Question:
Discuss about the Strategy and Innovation for Australian Furniture.
In modern times the term strategy has become popular and is used almost everywhere. It is mostly used during any business planning because without it the company will not be able to achieve its goal. There is a common misconception about the terms goal and strategy where goal refers to the ambition which a person aims whereas strategy refers to the planning that is required in order to achieve that aim (Kryscynski 2015). The word strategy includes the use of both art and science; it is referred as art as it involves imagination and visualization and referred as science as it requires a lot of research and analytical skills. In recent times in order to establish a proper business set up one requires the use of strategy because it helps to formulate the absolute plan required for achieving a particular aim.
The company that has been chosen for the purpose of this assignment is the Australian Furniture Association which deals with furnishing and design. This company contributes a lot to the furnishing and design industry uplifting the economy of Australia. The Australian Furniture Association also contributed a lot to the employment opportunities in that region by providing job facilities to nearly about thousands of people.
The history of Australian furnishing and design started long before 1900 however the furniture were imported from Britain at the beginning. It has been seen that however by 1830s the Australian furniture business commenced and started to flourish in order to start a new beginning. This furnishing industry has great reputation around every corner of the world for making beautifully structured and durable products which has been created keeping in mind the quality and standard of the products. The company offers diverse range of products both for residential and commercial purposes and from the very beginning focused on customer satisfaction. The company contributed to the employment culture of the region by employing people from the ad joining areas and thus fulfilling the deficit of financial status. In rent years it has been observed that the industry reached to the peak by employing at least 200,000 people in the national level (Carmillo 2015). The Australian Furniture Association has been focusing for a long time in building competitive and sustainable business models in order to promote growth and competition among the members. The government considered the Australian Furniture Association as the voice of the furnishing industry for its wide recognition among the people. The company deals with the manufacturers of both commercial and residential furniture and supplies it to various units which involved retailers, suppliers and stakeholders.
In this regard it can be said that such well known and worldwide recognized industry promotes the business development of Australia by promoting competition and profit motive among the members of the organization. In a globally competitive market this industry provides tough competition to all its local competitors in order to meet all the challenges arising out of current market demands. The Australian Furniture Association competes in order to meet the global challenges and at the same time in order to provide valuable products to its worldwide customers (Bailey 2014). The company from the beginning has been facing a lot of challenges due to increase in demand for imported furniture and competitive pricing. The industry not only targets its domestic customers however it also attracts customers both internationally and within its domestic jurisdiction. The company actively participates in product markets and focuses in offering products which involves high quality and unique design to all its customers.
The Australian Furniture Association provides opportunities in order to promote the need of locally made furniture for its local customers. The company also maintains its professionalism with continuous improvement in its part to provide good quality of products and acting honestly in the process. The company has adapted itself in the new trend; customer’s choice has not remained the same, their taste and preferences has undergone a global change. The company by far has tried to meet this change in demand of the customers and will even meet the standards in future. The resource capability used for the purpose of value creation can be evaluated; resources can be of two kinds- tangible and intangible. Resources can be tangible which refers to the physical assets like land, furniture, machinery, cash these assets are considered as an important part of the company and have a risk of getting damaged both internally and externally. Intangible resources refer to intangible assets like value, knowledge. The company has been acting as a source of knowledge and leadership from the time immemorial and has been providing sufficient knowledge and the opportunity to obtain valuable resources. The industry provides knowledge about the internal and external factors of the industry and promotes the development o supply chain opportunities. The company has a unique trademark of its own which adds value to the name of the industry and in order to retain such brand value it is necessary to prevent the prevailing market competitors from replicating the trademark as well as the products (Carmillo 2015). The future of a furniture industry is dependent on the supply of abundant forest products. The company is currently focused on the development of forest and forest products industry which has been supported by the stakeholders in order to promote the development of both forests and forest products. It should be noted that the abundant use and supply of forest products has contributed enormously to the development of the furniture industry however in recent years there has been seen that there has been a deficit in the supply of raw materials like sawn wood which is an important raw material used in the furniture manufacturer industry (Bailey 2014). In future if such raw materials become extinct then it will pose as a threat to the furniture manufacturer industry of Australia. It has been observed that the use of alternative products can be used in place of the required raw material in order to fulfill the deficit. In this case the use of bamboo has been suggested in order to meet the future requirements as it acts as a useful material for the purpose of making furniture. The company from the time of its existence always focused on the standards and practices in order to safeguard and retain the best quality of products by providing sufficient materials in the making. The company helped in the promotion and circulation of the benefits arising out of the knowledge based on local understanding about the value of product and this paved the way for the need of Australian furniture both locally and internationally. It has been stated that for the purpose of profit maximization mass production techniques has been used in order to meet the daily market demands and competition in the long run. The company through this mass production technique would be able to meet the future targets keeping in mind that the shipping be increased as the industry deals with the supplies of furniture in high volumes.
Conclusion:
In order to establish a good strategy it is necessary to identify the three categories of strategies- intended, emergent and realized strategy. The strategy which is actually followed by an organization is the realized strategy which refers to the strategy that has been followed at the end when the plan has been sorted. Emergent strategy refers to identifying the unforeseen forces that may come in the way of business which have been resulted as an outcome from execution of strategy. In the present assignment, the industry followed the emergent strategy as well because it could foresee the consequences which could appear as a result of abundant use of resources. It can be said that strategy is something which is about what a person should do and not what he intends to do for the purpose of business development and hence the intended strategy is not applicable in this case.
In the age of growing competition and market demands it has been observed that industries are losing most of its clients. The reasons could be lack of resources, inadequate labors or improper management. The most important reason is that they were busy operating their day to day business s and lost focus on the idea of inventing something new in order to give new shape to the business model (HSGUniStGallen 2013). Innovation is something which involves the implementation of new ideas and such ideas can be taken from successful business models however the idea should not be completely same. It can be noted that innovation involves the process of inventing new ideas which could either be completely new or modification of previously invented ideas. The company that has been addresses in this assignment is the FIAA that stands for The Furnishing Industry Association of Australia which is the largest association for furnishing and involved with cabinetmaking and joinery industries.
Innovation involves the application of new ideas and generating such ideas into successful implementation of products. The innovation could include any product or process whichever is necessary for the purpose of business model. The recent age is an age of technology and with the change in customer needs and demands the industries needs to develop new ideas for their business models in order to attract new range of customers globally. It has to be noted that before any innovative idea is put into operation it is necessary that the idea or the structure should be tested by professionals before official confrmation.
It is to be noted that for successful implementation of business innovation the four steps are to be followed- initiation, ideation, integration and implementation. The process of initiation includes the early stage which marks the beginning of a new idea and during this stage business developers initiate with the same. In the process of ideation an idea must be developed considering business models structure and create a new business model with the help of the structure formed. In the process of integration the process the consistency of the business model has to be checked in detail and this process helps to keep pace to a new approach (Borkovskaya 2014). In the process of implementation, the final plan has to be put into work but it is to be kept n mind that before the business model is implemented it is necessary that the model needs to be tested.
The process of innovation can be described with the help of a figure.
Figure 1: Stages of Innovation.
Source: (Created by the Author).
It is to be kept in mind that the assumptions of the creation of business models should not be based on the knowledge collected from qualitative and quantitative data; the other factors related to innovation should not be ignored (Wirtz et al. 2016). It is to be noted that for successful implementation of business model few things are to be considered like- only one business model is to be implemented at a time, the new business model should be clearly communicated and even the changes should be clearly specified. It is to be noted that innovation requires a lot of time because mostly the time is consumed in its formulation and it is only after successful completion of the process one should proceed with the process of implementation and finally confirm it.
It has been noted that for the successful innovation of business model structure the industry should be aware of its target customers. The Furnishing Industry Association of Australia (FIAA) has maintained a great customer base from the very beginning and attracted customers both locally and internationally. In order to meet the requirements of such target customers it is required that the industry focuses on the basic needs of the customers and concentrate on the unique value and design that it had been providing to the customers for a long time (Borkovskaya 2014). It has been noted that the business model developers did not contribute much to the innovation of the value proposition and revenue generation of such industry and it has been notes that out of four dimensions only two of the above dimensions can be innovated. The Furnishing Industry Association of Australia has established iconic design by developing the new Scandinavian style and thus added a new change to its age old unique design. In order to meet the new market demands new manufacturing processes have been provided to that the members can meet the growing demand and competition.
It can be said that while conducting any new business model it is necessary that innovation is the key factor and its role is to defeat the factors which depend on the past ideas. The idea of innovation evolved in order to meet the competition of today’s economy. It is to be noted that the concept of innovation is not depended on new technologies or about excessive research and development and creating new ideas in the process. It can be added that innovation is all about gaining knowledge and learning from others and at the same time reinventing new business models which does not require the assistance of new technology. Innovation should be created with the help of structured form involving the process of initiation, ideation, integration and implementation.
Conclusion:
The company has been successful in its field for its unique style of furnishing and design for a long time for which it gained worldwide recognition. The company has been successful in promoting employment opportunities among different sections of the society and contributed enormously to the Australian job culture. The company in spite of being successful can deal with failures if certain areas are overlooked. It has been observed that some companies ignore the failures that can be associated with them and are too busy dealing with their success. The intellectual property is one of the most important assets of a company which needs to be protected. It has to be noted that any business no matter how big or small should protect its brand, creation and design otherwise violation intellectual property rights leads to serious consequences.
References
Borkovskaya, V.G., 2014. The concept of innovation for sustainable development in the construction business and education. In Applied Mechanics and Materials (Vol. 475, pp. 1703-1706). Trans Tech Publications.Bailey, M., 2014. Retailing and the home in 1960s Sydney. History Australia, 11(1), pp.59-81.
Camillo, A.A., 2015. Strategic management and crisis communication interdependence in the global context: a preliminary investigation. Emerging economy studies, 1(1), pp.37-49.
HSGUniStGallen (2013). Business Model Innovation. Available at: https://www.youtube.com/watch?v=B4ZSGQW0UMI [Accessed 25 Nov. 2017].
Kryscynski, D. (2015). What is Strategy?. Available at: https://www.youtube.com/watch?v=TD7WSLeQtVw [Accessed 21 Nov. 2017].
Wirtz, B.W., Pistoia, A., Ullrich, S. and Göttel, V., 2016. Business models: Origin, development and future research perspectives. Long Range Planning, 49(1), pp.36-54.
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