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Usa Furniture Manufacturing Industry

Essay by 24  •  July 13, 2010  •  11,430 Words (46 Pages)  •  1,337 Views

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Executive Summary

The following report is providing a overview of the furniture manufacturing company Adorn expanding its sales operations into a foreign country and the consequences of such a decision.

The assignment covers:

The decision to go global and how to Adorn should choose which country to expand its operations into. Discussed are such aspects as G.D.P. and demographic trends

The U.S.A. is the proposed country to expand into.

With this, data was gathered from many different sources to analyse the country and trends of the U.S. economy. Analytical tools such as P.E.S.T., S.W.O.T. and Porters Diamond Model are used to better understand the environment with in the U.S. and how Adorn needs to adapt to those markets.

Also the ease of doing business with in the U.S. with regards to the relative ease of setting up and doing business within the U.S., compared to other countries.

The furniture industry and its future is discussed in depth with regards to local manufacturing industry, imports and consumer changing perceptions within the United States.

Finally considerations such as regionalism, e commerce and international terrorism and the impact on global expansion

Contents Page

1 Introduction 4

1.1 Reasoning for considering Globalisation of Adorn 4

2 Analysis of Globalisation 4

2.1 GDP 5

2.2 Demographic Trends 6

2.2.1 Population 6

2.2.2 Culture 6

2.3 Proposed Country 6

3 The United States 7

3.1 P.E.S.T. 8

3.1.1 Political - legal environment 8

3.1.2 Economic environment 12

3.1.3 Socio - cultural environment 18

3.1.4 Technological environment 21

3.1.5 Other 25

3.2 S.W.O.T. of setting up operations within US 26

3.2.1 Strengths 26

3.2.2 Weaknesses 27

3.2.3 Opportunities 27

3.2.4 Threats 27

3.3 National competitive advantage 27

3.3.1 Factor endowments 28

3.3.2 Demand conditions 29

3.3.3 Related support industries 29

3.3.4 Corporate strategy, structure and Rivalry 30

3.3.5 Other influences 30

3.3.6 Concerns regarding this model 30

3.3.7 Conclusion of the Diamond Model 31

3.4 Demographic trends 31

3.4.1 U.S. Workforce 32

3.4.2 US Education 33

3.5 Treaties 33

3.6 Trends within the United States furniture industry 34

3.6.1 Change in perceptions: 34

3.6.2 Economic changes within the furniture industry 34

3.6.3 Imports 34

3.6.4 Future trends 35

3.6.5 US Imports 36

4 Additional considerations 37

4.1 Regionalism/ integration 37

4.2 E commerce 38

4.3 International terrorism 39

5 Conclusion 40

6 List of references 42

7 Appendices: List of Tables 44

8 Appendices: List of Figures 47

Introduction

Adorn is a furniture manufacturer that is producers to clients specifications. It utilises highly automated processes development and production of its products,

Adorn's core competencies and competitive advantage include high automation of manufacturing processes, producing specialised and well designed furniture for the user in practicality and style.

1 Reasoning for considering Globalisation of Adorn

With the current global economic recession it would be advisable to enter foreign markets with the intention of sustaining or increasing the organisations profits through increasing the company's market base and sales.

Taking a more proactive stance to the slowdown in demand would be following in Nissan South Africa's successful approach of increasing sales through globalisation.

As reported by Ndundu Sithole (2009);

""Nissan South Africa will boost production and expects to increase its local market share despite a domestic and global economic slowdown, managing director Mike Whitfield said. Local car sales have been in negative territory in the past 18 months, falling by 30.1 percent in March, and the global slump has slashed vehicle exports.

Nissan S.A. expects new product lines to boost output to about 40,000 units from 28,000 in 2008. He said the company was exploring further production opportunities in countries such as Angola and Nigeria. "Our market share came up to around 7.5 percent last year on the back of some lack of products in certain key segments. This year we expect to be just over 8 percent... which means we are in a growth phase." Thousands of jobs are on the line in the automotive industry and vehicle manufacturers and car parts producers have approached the government for loans. Whitfield said Nissan S.A. had escaped the worst, but was not unscathed and has shed 180 jobs.""

Globalisation could be attained through the company's comparative advantage of low cost and high automation combined with a well planned and implemented strategy.

Analysis of Globalisation

There

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