Meubles Canadal: Looking Towards the Future Essay

IntroductionMeubles Canadel is Canadas leading manufacturing fuddled in producing high select piece of furniture for dine purposes and was established in 1982 by three brothers in Louisville, a atrophied t tax return in in the province of Quebec in Canada. It is a privately own connection and established itself from a small to a large world-wide operate company with still increasing sales around $ one hundred twenty-five million in 2000. Between 1987 and 1991 Canadel grew rapidly. This was due to the fact that the self-coloured rivet on demographic changes. The families size decreased in this magazine and shifted the crave from the lunch-corner and formal eat room segment to dine room furniture to e actuallyday use. Canadel took advantage of this change and started to produce high quality dining furniture. With continued increasing sales, the firm expanded to the U.S securities industry and additionally serves straight off the eastern decompose of the U.S with its pr oducts.Looking at Canadel in 2000, the firm owns 50% of the dining room market although prices argon everydayly higher than opponents prices. At this point in beat, the companys sales were mostly coming from the U.S (75%), 20% from the Canadian market and five per centum from Europe and Japan. Further, Canadels staff represented 1,550 people of which 800 atomic outcome 18 now employed. In the following a case epitome of Canadel will be conducted. The first part represents the external environmental analysis whereas the second part focuses on the indispensable factors influencing the firm. Ultimately a closure will be drawn. External environmental analysisAn external environmental analysis contains a macro frugal and a microeconomic view on firms influencing factors. On the macroeconomic level one could ask a general question for example which environmental factors do mask the firm and its strategical management. It is necessary for Canadel to maintain a coherent strategy that fit in its environment in order to rein ram down its distinctive competencies and establish sustainability in creating value to its stakeholders. In order to answer this question a PESTEL analysis will be conducted, where the macroeconomic view is studied. PESTEL stands for political, economic, sociocultural, technical, environmental and legal factors, which claim the firm and its strategy. Regarding political factors, the Canadian furniture industry was massively influenced after(prenominal) the introduction of the Free Trade Agreement (FTA) between the United States and Canada in 1989. Trades between both countries have become easier due to the elimination of tariffs and in addition rival growingd. However, Canadel was non operating internationally in this time therefore, only the increase in competition could have influenced the firm. The undermentioned factor, which influences Canadel, is the economic impact.Exchange rate fluctuations between the U.S. and the Canadi an dollar usher out affect the export to the United States, which squirt cause both losses and benefit for Canadel. At the moment the firm has an advantage because the Canadian dollar has a noticeable set up compared to the U.S. dollar. However, this used to be different and therefore it is principal(prenominal) for the three Deveault brothers to take this factor into consideration in order to stay off losses. Another point is the huge unemployment rate that is mentioned. The Deveault brothers feel that they have an liability to stay in Quebec in order to support their hometown and province, which would not be ensured if they would look for other suppliers in different regions.This decision influences the firms management strategy. On the one hand it could mean that Canadel does not take the opportunity to look for other suppliers in different regions who big businessman be cheaper and therefore would enable the firm to benefit in be savings. On the other hand it meliorat es the relationship to its suppliers and increases loyalty on both sides, which washstand be more valuable than any cost saving strategy. The next external factor is the sociocultural development over time. As already mention, Canadel is a local anesthetic company carrying about its employees and suppliers. This clearly influences its strategic operating(a) decision as above discussed.Moreover, the company took advantage of the demographic changes in lifestyle and family size. It began to produce smaller exclusive tabulates and profited from the decrease in family size. Further, Canadel has a very unique attitude towards work, hiring policy and leisure. It is mentioned that the Deveaults try to maintain a small cause distance between their employees and the management level. The company does not have a hierarchal structure and stands for an open-door policy where employees any time have the possibility to see the mangers and talk to them. Meetings held within the management level or with suppliers are classified as very informal without a secretary taking notes. These characteristics affect Canadels business decision want staying in the region of Quebec to conduct its business in favour of the local population.Another economic factor is the technological change in the last(a) couple of years. It is obvious that machinery improved and facilitated the manufacturing process of wood. However, one has to remember that the company emphasises the business of unique hand made dining tables. This could lead to the mop up that the technological improvement did simplify the manufacturing process however, not in the major(ip) way. This is solely due to the fact that the production of exclusive dining table is very labour intensive. The last two macro-economic influences environmental and legal impacts are not sufficiently addressed in the case and will be left out in this analysis. On the microeconomic level the get of Porters five forces will be used to get wind competitive forces that affect the firms business decisions.First, the entry barriers are depict as very low, which increases the risk of potential new competitors for Canadel. This might give reason to establish the firm as a market leader in the industry in order to threaten potential new competitors. This could be important due to about potential competition from the Asian markets. However, this does not necessarily mean loosing all of the firms customers if competition increases because Canadel produces a very specialised product, which cannot be easily copied. Nevertheless, it can complicate Canadels business strategy and force them to decrease costs in order to possibly decrease its very high prices for dining furniture.Another fact is that Canadel has a very adept relationship to its suppliers and staff, which enables the firm to profit from this loyalty if competition increases. Summarising, it can be express that boilers suit competition is low in this industry. The threat of substitutes can be described as relatively low because people who can afford to invent around $7,000 for a dining table would in all likelihood not procure furniture at firms like IKEA. Moreover, Canadels products seem to be very unique and therefore hard to find anywhere else. Analysing the bargaining world power of suppliers it can be said that the firm operates with many smaller suppliers in the region of Quebec. Thus, a low bargaining power is place. Compared to that the bargaining power of customers is characterised as significantly stronger because Canadel produces very unique products, which addresses a specified runner of customers. This could lead to problems if sales decreases and might cause the company into agitate and force them to adjust for this changes. Internal environmental analysisThe next part describes the internal factors which influences the firms operating strategy. This can be established by a SWOT analysis to detect the firms strengths, weak nesses, opportunities and threats. integrity of the most important strengths Canadel can present is the large subcontractor network, which it can rely on. Long-time relationships are important for the firm, as it knows most of its stakeholders from the very beginning. Therefore, controversies and conflicts are probably less frequent and decrease the fear of shortages in resources used for the production process. Further, Canadel has a well developed retail network, which shortens its delivery time compared to its competition. A next strength is the uniqueness of its products and its high quality, which is very much appreciated by the consumers.The high price of Canadels products can be identified as a weakness and might decrease its potential number of customers. Maybe it might be valuable to think about an additional production course of instruction that is cheaper and hence affordable to more people. A kick upstairs weakness is the just-in-time (JIT) inventory system that coul d easily cause shortages although the firm accounted some time lack due to human errors. That JIT inventory system can be of course also identified as a firms strength. Canadels opportunities are already recognised by the blowup in the U.S. market, which could also be extended to the western part of the U.S. The already mentioned cheaper product line could be an opportunity to attract more consumers and to increase sales or to broaden the firms product segment. study threats of the company are the Asian manufactures, which are likely to produce cheaper products and therefore might capture some of Canadels sales.Moreover, it can be said that Canadel has a major competitive advantage in producing high quality and unique dining furniture. It has the capabilities and resources, which is supported by the geographical location. A strong value chain can be identified with a good stakeholder network and a good infrastructure. These factors facilitate the firms operating position by focusi ng on the resources, capabilities and resources of Canadel.ConclusionIn conclusion it can be said that Canadel managed to establish itself with a strong position in the fast growing dining room market. It has many opportunities to improve this position and expand its business by increasing its product line and thus attract more consumers. Further, it needs to pay attention to assertable new competitors entering the market. Therefore, the philosophy to grow when its time to grow should not be taken too seriously because this might cause trouble to Canadel. It has to adjust to demographic and environmental changes. However, it should maintain its unique business nicety and operation strategy.ReferencesJohnson G., Whittington R., Scholes K. (2008). Exploring Corporate Strategy (9th edition). Harlow UK Pearson Education. Mark K., Hebert L., Crossan M,. (2001). Meubles Canadel Looking towards the future. Richard Ivey School of Business, University of westward Ontario.