Analysis Of Ashley Furniture Business Strategies Marketing Essay

Like a great many other furniture companies, Ashley Furniture Establishments offers its products, such as home furnishing, accessories through two main distributions: the first is independent channels; another is more than 400 Ashley Furniture Homestore retail furniture stores. All of the stores are either owned by the business or licensed to other entrepreneurs in THE UNITED STATES countries, such as USA, Canada, Mexico, Central America and Japan.

The mission to be the very best Furniture Company shows its proud history and shows the desire about future. And with over 60 years of creativity, creation and experience in the furniture industry, the company already became the leader on the market which targets the grade of its furniture products. At present, the business has manufacture plants across the USA and Pacific Rim Countries, mainly in China.

Business Level Strategies of Ashley Furniture

One model can be used to give a full explanation of what happens in real life at the level of the Strategic Business Device and it can help identify those strategies that can be utilized to avoid the failure of business. The successful strategies can be illustrated as next levels: Low price/ low added value, Good deal, Hybrid, differentiation without price high quality and Concentrated differentiation.

Low price/ low added value: providing lower price than it can be found in other places.

Low price: predicated on a high volume with low margin product to bring cost command as its competitive advantage.

Hybrid: Be competitive on price and seek to keep carefully the margin by handling the price tag on products.

Differentiation without price high grade: Competition is principally on recognized benefits however, not on price.

Focused differentiation: Using unique qualities without substitution to get top quality.

The Strategic Business Unit chose because of this research is the living room section of Ashley Furniture. Relating from what one of the Ashley Furniture Sectors sales managers called Al Lopriore said, the business enterprise model of Ashley Furniture differs from other competitors, by building for over 65 years, the primary business design of Ashley Furniture is the business design, build and deliver its own furniture, and the company is in charge of all aspects to ensure the nice quality.

From the web site of Ashley Furniture Business, it could be seen from the homepage that the four cornerstones of its business models are quality, style, selection, service. They are all the foundations for Ashley Furniture making every decision and the rules and concepts to help the company achieve the mission statement of being the best furniture company.

Therefore, the primary business design of Ashley living room furniture used to get competitive advantages is using Hybrid, this means by the methods such as outsourcing a series of its products from Pacific Rim countries to lower the price of furniture and adding value to the products by quality, style, selection and service.

Strengths and Weaknesses of Business Strategies

The main strategy of Ashley living room furniture is Hybrid, meaning the division needs to remain competitive other competition on price and as well to control the price tag on furniture to maintain the gross margin of the company. There are a series of advantages and advantages the following

Strengths:

Good price to get customers: After the recession of overall economy turmoil in 2008, the price tag on goods, especially furniture, become the primary competitive advantage to appeal to customers to take products on company. As the main reason that led to the economy problems is the subprime loaning which is related to the housing marketplace; and makes a drop in the sales of houses in THE UNITED STATES, mainly in US. Although the recession had a negative impact on Ashley living room furniture, good price of its products helps to keep attracting the customers to purchase Ashley living room furniture.

Variety of products: which means that based on variety of products, Ashley living room furniture can survive through the problems. Even one product fails in the market, there are still other products flourish in the market to make up the loss that cost by the inability of this product. Besides, different sorts of products make those brand loyalty customers to buy more and also raise the image of the brand. This helps the business achieve the mission of becoming the best furniture company in North America and even all over the world.

Maintain the gross margin: Certainly, this system assist the business to keep up the gross margin by managing the cost of furniture. Through the use of Hybrid strategy, the division still possesses the ability to control the price tag on products. On the other hand, with the addition of more value through design, build and deliver the furniture to the customers, the products of Ashley living room furniture are still attractive.

Weaknesses:

Inevitably, there are some negative impacts by using this kind of business level of strategy, that can be discovered as weaknesses. Along with the weaknesses of using Hybrid strategy are shown as follows

More funds spent on implementing the strategy: In order to supply and offer more furniture products to the clients, more cash will be spent on Research and Development, Design to find more alternatives offered to the clients. Besides, the division possesses its stores which cost much of its capital on buying purchasing fixed investments, which may become a potential problem to the money flow of the business.

Competition of the similar products in the company: It could be seen from its website that the division provides more than 100 furniture products to customers to find out the most suitable furniture because of their living spaces. Therefore, this results the competition among the merchandise within the same category. Although from some point of view, this draws in customers to buy in Ashley living room furniture, it does increase the competition in the merchandise of the business, which can't be ignored.

Lack of quality: It could be known that the merchandise of Ashley living room furniture rely on quality and the mission to become the best furniture company in North America and even worldwide rely on quality; meanwhile, the business style of Ashley living room furniture will depend on the grade of products. If the business concentrates on handling the cost, such as the outsourcing price offered to those developing companies in Pacific Rim countries, which may affect the quality of products of Ashley living room furniture. Then it'll influence the paradigm of the department on the market and then reduce customer brand devotion.

Report to the Mother board of Directors

Dear Mother board of Directors

This article is a summary of the conclusions of the current research on the business enterprise level strategies predicated on the living room department of your organization. And it will highlight the key information and results; by the end, several suggestions will be provided to help the section enhance the strengths and polish up the weaknesses.

After inspecting the strategies employed by your company, it can be viewed as Hybrid strategy. It do bring talents to the section such as offering good price to the customers which helped the division survive during the recession of current economic climate tough economy in 2008, offering different types of products which boosts the decision of customers, and the methods of controlling on the expense of furniture improve the competitiveness of the department. However, it brings a few negative impacts to the Ashley living room furniture. For instance, it disperses the funds of the business to many different products; it also increases the competition on the list of furniture of the company, which is definitely ignored by many companies. The high power of cost control may have an effect on the quality of products that will lead to a substantial impact to the section.

Therefore, Ashley living room furniture should pay more attention to this kind of issue and the to improve the talents and polish up the weaknesses. The next will give a couple of recommendations.

Enhance the talents:

Corporate with those plant life in Pacific Rim countries. This implies the Ashley living room furniture department collaborates with those crops in Pacific Rim countries. By using this technique, it is effective for the department to control the grade of furniture. Besides, through collaborating with these vegetation, the department can share the info, knowledge and resources to accomplish more competitive benefits to compete other rivals and make the mission of the company come true.

Pay focus on the shipping and delivery cost. This is a substantial part of the price of the furniture, by freelancing some products and make at another side of Pacific Ocean, the division was charged a huge amount of capital on shipping cost. So that it is necessary to make use of the strategy like planning in South-east Asia, and assembling in US to cut down the shipment cost and then make the Ashley living room furniture more competitive.

Polish in the weaknesses:

Further design the merchandise to differentiate them. The furniture must be design further and add more value functions to make it more attractive and valuable. By doing this, furniture can be categorized to match different size of living spaces, different sorts of design styles.

Add TQM in Asia plant life. Total Quality Management helps Ashley living room furniture to regulate the furniture quality and based on this, the division can have a perspective of the way the shipping furniture appears like; and predicated on this, the department can offer an understanding of the furniture quality to meet up with the customers requirements.

Funds allocated to those more value-added activities. Dont spend the amount of money and capital on those non-value added procedures, even those it's important to the section. In cases like this, it is best to outsource these procedures somewhat than make it by the division itself.

It is essential that the section pay attention to polish up the situation and make the products of the department more competitive and attractive. It really is predictable that by boosting the talents and polishing up the weaknesses, it'll accelerate the process to become the best furniture company in North America and even all around the globe.

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