two major activities, such as primary and secondary, are explained by the Value Chain approach. Marketing, logistic, production, after-sales functions are the part of primary activities. The support processes of primary activities are defined as secondary activities (Walters & Lancaster, 2000).
SWOT Analysis
Strength
The company has a strong concept as they have a huge range of functional products which are well designed along with the benefit of gradually increasing uses of materials which are renewable. The Sofa and Furniture Company believe in long term relationship with their partners (Xue-qiao, 2010). Besides that, this company has upgraded themselves according to the modern technology and consumers’ desire.
Opportunities
The company should work towards expanding itself throughout the world, especially targeting the main cities. They should recruit experienced and smart employees who can work towards the success of the organization (Xue-qiao, 2010).
Weakness
Sofa and Chair company has not survived among global marketing as they are very much introvert and want to grab the local market.
Threats
Global experience is very much important to survive in the market. Any global company can defeat The Sofa and Chair Company as they have less experience in the global market (Indianmirror, 2016).
MESO Environment
Porter’s five Forces
Power of buyers: The furniture company is one of the strength of India’s economy (Roy, 2011). Thus, the industry has a great buyer base in India. The customers are very much reliable on this industry for purchasing their household and office furniture. Similarly, in UAE, the people are dependent on the furniture companies to decorate their houses and offices (Roy, 2011).
Power of suppliers: There are many suppliers of the company like Roat-Irons and Woods which are influencing the Indian market along with that of the UAE market. So, the market of furniture business is very much influenced by the suppliers.
Rivalry: Indian market is very much rich with great furniture manufacturers as they have natural source like wood. So, there is a less chance of getting fear of rivalry. However, in the UAE, the market is not that much rich and they have a chance to get slotted and taken over by other companies (Emirates 24|7, 2008).
Substitute
The Sofa and Chair Company have to be up-to-date according to the latest trend to avoid becoming the odd or old styled furniture company (Ismail et. al., 2011).
New entrance
Many renowned companies are entering in the market with their new designs which is again a threat for the company. Hence, they need to be with the current trend of the market and keep themselves updated with what the customers want, so that they can have a firm base of customers who do not go to any other company (Ismail et. al., 2011).
References
Emirates 24|7, 2008. Furniture sector in UAE to have 'highest growth rate in world'. [Online] Available at: https://www.emirates247.com/eb247/companies-markets/retail/furniture-sector-in-uae-to-have-highest-growth-rate-in-world-2008-10-02-1.56620 [Accessed 17 Jan. 2016].
Indianmirror.com, 2016. Furniture Industry, Indian Furniture Industry, Furniture Industry in India, Furniture Industry India. [Online] Available at: https://www.indianmirror.com/indian-industries/furniture.html [Accessed 17 Jan. 2016].
Ismail, W.K.W., Hussain, G., Rashid, S.Z.A. and Mohamad, N.A., 2011. Followers’ ability as a substitute for leadership. African Journal of Business Management, 5(19), pp.7939-7944.
Makos, J. 2014. PESTLE Analysis of India in five Steps. [Online] PESTLE Analysis. Available at: https://pestleanalysis.com/pestle-analysis-india/ [Accessed 17 Jan. 2016].
Roy, D., 2011. Strategic Foresight and Porter’s Five Forces. GRIN Verlag.
Walters, D. and Lancaster, G., 2000. Implementing value strategy through the value chain. Management Decision, 38(3), pp.160-178.
Thesofaandchair.co.uk, 2016. Bespoke and Luxury Sofas Designed and Handmade in London | The Sofa & Chair Company. [Online] Available at: https://www.thesofaandchair.co.uk/ [Accessed 17 Jan. 2016].
Xue-qiao, S.H.I., 2010. SWOT analysis of the Shanxi agriculture intellectual property rights. Editorial Board Members, p.59.
Yüksel, I., 2012. Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), p.p52.
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