ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 32: Business Strategy (574)

Submission date 25/09/2020 Date received (1st submission)

Re-submission date Date received (2nd submission)

Student name Pham Cong Bach Student ID GBH190209

Class GBH0807 Assessor name Nguyen Thuy Linh

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Contents
I. Introduction ............................................................................................................................................................... 3
1. Identify the strategic context of the company: .................................................................................................... 4
Ashley Furniture Mission Statement: “Improve quality, reduce cost, do more business, be profitable, and stay
in business.” This declaration of mission expresses the proud history of the organization and our desire for the
future. This is the mantra that guides them to do everything that the business does. The company consistently
aims to deliver the best quality at the best prices, followed by the best service in the industry, from design to
fulfillment.. (Ashley Furniture Mission, Vision & Values, 2017) ............................................................................... 4
2. Porter 5 forces ...................................................................................................................................................... 5
Competitive rivalry................................................................................................................................................ 5
Power of buyers .................................................................................................................................................... 5
Power of suppliers: ............................................................................................................................................... 6
Threat from New entrants: ................................................................................................................................... 6
Threat from substitute products: ......................................................................................................................... 6
3. Pestel analysis ....................................................................................................................................................... 6
Political.................................................................................................................................................................. 6
Social ..................................................................................................................................................................... 7
Technological ........................................................................................................................................................ 7
Economic............................................................................................................................................................... 7
Environmental....................................................................................................................................................... 8
Legal ...................................................................................................................................................................... 8
4. SWOT .................................................................................................................................................................... 8
Opportunities ........................................................................................................................................................ 8
Threats .................................................................................................................................................................. 9
5. Stakeholder analysis ............................................................................................................................................. 9
III. Conclusion .............................................................................................................................................................. 10
IV. References ............................................................................................................................................................. 10

I. Introduction
Ashley Furniture Industries is the largest retail furniture store brand in North America and one of the
world's leading furniture store brands, with more than 925 stores in more than 50 countries, doing
business as The Ashley Companies. The company manufactures upholstered furniture, as well as leather
and hardwood parts across its more than 15 manufacturing and distribution facilities worldwide, one of
the world's largest furniture producers. The company also sells its Ashley Furniture-branded furniture
items through more than 6,000 retail partners worldwide, in addition to licensing the name of Ashley
Furniture Home Stores. Ashley Furniture was built in 1945 by Carlyle Weinberger and is owned by Ron
and Todd Wanek, a father-and-son duo. The desire for customer loyalty has often powered creative
marketing concepts, quality goods and state-of-the-art manufacturing methods. In addition, the macro
environment has a major influence on the success of the company's business plan. There are a variety of
factors that can impact non-Company entities with environmental factors, and learning these different
factors can help Ashley have a strong potential orientation, helping to recognize opportunities or
relationships. And challenging to the company itself. This essay focuses on external factors that may
affect Ashley.

II. Discussion
1. Identify the strategic context of the company:

Ashley Furniture Mission Statement: “Improve quality, reduce cost, do more business, be profitable,
and stay in business.” This declaration of mission expresses the proud history of the organization and our
desire for the future. This is the mantra that guides them to do everything that the business does. The
company consistently aims to deliver the best quality at the best prices, followed by the best service in
the industry, from design to fulfillment.. (Ashley Furniture Mission, Vision & Values, 2017)

Ashley Furniture Vision Statement: “We want to be the best furniture company!”

To delight the company’s guests, turn houses into homes and change lives for the better... together .
(Ashley Furniture Mission, Vision & Values, 2017)

The Ashley Companies (Ashley Furniture Industries, Inc.) has now become an industry leader as the
largest manufacturer of quality furniture products in the industry and will continue to pursue the
primary goal of “maintain good benefits and control costs.” (Wisconsin Business, 2017)

Every company needs a strategy to outline their organisation's shared goals. For the success and
sustainability of any business venture, a well-outlined business strategy is essential. Organizations may
lack direction, effectiveness and profitability without one.

One of the biggest role of a business plan is the direction it can give your organisation. Setting up a well-
planned corporate strategy ensures that the whole company is working for the same goals and infuses
workers with a sense of mutual responsibility. In addition, business strategies allow you to assess the
success and development of your company against your desired objectives. Following a business
strategy will allow you to measure success and better identify areas that require improvement in future.
Businesses need to be responsive to change in our new innovation-focused culture. Your organization
will be able to predict and meet the changing demands of the current market with an effective business
strategy. Companies will help detect new market trends and adjust their strategies as needed by
evaluating and updating customer preferences and needs. The last part is that the methodology is what
guides business decisions. An efficient plan will help you determine where your efforts and assets are
best invested by helping organizations recognize their strengths and weaknesses. In ensuring that the
company has a successful and sustainable future, these decisions are critical. (The importance of
business strategy, 2019)

For example, Customer Relationship is the first Apple business strategy to get them to success. In
providing stellar customer service, Apple has always made a tremendous point and has been able to
facilitate this with its AppleCare service and by employing knowledgeable sales and service personnel to
cater to customers in need. In terms of customer relations and support, this has helped Apple set itself
apart from the rest of the market, increasing its brand loyalty. Apple has concentrated on providing its
customers with the highest level of service and this has been reflected in the increased probability of
customers sticking to Apple Through their purpose-built Apple Stores, which are often located at prime
locations, Apple also builds on this, enabling clients to sample Apple products before making the
purchase. In addition, one of Apple 's core tactics is the Apple Ecosystem, which lies in its ability to
deliver well-designed products and services with a focus on minimalism, clean lines, and solid tones
when it comes to product creation. But it can also be said that, when possible, Apple has made it a point
to concentrate on design and aesthetics over performance. A perfect example of this is the latest
Macbook (laptop) lineup. Apple has lost the capabilities of heat dissipation and has included a thinner
keyboard, which is fraught with problems such as not working if there is less dust between the keys, all
in the search of maintaining a thin and sleek design. But this strategy has still worked out fine and in
favour of Apple. The average consumer mostly prefers thinner and quieter laptops. (Sivakumar, 2020)

2. Porter 5 forces
Competitive rivalry:

In the home furnishing industry, the degree of competitive competition is moderately strong. The fight
for market share is not as big as in many other markets, but Ashley still has a large number of rivals, such
as IKEA, HNI, Steelcase, ... The super stores and brand shops also offer home furnishing items in addition
to the home furnishing brands that compete directly with Ashley, and pose a competitive challenge to
Ashley. Ashley's popular and reliable image, its marketing strategies and other factors have helped it
attract a broad consumer base, such as affordable pricing. These variables serve to minimize the
competitive hazard of the other brand. Overall, the level of competitive rivalry gets to be moderately
high.

Power of buyers:
The bargaining power of consumers in the manufacturing sector for furniture and home appliances is
enormous. Ashley consumers are usually price sensitive and their bargaining power is strengthened by
this situation. Furniture buyers have data about the list of furniture sellers and the benefits and
drawbacks of each brand, with positive consequences for their bargaining power. The competition is
intense and, as such, there is a long list of people who can purchase from furniture retailers. In addition,
their bargaining power is greatly fuelled by the absence of switching costs for consumers. In other words,
there are no extra costs, which relate to the sum of their bargaining power, for consumers to start
purchasing from the competition.

Power of suppliers:
The supplier's negotiating power is strong because suppliers have hundreds of options for multiple local
and foreign furniture manufacturers to sell their raw materials. Wood is an intimidating resource and the
suppliers of this material take the dominant position to negotiate with businesses. Ashley recognizes the
role and strength of suppliers and gives them the appropriate benefit of maintaining proper and
productive partnerships with suppliers to provide continuous access and supply of goods to make a
positive impact on the market.

Threat from New entrants:

The threat of market entry and capturing of market share by new entrants is low. On a smaller scale,
new brands can join, but then they will not have any significant impact on Ashley 's market. In the home
furnishings, there are many players, most of them small players. It will take time, effort as well as
investment if a new company enters the market to develop into a large brand and gain a large market
share. Innovation and strategy, in addition to infrastructure and human capital, will take time and
require substantial investment. Apart from operations, marketing is also a big expense. The barriers to
entry are tiny, but in order to become a big and well-known brand, there are still some significant
obstacles. So, all of these variables mitigate the threat of keeping it low to moderate by new players.

Threat from substitute products:

Furniture for human beings is not a substitute and furniture is a necessity for human beings to live.
Furniture types, styles, and designs have constantly changed, but the demand for furniture has
increased. It is important to note that the product's invention is not a substitution, but the product's
enhancement. The replacement of wooden furniture with artificial wood is not a substitute but a
development in the same product. A subtitle for natural wood, but not the furniture, is artificial wood. In
short, there is possibly no near substitute for furniture that brings the threat of substitutes to the lowest
level.

3. Pestel analysis
Political
Ashley operates in over 50 countries. There are political powers in every nation and they influence
companies. All of them are influenced by political powers, from supply chain processes to sales. Political
stability contributes to economic stability, which in turn implies higher revenues and earnings. Apart
from that, the attitude of the government towards foreign brands and its policies are also significant.
China has been acting in recent years to eliminate the political barriers to foreign brands, leading to an
increased presence of international brands in these markets. Ashley plans to conquer the Asian emerging
markets. Large brands like Ashley will have to battle to reach these markets as these barriers slowly
decrease. In addition, China recognizes Taiwan as an integral part of China 's territory. After seeing
Ashley package boxes that displayed Taiwan and China as different countries, Ashley recently faced
tremendous criticism from the Chinese media and public. (Brown, 2016) There are other political forces
that can affect Ashley and other furniture brand include the level of corruption in the country,
bureaucratic approach and political decision making and mind set.

Social
China's demographic structure is moving from a young population structure to a desirable age structure,
with 805.67 million people engaging in an abundant labor force (Labor force in China from 2008 to 2018,
2018). It can be asserted that China is a populated country with a high consumption-to-income ratio with
a young population structure. In addition , the rise in the living conditions of Chinese people helps more
people to buy high-quality and respectable furniture and luckily Chinese people are also care a lot about
their furniture and want to show beautiful furnishings to their guests. This makes the furniture company
like Ashley more potential to get profits in the future. Furthermore, a new generation between the ages
of 25 and 35 with a relative high education background and a very impulsive buying of international
products has been generated by the one-child policy. The level of Chinese consumer loyalty is also high
for large brands. Therefore, it has a good implication for Ashley furniture company and open
opportunity for the firm to catching their attention would help Ashley build future success.

Technological
China has also steadily grown and evolved alongside the growth of digital technology in the world. New
technology such as online updating and upgrading have been modified to assist customers with stock
viewing, connectivity, online shopping , online payment and customer support. With this development,
Ashley can reach customers and provide a better shopping experience in a more efficient manner that
does not require. From there, the consumer expectations are heightened and most focus has to be on
better customer service. In addition, kiosk creativity in China also assists customers in selecting different
fabrics available in different and same ranges. Therefore, they can easily incorporate their technologies
to improve productivity in their work when Ashley collaborates with China.

Economic
With annual growth of 6.6 %, China's rising GDP and China's government macro-control stimulate the
growth of domestic consumption. (GDP growth of China, 2019) It is generally believed that China has
great potential for future consumption. In the 35-year plan, China considers expanding domestic demand
as a significant mission. Like other retailers, furniture retailing will also rise as an significant part of
consumption. Therefore, enabling consumers to buy more products of the company and Ashley can sell
their product with higher price. Also, it dose helps to communicate with distributors and suppliers as
well

Environmental
With the rising consciousness of people in China of climate change, it has become Ashley 's enormous
duty to provide sustainable goods and services in one way or another. Ashley promises that it will be as
sustainable as possible. In addition, Ashley is using Chinese local tools to manage GREEN issues, which
include carbon emissions, hazardous disposal, environmental waste processing, and recycling. Ashley
also presented a sustainability strategy paper for 2029 that stresses the use of only sustainable and
recycled materials. Ashley is a big business with 900 + stores in more than 50 countries, but the company
is committed to meet this aim by 2029. They are investing heavily in solar and wind panels and are also
sourcing renewable sources of wood and cotton. (Ashley’s annual report, 2018)

Legal
Ashley receives support, but due to legalization discrepancies between western China and eastern China,
it faces legal challenges in some instances. Other barriers, such as corruption, copyright and the
reluctance of local authorities, still exist. In this scenario, Ashley often faces a dilemma.

Comparing the macro environmental factors of Ashley using PESTEL analysis shows that the business has
performed well as needed by implementing new changes. Before entering the Chinese market, Ashley
must face all the environmental factors, but they have implemented the right policies and shown how
they have achieved success in China. They have gone through many challenges in decades of Ashley 's
experience, but the company remained strong and focused on its policies and overcame all the obstacles
that occurred, whether political, economic , social, legal , technological or environmental.

4. SWOT
Opportunities
The global economy maintains a stable rate of growth and a steadily improving labor market. (John
Group, 2018). A rise in home sales has been generated by the growth of the economy. Increased sales of
home furnishings have been made possible by the housing sector. Additionally, through their website,
consumers can buy Ashley goods. As years go by, online shopping is becoming more mainstream.
Especially during holidays like Black Friday, where people want fantastic deals to avoid long lines. By
selling more goods online, Ashley is in a firm position to accentuate its revenues. In addition, attracting
the younger generation is important, as they will be the main buyers in the coming years. Ashley hopes
to draw its low-priced, modern and trendy goods to the new generation. Because of these
characteristics, young people are willing to buy and furnish their homes with Ashley products. (Ashley’s
Strategy, SWOT and Corporate Finance Report, 2017)
Threats
There are powerful market forces in the furniture industry that could affect Ashley's market value. Many
businesses have joined these markets, drawn by customer demand and expected returns from the
household and furniture markets. In order to succeed within the market, Ashley needs to improve its
exclusive qualities. (Ashley’s Strategy, SWOT and Corporate Finance Report, 2017) Furthermore, stable
profitability has increased the number of players in the industry over last two years which has put
downward pressure on not only profitability but also on overall sales and the company also can face
lawsuits in various markets given - different laws and continuous fluctuations regarding product
standards in those markets.

5. Stakeholder analysis

There are some important stakeholders involved in Ashley, including consumers, suppliers, staff,
competitors, and top management. Ashley must use any single measure for each stakeholder to ensure
his or her own interests.

The top management team are those who, while running the firm, hold the great power of Ashley
Furniture Industries. Ashley places them in Manage Closely with this stakeholder and consults with them
whenever takes a decision and guarantees his rights.
 In addition, it can be stated that the client was the focus of business operations at Ashley Furniture and
considered as the most important stakeholder group by the company. They have buyers' power that
directly affects the company's interests and survival. These stakeholders, combined with affordable
costs, are interested in higher quality goods and services of high quality. Through a large range of
affordable home improvement products, along with high quality customer support, Ashley satisfies
customers. The company's shops have experts who provide clients with advice. Thus, Ashley corporate
social responsibility efforts satisfy the interests of customers as the top stakeholders of the business.

Next, employees, job protection, high salaries, equal work practices, as well as career growth are the
interests of this stakeholder group. In this respect, Ashley provides knowledge-enrichment training
programs. At the company's stores, the team-based approach also encourages on-the-job learning and
organizational learning. Furthermore, the organization provides above-average salaries. Ashley's
corporate social responsibility strategies thus serve workers' interests as stakeholders.

Suppliers in the Ashley business are a vital element and a large stakeholder group. The interests of these
stakeholders are to continue the company's successful operation. Through its Supplier Diversity
Initiative, Ashley tackles these interests, seeking to attract more suppliers and ensuring them have long-
term relationships with the company. Through these corporate social responsibility strategies, Ashley
effectively supports the interests of suppliers as stakeholders.

III. Conclusion
In order to define business development, business strategy is necessary. There are many important
factors that impact to the business strategy. Besides we also apply effective tool such as SWOT analysis,
PESTLE analysis, and Porter’s five force model. These factor will contribute for the success of business.

IV. References

alacrastore.com, 2017. Ashley Furniture Industries Inc. - Strategy, SWOT and Corporate Finance Report. [Online]
Available at: http://www.alacrastore.com/cgi-bin/alacraswitchISAPI.dll
[Accessed 20 September 2020].

Brown, T., 2016. Ashley Furniture Industries, Inc. 1st ed. [Ebook] Mississippi: Belhaven University
Available at: https://www.academia.edu/35227106/Ashley_Furniture_Industries
[Accessed 20 September 2020].

comparably.com, 2017. Ashley Furniture Mission, Vision & Values. [Online]

Available at: https://www.comparably.com/companies/ashley-furniture/mission
[Accessed 20 September 2020].
incfact.com, 2018. ASHLEY FURNITURE INDUSTRIES Revenue, Growth & Competitor Profile. [Online]
Available at: https://incfact.com/company/ashleyfurnitureindustries-arcadia-wi/
[Accessed 20 September 2020].

marketwatch.com, 2020. Global Furniture Market 2020 Key Stakeholders, Growth Opportunities, Value Chain and
Sales Channels Analysis 2025. [Online]
Available at: https://www.marketwatch.com/press-release/global-furniture-market-2020-key-stakeholders-
growth-opportunities-value-chain-and-sales-channels-analysis-2025-2020-07-12
[Accessed 20 September 2020].

Sivakumar, B., 2020. Understanding Apple Business Strategy. [Online] feedough.com

Available at: https://www.feedough.com/apple-business-
strategy/#:~:text=One%20of%20Apple's%20main%20strategies,clean%20lines%2C%20and%20solid%20tones.&tex
t=But%20it%20can%20also%20be,aesthetics%20over%20performance%20when%20possible.
[Accessed 20 September 2020].

statista.com, 2018. Labor force in China 2008-2018. [Online]

Available at: https://www.statista.com/statistics/282134/china-labor-force/
[Accessed 20 September 2020].

vlinkd.com, 2019. The importance of business strategy. [Online]

Available at: https://www.vlinkd.com/future-links/the-importance-of-business-
strategy/#:~:text=Drives%20decisions%20%E2%80%93%20Strategy%20is%20what,a%20profitable%20and%20sust
ainable%20future.
[Accessed 20 September 2020].

wmc.org, 2017. Wisconsin Business. [Online]

Available at: https://www.wmc.org/wp-content/uploads/HCBP-Ashley.pdf
[Accessed 20 September 2020].

worldbank.org, 2019. GDP growth (annual %). [Online]

Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=CN
[Accessed 20 September 2020].