Pallister Case Study Essay

Background and ProblemPalliser Furniture Ltd. is Canadian second largest furniture company. They currently have production facilities in Canada, Mexico, and Indonesia. Due to increasing free-enterprise(a) pressures from Asia, Palliser Furniture must decide whether to puff out into the Chinese grocery store, and if so done which entry strategy?SWOT ANALYSISInternal Analysis (Firm)Strengths1. defect Name Recognition Palliser has high brand name recognition specially domestically in Canada with the majority of its revenues are generated and it is known for its innovation, high quality, and modern design. 2. Recruited product managers/designers from all across the world including Sweden, Hong Kong, and Italy. 3. New distribution road finished the dealer-owned stores was real successful.Weakness1. Employees lay off at the Winnipeg factory. downsizing activities such as this often decrease employee morale, impact employees perception of handicraft security, and increase turn e verywhere rates.External Analysis (Industry)Opportunity1. Chinas 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 woos and high-quality workers. along with minimum 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 tilt America, Japanese, and Italian firms had established factories in China. Strong competition that will repugn for the same skilled employees. 2. Chinese language and cultural barriers.Industry attractive forceChina has made significant progress in the furniture market and will likely continue to see further growth receivable to its low labor costs and low tariffs maki ng this a very attractive market for Palliser.Strategic AlternativesA) Maintain status quo (Do not decorate in China)Pro Simple goldbrick Lost market authorisationity and viable cost savings B) Enter Chinese market through subcontracting with another firm Pro Lower involvement, requires less financial commitment, and reduces bump Con Conflict or unable to meet delivery dates, and so forth C) Expand Palliser relationship with China through foreign direct enthronisation (wholly owned) Pro Cheaper labor and allows Palliser to focus on cost leadership strategy. Con Higher risk, more involvement requiredRecommendation/ImplementationIn order for Palliser Furniture to remain competitive it critical for them to invest and expand into China immediately. Palliser should manufacture the motion products in this market due to the possible savings of $130 per product and identity the most effective market distribution channels in order to better achieve its cost leadership strategy. However , before entering this market Palliser should conduct a entire industry analysis in order to understand any potential barriers such as Chinas laws and regulations, shipping, tax structure, and supply of understructure 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