European Business to Business Furniture Industry

Topics: E-procurement, Value added, Marketing Pages: 8 (2404 words) Published: December 21, 2010
Business to Business Marketing


Reema Badlani
Yogesh Badlani
Mayur Khanna


E-commerce focuses on solutions that enable enterprises to reengineer their structures and become flexible organizations that are able to corporate with their clients, suppliers, and partners. These solutions help in creating value by improving collaboration, work specialization information sharing and responsiveness. There is a two dimensional classification scheme of interfirm relation. In each of these four typologies interfirm relations are identified: 1. Many to many (E-marketplace)- many buyers and sellers are able to transact, buying and selling of goods and services, asking for cost estimates, offering and stipulating commercial relationships. 2. Many to few (E-procurement)- many suppliers are involved in the procurement process of one or few enterprises. There are two forms of e-procurement: the web based- it allows many suppliers to participate and the other is closed one allows only few selected suppliers. 3. Few to few (E-sell) - a sales channel through which few big suppliers put their products and catalogues at many buyers disposal. There are two forms of e-sell: web based one allows many suppliers to participate and other being the closed one allows only selected buyers. 4. Few to few (supply chain management system) - internet based applications supporting close and strategic relationships between small number of firms.


The case study presents an overview of e-business activities within the European B2B office furniture segment, analyzing the scenarios faced by one of the top companies in this segment, known as “Cadiac.” Cadiac began its activities in U.S at the beginning of 20th century and became a publicly held company in the late 20s. It has become the world’s leading designer manufacturer of office furniture for the last 25 years. It has manufacturing facilities in over 35 locations and an extensive distribution system that enables them to serve market locally. Its products and services are available in over 800 locations around the world. It employs more than 14000 people. The global headquarters is located in United States and the international division is headquartered in Europe. In Europe they have their corporate resources held like marketing and communication, research and development, finance and human resources. In the office industry they are a large number of players participating but a very high number of them are participating at a local level, and most of these are small companies. The large companies have an international reach and only have are present at a global scale.

Small companies segment the low and the middle market segments. They base their strategy on low price and sell products to meet the basic needs of their potential customers. they provide an acceptable level of perceived quality, variety of offers in order to attract new customers and satisfy the old ones and also focus on pre and after-sales service. They offer limited number of products in few options. Example: a table can be either rectangular or waved and only available in two colors. But the advantage that client faces is that the price is fixed and the delivery time is narrowed. Large companies focus is on image and product appearance. They form the product strategy on principles by leveraging space as an asset. They target the top segment with a high positioning of their product, with a highest price and highest value added for the clients. Differentiation is based on consulting services and on the pre and after sales service rather than on price. Cadiac’s adopts the strategy by using workspace as its asset that will ultimately help employees to perform efficiently and effectively. Through research and development they gain a thorough knowledge about the people...
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