Palliser Furniture Ltd.: the China Question

Only available on StudyMode
  • Topic: 1921, 1920, 1918
  • Pages : 3 (423 words )
  • Download(s) : 762
  • Published : March 6, 2013
Open Document
Text Preview
Palliser Furniture Ltd: The China Question

IM – Session 8 Jahan Ara Peerally

#1

Palliser Furniture: The China Question
1. What is Palliser’s strategy - Global, MD, International or TN? 2. What changes in Palliser’s competitive environment may call for a change in its location strategy? 3. Is investing in China a viable long-term strategy for Palliser? 4. Should Palliser go to China or should it expand in Mexico? Why? IM – Session 8 Jahan Ara Peerally

#2

Between 1995 and 2004, China’s exports of furniture have grown 33% per year. 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 8679

millions

682 1995 2004
#3

IM – Session 8 Jahan Ara Peerally

Share of American furniture imports that come from China.
50 45 40 35 30 25 20 15 10 5 0

20 00

20 02

IM – Session 8 Jahan Ara Peerally

20 04
#4

19 90

19 92

19 94

19 96

19 98

 « Provide fashion forward and always fresh modern home furnishings to meet globally positioned group of consumers »  « The style is hip and contemporary. The colors are bold. The lines are sleek. And the look is clean and functional. »  « Twenty free-standing showrooms in USA and Canada »

IM – Session 8 - 2007 Jahan Ara Peerally

#5

Is China viable in the long-term?
Issues to consider: « Follow-the-competitor » strategy and its effects on Palliser. Labour cost advantages in China may change in the future. Chinese workers may become unionised. Anti-dumping factor (post-case issues). Chinese yuan may eventually appreciate. #6

Should Palliser invest in China?
Low costs Yes Environment: •Industry trend •Low labor costs •Comparable quality •Economies of scale IM – Session 8 Jahan Ara Peerally

Product differentiation No Environment: •High transportation costs •Long delivery time •Uncertainty •Difficult to find partner #7

Should Palliser invest in China?
Low costs Yes
Firm resources: •Asian presence •China is developing its own competencies and expertise •FDI...
tracking img