DAHLIA FURNITURE PRIVATE LIMITED

I. Background of the Study

Dahlia Furniture Private Limited is a local furniture manufacturer of standard and
custom-made furniture known for their high quality and elegant wall units, kitchen
cabinets, bedroom sets and dining sets. It made its entrance in the furniture industry in
1972 as a subcontractor to two large furniture concerns, Ching Lin and Diethelm. The
business went well and the company decided to branch into retailing.
The first showroom was set up in a housing estate but this location was later
found to be unsuitable. While Dahlias furniture line was of a higher quality and price
than those of other retailers around the area, the people residing there were mainly from
the lower income group. In 1978, Dahlia moved the showroom to a department store in
the Orchard area. At $4 per square foot, the rent was more expensive than before but
the management had no regrets. Orders began to come in very quickly through this
outlet and turnover soon reached $5 million per annum.
Between 1979 and 1981, Dahlia acquired two factories at Ang Mo Kio and Upper
Thompson at a cost of $ 400,000 and $ 300,000, respectively. The factory at Ang Mo
Kio was rented out on a monthly basis to furniture makers (mainly making dining sets
and custom-made kitchen cabinets) who were also subcontractors to Dahlia. The
company also acquired two more showrooms in the Bukit Timah and Upper Thompson
area in 1978 and 1982, respectively.
II. Objectives

Long Range Objectives: To expand the business operation and to be the leading
furniture manufacturer.
Short Range Objectives: To maximize profit and to increase sales.

III. Main Problem

What way of acquiring inventories should Dahlia employ to maximize profit and
improve the companys position?

IV. Solution

Alternative A: Import all products and continue its high quality and fairly expensive
image with middle and upper income familys clientele.
Alternative B: Expand its production unit and contend with competitors through
lowering of prices to reach a larger market.
Alternative C: To formulate a proportionate inventory acquisition with some products
imported and some manufactured, to drive away competition and at the same
time, maintain its present image, also to reach all brackets of prospective
clientele.

V. SWOT Analysis
Strengths:
High quality of products and elegant image of their furniture
Run the new division with the present designers
Dahlia Furniture is a known seller of imported furniture

Weaknesses:

Dahlia Furniture has a small market
It has a limited product line (wall units, kitchen cabinets, bedroom sets and dining
sets)
Poor management

Opportunities:

There are growing number of families who can afford and are willing to pay
higher price for a higher quality furniture
There is a growing demand for imported furniture
To change the production lines because market supply of modern furniture was
not keeping up with the increasing demand

Threats:

Other companies that offer furniture for a lower price
Powerful competitors including foreign manufacturers and retailers in the
Singapore market
The attitude of buyers toward change

VI. Conclusion/Recommendation

As a conclusion, we believe that it is better for Dahlia Furniture to continue
supplying imported furniture. It is because there is a continuous growing rate of demand
for this product. And Singaporeans prefer imported furniture than locally produce
furniture.
We recommend that Dahlia Furniture should have new sets of products to offer
with the use of new materials. They should also produce products with high quality but
with lower price for the mass market. And instead of focusing on the exclusivity of their
product, they should increase the quantity of a specific design for those customers
having the same preference.