Meubles Canadel: Looking Towards The Future

Table of Contents

HISTORY AND DEVELOPMENT 1

INTERNAL ANALYSIS 1

EXTERNAL ANALYSIS 3

EVALUATION OF SWOT ANALYSIS 3

STRENGTHS 3

WEAKNESSES 4

OPPORTUNITIES 5

THREATS 5

PROBLEM STATEMENT 6

MISSION 6

CURRENT MISSION 6

FUTURE MISSION 6

RENEWED POSITION 7

APPENDICES 8

HISTORY 8

INTERNAL ANALYSIS 9

FIGURE 1: CANADEL'S ORGANIZATIONAL STRUCTURE 13

EXTERNAL ANALYSIS 14

FIGURE 2: PORTER'S FIVE FORCES MODEL (PRESENT SITUATION) 16

FIGURE 3: PORTER'S FIVE FORCES MODEL (FUTURE SITUATION) 17

WORKS CITED 18

History and Development

Canadel is a privately owned, quickly growing, customized furniture manufacturer that specialized in designing, assembling, finishing, and marketing casual dining furniture. With a University background in Accounting, Guy Deveault founded the company in 1982 by using his father's previous furniture company's contacts. He funded the money from friends and family with promises of repayment upon success of the company. By 1985, both of Guy's brothers, Michel and Jean, had joined the company as Operations Manager and Sales and Marketing Manager respectively.

By 1991, Canadel established the image of being a supplier of high-quality furniture. They differentiated themselves by focusing on the casual-dining market which became the number one contributing factor to their rapid success. With this success, Canadel decided to enter the U.S. market in 1992, securing a few large U.S. retailers almost immediately. The same year, Canadel introduced the "workshop" concept which allowed customers to visualize and order the customized furniture they desired. This concept put them technically ahead of their competitors and allowed them to attract more valuable, high volume retailers. The company currently holds a strong position in the market, with over 50 per cent of the entire dining room market.

Internal Analysis

Canadel is a privately owned, consumer focused, customized furniture assembler. Its financial position is currently reasonably stable, with constant significant increases in sales and revenues. From the years 1998 to 1999, Canadel's sales increased by 25 per cent and are expected to increase by another 21 per cent by the year 2000. They put forth great efforts into cutting costs and have no stockholders making them a debt-free company. Canadel's operations run smoothly through sequential interdependence between channel members. Meaning that each department has different procedures, on which their outputs are dependent by another department. The company is targeting the casual dining furniture market with a customer focused orientation. The use of the workshop has enabled Canadel to allow their consumers to have their furniture the way they want it; maintaining customer satisfaction and increased loyalty. With policies such as "customer satisfaction, but not at the expense of employee relations" and the open-door policy, Canadel had been able to create a low power distance between management and the employees. The company also has unique hiring procedures compared to other large competitors in the market. By holding frequent company activities and parties, Canadel has been able to motivate and retain their employees by showing their appreciation.

Canadel's supporting activities in its value chain appear to be relatively strong; however there appears to be a few weaknesses in its primary activities including research and development. As well, its current resources seem to be weak as they are not very valuable, easy to imitate, not rare, and are not unique to the organization as they can and have been copied. These two problems can be viewed as two of their current main weaknesses.

External Analysis

The Canadian casual dining furniture industry has many competitors which operate in this saturated market. The industry is in the maturity stage of the life cycle and firms needs to continually introduce new technologically advanced production methods in order to stay alive. Along with costs being high for materials and supplies, having competitively priced inputs is another critical success factor. This leaves room for only larger firms that can afford and budget these expenses.

Sales are decreasing with the social trends of families with few or no children; creating smaller table and chair orders. However, the trend of open-space architecture has increased the demand for everyday use dining room furniture.

An industry analysis was conducted and this firm is a three star firm trying to move toward a four star firm. In order to do this they need to decrease the threat of substitutes by entering new markets.

Evaluation of SWOT Analysis

Strengths

Canadel's key strengths are listed below:

1. Marketing and Sales: With introduction of the workshop concept, having choice of colours and style has established customer satisfaction and in turn loyalty. It also increased their inventory turns per year to 45 over the industry average of 15.

2. Production: Having five different plants with specialized procedures and a JIT inventory system has allowed the company to decrease production and delivery times, giving them a competitive advantage over its competitors.

3. Suppliers: Having close (50 kilometer radius), local (high unemployment) suppliers has given them bargaining power. Working with 70 per cent of local producers, having them specialize in production has enabled Canadel to save on capital costs and create a steady, on-time flow of raw materials.

Weaknesses

Canadel's key