MUJI External Analysis

PESTLE- Economic

Market size of Malaysias furniture industry- RM33 billion and expected to

grow
Malaysia produces mainly wood and timber products
The country has trade surplus ( Exports USD120.9 billion vs imports of
USD111.9 billion_
MUJI may have strong competition from locals but Malaysias furniture
industry is doing well
Husin, 2011
PESTLE- Social
Demographics
Growth rate of Malaysia is falling gradually, from 1.3% to 0.2% in 2016.
This means that furniture demand is falling.
PESTLE- Social

Malaysias working population is most likely to have families and require more
furniture as well as the purchasing power to do so.
Their population has had a 0.2% increase from the previous year. (Mahidin,
2017)
PESTLE- Social
Culture
In 2017, the Bumiputera is the largest ethnic group in Malaysia with 68.8% of
the population
Chinese consists of 23.2% and Indians at 7%
Other ethnic groups remain at 1%
MUJIs bland white and beige products are suitable for Malaysians, especially
bumiputeras as they do not have taboos against colours
However, white may indicate mournings for Chinese and Indians
In is recommended that more red products be introduced as they signify
happiness and luck for the Chinese and purity and good energy for Indians
Smith, 2013
PESTLE- Technological

Significant changes due to internet and globalization

Most stores have moved online or have both online and physical store
Apps expansion- IKEA Places
IKEA Places is an app that uses augmented reality to help customers with
furniture measurements and design
Lee, 2017
Porters Five Forces- Bargaining Power of
Customers
High competition causes customer bargaining power to increase
Many alternatives- Both from local and international companies
Malaysia is the top 10 largest exporter of furniture (MIFF, 2017)

MUJI has relatively high prices, for example a dining chair:

MuJI- MYR899
MF Design- MYR 449.50

Information is easy to obtain- especially from online retailors so consumers have an

easy time when comparing prices
Porters Five Forces- Bargaining Power of
Suppliers
MUIJ has low supplier bargaining power
Undifferentiated products- simple design and no brand strategy
Consumers cannot see the difference between products

Many suppliers offer cheaper and cheaper prices

Durham, 2015
Porters Five Forces- Threat of New
Entrant
Malaysias wooden and rattan furniture industry is worth RM20.03 billion and
forecasted to grow
This makes industry lucrative, and many companies will enter
Government assistance also helps- especially for SMEs to help achieve the
2020 vision.
MITI, 2005
However, issue like lack of skilled labout, access to financing, and
competitiveness from the global front may hinder SMEs still.
Porters Five Forces- Threat of
Substitutes
MUJI only provides residential furniture, as in furniture meant for personal
consumption only.
A substitute could be products like:
Custom made furniture- fixed installation that cannot be moved
Non- residential furniture- industrial furniture like those in restaurants or in hotels

Many people opt for these options, willing to sacrifice design aesthetics in
exchange for durability and lower costs.