Meubles Canadal: Looking Towards the Future

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Strategic Management in Organisation
Individual Case Analysis Meubles Canadel: Looking towards the future Table of Content
Introduction .................................................................................................................... 2 External environmental analysis....................................................................................2 Internal environmental analysis .....................................................................................5 Conclusion .....................................................................................................................6 References ...................................................................................................................... 7

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Introduction
Meubles Canadel is Canada’s leading manufacturing firm in producing high quality furniture for dining purposes and was established in 1982 by three brothers in Louisville, a small town in the province of Quebec in Canada. It is a privately own company and established itself from a small to a large international operating company with still increasing sales around $125 million in 2000. Between 1987 and 1991 Canadel grew rapidly. This was due to the fact that the firm focused on demographic changes. The families’ size decreased in this time and shifted the demand from the “lunch-corner” and formal dining room segment to dining room furniture to everyday use. Canadel took advantage of this change and started to produce high quality dining furniture. With continued increasing sales, the firm expanded to the U.S market and additionally serves now the eastern part of the U.S with its products. Looking at Canadel in 2000, the firm owns 50% of the dining room market although prices are generally higher than competitor’s prices. At this point in time, the company’s sales were mostly coming from the U.S (75%), 20% from the Canadian market and five percent from Europe and Japan. Further, Canadel’s staff represented 1,550 people of which 800 are directly employed. In the following a case analysis of Canadel will be conducted. The first part represents the external environmental analysis whereas the second part focuses on the internal factors influencing the firm. Ultimately a conclusion will be drawn. External environmental analysis

An external environmental analysis contains a macroeconomic and a microeconomic view on firm’s influencing factors. On the macroeconomic level one could ask a general question for example which environmental factors do affect the firm and its strategic management. It is necessary for Canadel to maintain a coherent strategy that fit in its environment in order to reinforce its distinctive competencies and establish sustainability in creating value to its stakeholders. In order to answer this question a PESTEL analysis will be conducted, where the macroeconomic view is studied. PESTEL stands for political, economic, sociocultural, technical, environmental and

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legal factors, which affect the firm and its strategy. Regarding political factors, the Canadian furniture industry was massively influenced after the introduction of the Free Trade Agreement (FTA) between the United States and Canada in 1989. Trades between both countries have become easier due to the elimination of tariffs and in addition competition increased. However, Canadel was not operating internationally in this time therefore, only the increase in competition could have influenced the firm. The next factor, which influences Canadel, is the economic impact. Exchange rate fluctuations between the U.S. and the Canadian dollar can affect the export to the United States, which can cause both losses and profits for Canadel. At the moment the firm has an advantage because the Canadian dollar has a strong position compared to the U.S. dollar. However, this used to be different and therefore it is important for the three Deveault brothers to take this factor into...
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