City Furniture and Mattress compete in the retail furniture industry. They are competing within the Greater Toronto Area. The companies that are compete against City Furniture and Mattress in the industry include smaller local firms and big-box chains like Leon’s Furniture and The Brick.
The companies are competing on the basis of low prices. The competition from the local companies are putting negative pressure on the price, making it difficult for City Furniture and Mattress to stay relevant in the industry.Regulatory environmentCity Furniture and Mattress has to follow Laws and Regulations regarding their manufacturing plant. They have to follows regulations regarding:“Formaldehyde Emissions from Pressed Wood ProductsGreenhouse Gas Reporting ProgramNational Emission Standards for Hazardous Air Pollutants (NESHAP):Metal Furniture (surface coating) Wood Furniture (surface coating) Significant New Alternatives Policy (SNAP) Program: EPA's program to evaluate and regulate substitutes for the ozone-depleting chemicals.
” (United states environmental protection agency, 2017)They must also have a business license to start a business.Economic environmentExternally:City Furniture and Mattresses sales were continually growing, but City Furniture and mattress had to deal with the profitability due to the local competition and big-box stores. Singh choose to address these challenges by trying to expanding global outsourcing, capital investment, and vertical integration. Singh’s previous attempt at vertical integration and the manufacturing products did not have the success that Singh had hoped for because Singh had hoped that his Dad would be able to use his connections to try and get the necessary equipment and materials to get the business up and running. However, Singh did not expect that his father would be dealing with a personal issue which would put him out of the manufacturing operations.
This component, and the legal battle with the building owner because of the rent increase at the Pickering location further increased the challenges Singh and his company had to face.Internally:Singh and his Dad Baskar Singh tried to get into the import wholesale furniture market. Singh lacked the experience in the selection of large quantity selection, product management, and business-to-business sale, because of that it resulted in some difficulties. This, and poor decision making left the company in danger.
For example, Singh ordered ninety dining rooms sets from a Chinese manufacturer. When he received the product it wasn’t what Singh purchased. What he actually received were larger pieces of furniture that needed to be assembled, but he accepted the order still. This left City Furniture and Mattress with too much inventory that was not easy to market because of how big they dining room sets were. It forced Singh to open a new location for an entirely new venue.
Socio-cultural environmentCity Furniture and mattress is mostly targeting consumers in the low-medium price range. Their type of customers want the highest quality products but at the lowest price possible, they are picky in terms of the color, design, and size. Their customers would prefer the products with the lower price. In order for City Furniture and Mattress to achieve their target market they try to keep prices of their furniture around 5%-10% above the lowest independent small furniture business. They also try and increase their participation with the customer throughout the buying process so they can increase their customer interaction.
Technological environmentCity Furniture and Mattress should look into technology that will help enhance its productivity, reduce costs, and improve their quality of their products. They should invest in manufacturing equipment to enhance their productivity and be more efficient. This will result in an increase in their profit margin and increase their position in the competitive market.