Pallister Case Study Essay

Background and ProblemPalliser Furniture Ltd. is Canadian second largest piece of furniture company. They currently urinate harvest-homeion facilities in Canada, Mexico, and Indonesia. Due to increasing competitive pressures from Asia, Palliser Furniture must decide whether to expand into the Chinese market, and if so through which entry strategy?SWOT ANALYSISInternal Analysis (Firm)Strengths1. Brand expose Recognition Palliser has high brand name recognition especially domestically in Canada with the majority of its revenues ar generated and it is known for its innovation, high quality, and contemporary design. 2. Recruited product managers/designers from all across the institution including Sweden, Hong Kong, and Italy. 3. New distribution credit line through the dealer-owned stores was very successful.Weakness1. Employees lay off at the Winnipeg factory. Downsizing activities such as this ofttimes decrease employee morale, impact employees perception of job security, and in crease turnover rates.External Analysis (Industry)Opportunity1. chinawares total furniture output value was $20 billion and accounted for 10 per cent of world total furniture output value. 2. Chinas furniture export was growing at an annual rate of over 30 per cent. 3. China could offer Palliser lower labor movement costs and high-quality workers. Along with minimal income tax and social costs is giving China a solid competitive position. 4. Producing the same product in China was up to 30 per cent cheaper compared to North America. 5. China offered cheaper supplies including leather, wood, foam, and packaging.Threat1. Increased rivalry America, Japanese, and Italian firms had established factories in China. Strong competition that will compete for the same skilled employees. 2. Chinese language and cultural barriers.Industry AttractivenessChina has made significant progress in the furniture market and will likely continue to see further growth due to its low labor costs and lo w tariffs making this a very attractive market for Palliser.Strategic AlternativesA) Maintain posture quo (Do not invest in China)Pro SimpleCon Lost market potential and practicable cost savings B) Enter Chinese market through subcontracting with another firm Pro light involvement, requires less financial commitment, and reduces risk Con Conflict or unable to meet delivery dates, etc. C) Expand Palliser relationship with China through foreign direct investment (wholly owned) Pro Cheaper labor and allows Palliser to think on cost leaders strategy. Con Higher risk, more involvement requiredRecommendation/ implementationIn establish for Palliser Furniture to remain competitive it critical for them to invest and expand into China immediately. Palliser should occasion the motion products in this market due to the possible savings of $130 per product and identity the some effective market distribution channels in order to better achieve its cost leadership strategy. However, befor e entering this market Palliser should conduct a thorough industry analysis in order to understand any potential barriers such as Chinas laws and regulations, shipping, tax structure, and supply of alkali in order to prevent any future problems (as experienced in Mexico).ReferencesPaperadepts.( 2011). Pallister furniture, S.W.O.T. analysis. Retrieved from http//www.paperadepts.com/paper/Pallister-furniture-S.W.O.T.-analysis-185519.html Writework (2005). Pallister furniture, S.W.O.T. analysis. Retrieved from http//www.writework.com/essay/pallister-furniture-s-w-o-t-analysis