Case Study: Moda Milano Mobili

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Introduction
Moda Milano Mobili is a medium size furniture manufacturer who primarily crafts living room sofas, chairs and dining room chairs, as well as complementary coffee tables, side tables and dining room tables. Their product style is based on contemporary designs with simple clear flowing lines without many details that using Australian cowhide and native timbers. Other than manufacture, Moda Milano Mobili retails their products through independently owned furniture stores in many cities, like Sydney, Melbourne, Brisbane and Adelaide. In addition, the company plans to open their international market, establish frequent shipping between Australia and north-east Asian to increase its international market share, satisfy the demand of customers. This article focuses on Moda Milano Mobili’s financial position and its competitive advantages in both domestic and international market.

General Environment
(1) Political
From political factors to analyse the current and next few years, the basic political situation tends to stabilized. Peace and development are the two major themes of the contemporary world. Under this situation, world furniture industry also keeps a steady growth trend. China is the biggest competitor and the potential market of Australia. By entering the World Trade Organization, China's tariff barriers have being removed. This basally becomes an opportunity of Australian furniture industry to export their products into China.

(2) Economic
Economic cycle is a response to the economy from the Boom - Decline - Recession – Recovery. According the chart, there is a sharp decline in Australian GDP in 2009 after the 2008’s boom which is not only caused by the America sub prime mortgage crisis but also caused by the significant decrease of raw and proceed materials’ price. Til the 1st and 2nd quarters this year, there is a slight recovery of Australian GDP, which gives a break to the whole Australian industries include furniture industry.

Chart 1 Australian GDP in recently years
Sources from Trading Economics (http://www.tradingeconomics.com)

(3) Social
Up to 7 August 2010, there are 22.4 million people in Australia (Australian Bureau of Statistics), less than 3 people per square kilometer, nearly the least one in the world. The ex-prime minister Kevin Rudd indicated that he had a view about a big Australia which is to increase the population through increase of birthrate and immigrants; and actually, the population of Australia do increased by 2% during these years. However, the new prime-minister Julia Gillard argued that she doesn’t believe in a big Australia, the existed infrastructure can’t burden such increase speed of population. That means, increase people’s purchasing power through increasing the population is impossible during the next few years.

(4) Technological
The most advanced technology is no longer the advantage of Australian furniture industry. Companies from other countries are easy to purchase such technology and use them in their production.

(5) Environmental
Recently, the environment-protection consciousness has been enhanced. People became care about whether the product would harm the environment, as well as whether they could be harmful to people’s health. With the changes of fashion trends, which is more metal and glass furniture gradually replaced the traditional wood and leather furniture, Australian traditional furniture industry is under challenge.

(6) Legal
Australian legal system tends to perfect, especially the tax system. Australia’s tax rate for corporate is 30% which is a good rate comparing with other developed countries such as America, Japan and German which are nearly 40%. Such the low rate is really good for companies’ development, makes them have capacities to expand their international markets, like exporting their products to those developing countries, even their largest competitor China. Chart 2 Tax rate

Market Environment
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