Fella Design Business Plan

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Products

Fella Design will offer handmade furniture for the bedroom, living and dining room, garden including:

Single seat; Rocking chair, bean bag, stool, recliner, ottoman, chaise longue, fainting couch

Multiple seats; Love seat, couch, bench, divan

Sleeping; Bed, hammock, futon, headboard, daybed, sofa bed, mattress, infant bed

Entertainment; Pinball machine, jukebox, chess table, billiard table, Hi fi, Gramophone

Tables; Desk, changing table, workbench, washstand, lowboy, pedestal, monks bench, end table, wine table, dining table

Storage; Safe, wardrobe, wine rack, shelving, hat stand, nightstand, drawer, coat rack, bookcase, chest, cabinetry, baker’s rack, cupboard, pantry, closet

Sets; Vanity set, patio set, dining set, bedroom set, dinette, curtains

Industry, Target Market and Competitor Analysis

Furniture is a fundamental part of our lives. There is always furniture in every houses, offices, public places and so on. This shows that in every country, furniture retail store business is an important sector. In Malaysia, the residential furniture market is blasting. The size of the market in the furniture industry in Malaysia had been driven by the expansion in the residential units (the increasing in the number of under construction condominiums and residences), the increment of disposable income, and the growth in the middle class and high income segments. Products sold by this industry is mainly furniture such as living room furniture, dining room, bedroom furniture, sofas, tables and so on. In Malaysia, there are few key players in the furniture industry for example Hauslife and the most well-known furniture retail store is IKEA. IKEA is a furniture retail store that is well known globally and not only in Malaysia. IKEA’s strengths in the industry include a strong brand name, many variety of design from a wide range of products sold with affordable prices, and IKEA can effectively maintain a low price from cutting cost for example, furniture sold in IKEA have to be assembled by the customers themselves. However, since IKEA concentrated on cost leadership which means that IKEA was set up to be the low-cost producer, IKEA’s main weakness is the inconsistency in the quality of the furniture sold ever since the prices for the raw materials have gone up. In other words, it is very much impossible to maintain the quality standard of the products when a company uses cost leadership competitive strategy. Moreover, given that IKEA has been operating globally, which made IKEA a high scale and large size business, it is unlikely that IKEA can maintain the quality standard across the countries. However, despite that, Fella Design is optimist that IKEA will not decrease its market share because our target market differs from IKEA’s target market. IKEA is targeting younger generation looking for furniture for their rented studio apartment. In other words, IKEA is targeting more towards younger generation with lower income or consumers under budget. To be able to capture a higher market share, Fella’s subsidiary company, Urban Culture has almost a similar concept as the furniture sold in IKEA, the characteristic of the furniture represented by Urban Culture is more towards younger generation but with a better quality than the furniture sold by IKEA and with a lower price range compare to Fella Design’s other subsidiary company, such us American Accents which has a characteristic of classic American concept who only targeting those with high income because the price of a set of sofa that can cost up to RM.50.000. In another word, Fella Design adopted focus differentiation as its competitive strategy in order to compete with its competitors in the furniture industry. A company who adopted focus differentiation as the company competitive strategy seeks differentiation in its target segment in the industry. In a short form, focus differentiation is a company that focuses on providing to buyer with special needs in certain segments. Fella Design segmented their target market in order to get a better market share by targeting those customers who are seeking for a better-quality furniture that will last a longer time and those who have specific preferences of the furniture that they would like to have in the home because Fella Design can basically change the whole sofa as what the customers requested and cater to all needs of different customers’ preferences because of its customizable concept. Moreover, Fella’s Design has competitive advantages over its competitors because first, as the number one fabric importer, Fella Design has a buying power over its suppliers, which is an advantage to the company. Furthermore, Fella Design can manufacture their sofas and their other products by itself since Fella Design does manufacturing at the same time as retailing their products which is very efficient and not time consuming

Marketing Plan

Fella Design owns a total of 14 showrooms with a warehouse on its own all scattered around Malaysia, for instance, in the central of Malaysia there are four showrooms distinctively located in Bukit Subang, Puchong Gate, Petaling Jaya and Ampang. Therefore, the target market would be middle-income to high-income consumers living in the city. We have subsidiary companies that cater different needs for different customers. American Accent, we can say that American Accent is targeting higher income consumers because of the price tag a set of sofa can have. Unlike Urban Culture, that is targeting more towards middle-income consumers that would like simple and fun furniture with an affordable price with great quality.

The current on-going plan of Fella Design is they had decided to cut down on its exports and closed down many showrooms in the recent years in order to focus and maintain on just a few. In terms of sales promotion and advertising, Fella Design has had the biggest warehouse sale in 2014, the most wanted furniture brands warehouse sale, pre-raya showroom clearance, floor display clearance, warehouse sale, not to mention year-end sales and many more. Furthermore, one could also purchase coupon codes, discount vouchers online, for example, a trading in promotion up to rm800 rebate on big sale’s website. Fella Design and Urban Culture both focuses on psychology pricing, for example, setting the price of a couch at rm499 would attract more consumers than setting it at rm500 even though the accurate difference is very small.