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Manufacturer of Wood Furniture
Background
The firm is a manufacturer of wooden furniture including TV tray tables, gourmet kitchen carts and islands, and Adirondack-style
outdoor furniture. At certification the firm had 77 employees and
approximately $5.2 million in sales.
By the mid-'90s sales topped out at $9 million and the product line fully
evolved to meet the needs of customers in the furniture industry, which eased
the firm’s loss of customers in the giftware industry. It was during that time
the firm also began to expand its product line to include larger pieces of
furniture manufactured from many more types of solid woods.
By 1999, as business began to slow, the owners believed it was just another
bubble in the economy that before too long would abate. Unfortunately, because
of increased foreign competition and a depressed economy the firm’s gross margin
dropped below 10 percent while the cost of doing business steadily
increased.
With the NYS TAAC’s help, management identified an area that if improved would
ensure the long-term viability of the business.
Assistance Provided
The very first order of business was to replace lost sales. Without increased
sales, the firm's long-term prospects were dim. After analyzing the strengths of
the business, it was determined the firm needed a strategic marketing/sales plan
to address both immediate and longer-term needs. The plan would define the
firm’s strengths, weakness, opportunities, and threats and had to include a
formulation for controlled growth, predicated on specific business calculations
and formal marketing strategies, market trends, and customer base. Once these
elements were properly addressed, long-term goals and objectives could be
developed for the firm.
Project Results
The project is considered a big success by the firm. Since completion of the
project sales
experienced a 50 percent increase and employment increased 30 percent. One immediate benefit of this project was the firm's
products being featured in two extremely popular shop-at-home catalogs (LL Bean
and Lands-End).
During the course of the strategic marketing project management learned that as the firm
becomes a stronger competitor, management will be in need of a few high-level
professionals to assist the firm in reaching the next sales plateau. Three such
positions are VP of Manufacturing, VP of Marketing, and Controller. Filling
these key positions will be instrumental in moving the firm to the $10 million
sales level.
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