Question

Unique Furniture Limited is one of the leading producers of wood furniture in Ghana and is also well known in the housing estate industry. Its products include household furniture, office furniture

and industrial furniture. In the housing estate industry, it has partnership agreements with contractors to roof houses, fix doors and windows and provide all the furniture in the estate houses and office accommodation units that are being constructed by the latter. Its unique finishings are enhanced by the modern equipment, well-trained and flexible workforce including carpenters, joiners and other staff that are in its workshops and showrooms spread around the country.

The success of Unique Furniture is partly driven by its parent company, PK Wood Processing, a timber processing company based in Samboa that supplies quality wood to the latter on a regular basis and at a reduced cost. From the supply of materials through processing, transportation of finished products and installations, the company appears to have a perfect coordination of activities that is making it perform better than its competitors. The company has a five-year maintenance free policy with its customers.

Required:

1. Describe how Unique Furniture is using the following strategies to perform better than its competitors:

1. Cost reduction
2. Quality products
3. Capacity and location of business                                                        

(b) Draw a value chain to illustrate the activities of Unique Furniture Limited.

Answer 1

Answer a:

i. Unique furniture is a subunit of its parent company PK wood processing. PK wood processing is a timber processing company based in Samboa and it supplies quality woods to the unique furniture at the reduced cost. The wood provided by PK wood processing is the raw material for unique furniture which they use for the production of the finished product. Since, unique furniture obtains the quality raw material at the reduced cost from its parent company; hence it helps the unique furniture in the reduction of the overall cost of the production of the final product and obtains the economies of scale. Using this strategy of obtaining the raw material from the parent company at the reduced cost and the therefore getting the economies of scale, unique furniture is performing better than its competitors by serving the market and its customers with the quality products at the reduced prices.

ii. Unique Furniture provides quality products to its customers and uses this strategy to perform better than its competitors while manufacturing the products, unique furniture receives the quality raw material of timber at the reduced cost from its parent company PK woods processing. Unique furniture provides the finished product to its customers that has a unique finishing; the credit of which goes to its production process which uses modern equipments, highly trained and flexible workforce that work in the workshop and the showrooms of the company so as to serve the customer at their point as well. Unique furniture has a perfect supply chain where all the activities including supply of materials, its processing, transportation of finished products and installations are perfectly coordinated. This helps the unique furniture in the production of the high quality products and helps in supplying the quality products to its customers.

iii. The capacity and the location of the business help unique furniture to perform better than its competitors. As far as the capacity is concerned, unique furniture is having the modern equipments, well trained and flexible workforce to work in its workshop. The company also processes, transports and installs the finished product at the place of the customer with unique finishing. This adds to the better customer experience as the customer gets the product and the service at their door step.

The company, unique furniture is located in Ghana and has its spread across the country through its showrooms. Products are produced in Ghana and these products are transported to the showrooms. The customer can arrive at the showroom located in their cities and can purchase the product of Unique furniture. This makes the company to reach each and every customer located throughout the country and adds a competitive advantage over its competitors.

Answer b:

A value chain to illustrate the activities of Unique Furniture Limited is given below: