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Section 3. Market Analysis

The furniture market in India is approximately Rs. 65,000 crore currently, with 80% in the unorganized sector. The market is projected to grow at 30% between 2009-2015. Supermarkets, specialty stores, and online stores are growing rapidly at rates between 10-25% annually. Key factors driving market growth include increasing population, income, real estate growth, and quality awareness among consumers. Barriers to entry are low due to industry fragmentation and growing demand. Competition is moderate as the industry transitions from unorganized to organized. Supplier bargaining power is low due to abundant supply. Customer bargaining power is high due to price sensitivity. Online retailers are gaining popularity while premium brands and innovative products are growing segments.

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46 views

Section 3. Market Analysis

The furniture market in India is approximately Rs. 65,000 crore currently, with 80% in the unorganized sector. The market is projected to grow at 30% between 2009-2015. Supermarkets, specialty stores, and online stores are growing rapidly at rates between 10-25% annually. Key factors driving market growth include increasing population, income, real estate growth, and quality awareness among consumers. Barriers to entry are low due to industry fragmentation and growing demand. Competition is moderate as the industry transitions from unorganized to organized. Supplier bargaining power is low due to abundant supply. Customer bargaining power is high due to price sensitivity. Online retailers are gaining popularity while premium brands and innovative products are growing segments.

Uploaded by

ajay_5284
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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Section 3.

Market Analysis
A. Market Identification: The furniture Market: electronic furniture in India
B. Actual and Potential Market Size and Growth
Market size: Approximately Rs 65000 crore currently
Out of this about 80% is falling in to unorganized sector
India domestic

2009
$7b

2015
$10b

Projected Growth
+30%

Market Growth
Supermarket growing rapidly
Specialty store growing at 25% annually
Online store growing at CAGR of 10-12% annualy
Factors Affecting Sales Levels

Growing population
Increase in disposable income
Growth in real state sector
Growth in organized retail
Rising quality consciousness in indian consumer
Growing no. of educational institutes
Government regulation
FDI

Segments with High Unrealised Potential


As Indian households spend less for furniture on average ($100 / year) than the rest of the
world, there may be potential for growth
C. Market Profitability Analysis
Barriers to Entry
Highly fragmented industry
Domestic demand is increasing rapidly due to rise in per capita income
Industry is not investment intensive
So overall barriers to entry in this industry is very low

Competitive rivalry
Transitioning from highly unorganized to organized
Not many big competitor in organized sector
Overall competitive rivalry in this industry is moderate
Threats of Substitutes
As such there is no significant threat for substitute
Bargaining Power of Suppliers
Suppliers of this industry are highly unorganized, import of raw materials have also become
easy and as of now there are abundant supply of raw material. So bargaining power of
supplier is very low.
Bargaining Power of Customers
Demand from key user segment is increasing, majority of customers are still price sensitive
and there is demand for lifestyle and customized product. So bargaining power of customers
is high in this industry.
D. Cost Structure
Unorganized firms have lower cost because of no expenditure in advertising, promotion, and
distribution.
Specialised firms have higher costs.
Online firms are charging less due to less distribution channel

E. Distribution System

Major Channels
Unorganised market is dominant in terms of quantity they deal with (80%) and they use
direct marketing
Mass merchandisers handle about 14% of market and are increasing rapidly.
Furniture are effective traffic builders in supermarkets and mass merchandisers.
Suppliers are generally located in local areas.
Super stores & franchisees handle most premium brands and some national brands.
Observations / Major Trends
Forward integration.
Use of innovative materials.
Kids and institutional furniture gaining popularity.

Use of recycled woods.


Modular kitchen.
Rising popularity of traditional furniture.
F. Market Trends and Developments
Premium brands have grown, and most producers are introducing new & innovative products
in this area.
Online retailers are gaining popularity.
G. Key success Factors
Present
Brand recognition
Product Quality
Access to major channels
Gain market share in premium brands
Introduction of new products
Cost reduction.
Innovative design

Future
Capture the trends of consumers.
Follow the Distribution
Online retailers

FDI
Section 5. Internal Analysis
A. Performance Analysis
Objective Area
1. Sales

Objective
Rs 5000 crore by 2016-17

2. Profits

Gross profit margin will be


around 40%

3. Quality / Service

Best quality in industry

4. Customer satisfaction

Will be given highest


priority

Status and Comment


Growing demand and
innovative design of godrej
will help in achieving this
Less distribution channel
will increase the profit
margin
Godrej will use its core
competency to give best
quality
This will help in increasing
brand image and market
share

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