Manchester Case Study

HOW WOULD YOU CHARACTERIZE THE HOUSEHOLD FURNITURE INDUSTRY?

In 2004, the Household Furniture Industry’s annual growth was 4%, it was a $36.4 billion industry. There a many competitors within the industry because of low cost imports from Asia and Mexico. The household furniture industry is also closely tied with the economy. After the housing boom in the early 2000’s, companies needed to focus on a more innovate and stylist product to get consumers attentions.

Household furniture products are classified as wood (48%), upholstered (34%), and metal/other (18%). They are then segmented by price and quality. In a survey, Consumers rated that they are more concerned about style, design, quality, and comfort. They are not loyal to one particular brand because 60% of them would switch brands when looking for a replacement. The consumers are also highly involved in the process of purchasing furniture, 60% of them talked to third parties and 70% visited more than one store prior to a purchase. They are also vary significantly on where they purchase their furniture.

What are the benefits and risks associated with the acquisition of PLFD?

The benefits associated with the acquisition of PLFD is, they have very strong brand equity and a recognizable name within the household furniture industry. They are associated with high quality and stylish products. 80% of consumers were aware of the brand. PLFD occupied the number one or number two market share position in several categories. They also had strong ties with all of the leading distribution centers. This is something that Manchester Products was lacking and could significantly help them to get their products onto the market. Also the household furniture industry is a larger industry and has more steady growth than the office furniture industry.

Some of the risks associated with the acquisition are Manchester and PLFD targeting two different markets. Manchester is primarily office furniture,...