1.

Introduction

Company background

LORENZO is a branded lifestyle furniture manufacturer and retailer. Lorenzo’s reach goes
beyond the shores of Singapore. LORENZO’s head office is located in Kaki Bukit Place, Eunos
Techpark Singapore. At the same time, they set up many branches in Malaysia, Taiwan and
China.

They sells most of its products under the LORENZO brand name grouped under two main
collections , that is Dante for classic leather sofas and Enzo for a wood-based collection of oak,
walnut and birch wood furniture. The Enzo series of products includes furniture for the
bedroom, living room, and dining room. Reputed for contemporary style, Lorenzo’s products
are renowned for their luxurious comfort, fine workmanship and exquisite quality.

LORENZO strengthen its presence in high-performing regional markets and expand into
emergent markets such as Thailand, Indonesia, India and others. The products are also exported
to more than 50 countries. Lorenzo’s products provide comfort and style to thousands of homes
around the world, including the cities of Paris, Casablanca, New Delhi, Shanghai, Jakarta,
Sydney and New York.

Their manufacturing facilities and assembly plants in China and Malaysia make up over 57,000
square meters. Lorenzo’s Taiwan subsidiary opened a new store in Kaohsiung. To date, there
are 13 stores in Taiwan, 19 in Malaysia, 6 in Singapore, and 3 in Shanghai.

As an integrated lifestyle furniture group, LORENZO is involved in the entire process of

making and selling of its products, from design to manufacture and assembly, to distribution
through wholesale and retail channels.
2. Planning and Strategic

2.1 Basic strategic used to response to uncertainty

LORENZO is a prospector in responding to uncertainty. A prospector is focus on

developing new markets or services and in seeking out new markets rather than waiting for
things to happen. LORENZO has produced many type of furniture with different design like
sofa, dining table, side table, beds and dressing tables. The main product that LORENZO
produce is sofa, it has different series and pattern, for example, Enzo series, Dante series, and
Nature Enclave series. The LORENZO Group’s good reputation has been achieved through
many years of excellent service and integrity in its business operations. To carry on its
reputation, all marketing, advertising and sales activities are described their offerings and
services.

In their attempt to secure this stable market, LORENZO Company always advertising
and other promotional costs low of their product to attract more people to buy their product. In
Singapore, LORENZO is a major participant in the annual Singapore sales event, the Great
Singapore Sale. LORENZO takes pride in providing savings promotions and often see great
success from them. Its most successful campaign to date has been an “$888 Cash Back”
promotion.

LORENZO maintains its relationship with its customers and hold them through the
programme “LORENZO Friends”. Aside from purchase rebates, members also enjoy special
member product offers and discounts with other partner merchants. Other this, they offer a
limited range of furniture, and better quality furniture or customer service. Its goals tend to be
efficiency oriented rather than effectiveness oriented.

As a largely business-to-consumer brand, LORENZO markets itself actively through

the mainstream media in high frequency. LORENZO is a large media buyer and places frequent
press advertisements on Singapore newspaper such as The Straits Times, The Sunday and
Times. Other than this, media buys on television channels such as Singapore’s Channel 8 and
Suria, are done during festive time. Below the line marketing methods such as direct mailers
are also adopted. To encourage people to purchase, the company organize promotional events
for new showroom openings, anniversary celebrations and new product launches.
2.2 Mission and Vision

Establish mission and vision

OUR VISION
To be the leading lifestyle furniture provider enhancing living concepts
for every home.

OUR MISSION
To provide our customers with comfort
in style through constant innovation
and product development.

2.3 SWOT Analysis

2.3.1 Strengths:

Strengths are the skills and capabilities that give the organization special competencies and
competitive advantages in executing strategies in pursuit of its mission.

Competitive Cost of Product

As an integrated manufacturer of furniture, LORENZO group have better control over the cost
of products and a strong design team comprising personnel from different culture backgrounds,
which deliver a wide range of products to aim on different consumer groups. Leveraging on
relatively lower cost manufacturing base, LORENZO are able to compete in the highly
competitive export market as well as with the manufacturers from Asia-Pacific and Europe.

Established Brand Name

Today the Lorenzo brand is known internationally, and has been recognised by a string of
awards including the Singapore Business Superbrands 2010, the Asian Furniture Leadership
Award 2009, the Brand Laureate and the Singapore Promising Brand Award, which it won for
three consecutive years: 2003, 2004 and 2005. In all its markets except the PRC, which it only
entered retail-wise in 2007, Lorenzo is an established and highly recognised furniture brand,
and in the PRC, too, its name is gaining recognition.
Extensive Retail Sales and Distribution Network

LORENZO GROUP has an extensive retail sales and distribution network covering Singapore,
Malaysia and Taiwan, with LRS stores operating in the PRC, Malaysia, Myanmar, Brunei and
Vietnam. LORENZO has also established an extensive overseas distribution network through
regional distributors, wholesalers and chain stores to sell products. Not only that, LORENZO
intend to enlarge existing markets by setting up sales network in various cities in PRC such as
Beijing, Chengdu, Dalian and many other countries.

2.3.2 Weakness:

Weakness is the drawbacks that hinder an organization in executing strategies in pursuit of its
mission.

Competitive market

A competitive market is one in which a large numbers of producers compete with each other
to satisfy the wants and needs of a large number of consumers. In a competitive market there
is no single producer, or group of producers, and no single consumer, or group of consumers,
can dictate how the market operates. Nor can they individually determine the price of goods
and services, and how much will be exchanged. Competitive markets will form under certain
conditions. There are many competitors other than LORENZO company that sell the same
furniture. So the profit for this company will be affected. That’s why this is a weakness.

Cost structure

Cost structure is the types and relative proportions of fixed and variable costs that a business
incurs. The concept can be defined in smaller units, such as by product, service, product line,
customer, division, or geographic region. Cost structure is used as a tool to determine prices,
to highlight areas in which costs might potentially be reduced or at least subjected to better
control. This is a type of weakness for LORENZO company because if you determine a wrong
price, it will affect your customer buying power.

2.3.3 Opportunity

Opportunities are the environmental factors that the organization may exploit for competitive
advantage.
New products and services

New products and services are the lifeblood of all businesses. Investing in their development
isn't an optional extra, it is crucial to business growth and profitability. But embarking on the
development process is risky. It needs considerable planning and organization. This guide will
outline the key stages in the lifecycle of products and services so you know when the time is
right for your business to start the development process. Because of the innovativeness and
creativeness of LORENZO company, it creates the opportunity to become a better company
that let the world know about it.

Having a quality product

Having a quality product is a great opportunity for the company to absorb institutional customer
base. Example of LORENZO company is the company made many high quality product such
as table, chair, sofa and so on. This will benefit the company because this will make the
customer loyal to your product and the customer not easy to switch to another new product
because they did not know the new product has good quality or not.

2.3.4 Threats

Threats are the environmental factors that hinder an organization in achieving a competitive
advantage.

Large numbers of players

This is a threats for the company because due to large numbers of players, market is getting
saturated day by day. This will make LORENZO company earn lesser profit than another
company. Market saturation happens when you have way too much of a product and not enough
demand for that product.

Difficult to satisfy the customers

Difficult to satisfy the customers is also a threats because if you didn’t satisfy them, it may be
results in loss of market. This will definitely be a loss to the company, that’s why LORENZO
company should think some ways to overcome this problem. For example, do some promotion
or try to create the website for their company and put their product on the website.
Increase in the price of raw material

One of the threats for LORENZO company is the price of raw material. If the price increase,
the cost for the product will also increase because they need raw material to produce the product.
Then they will pay a lot to produce good quality product.

2.4 Grand strategy

Grand strategy, also called high strategy, comprises the "purposeful employment of all
instruments of power available to a safety community". Growth, stability and defensive
strategy are the three common grand strategies.

LORENZO company is using growth strategy. Growth strategy is involves expansion in market
share, sales revenue, number of customers, number of employee and so on. Lorenzo, with a
history dating back to 1983, is a branded lifestyle furniture retailer. Committed to upholding
its traditional heritage of quality and excellence, the Company and its subsidiaries (the "Group")
controls all aspects of its business through vertical integration, which includes the design,
manufacture, assembly and distribution of its conceptualized furniture. The Group builds on
its standing as an emerging consumer brand by establishing brand presence through wholly-
owned stores and Licensed Retailing System ("LRS") stores across the world.

Lorenzo sells most of its products under the Lorenzo brand name which are grouped
under two main collections - Dante for classic leather sofas and Enzo for wood-based products.
The Enzo series of products includes furniture for the living room, dining room and bedroom.

Attesting to its promise of excellence, Lorenzo also acts as an Original Design

Manufacturer to design and manufacture furniture under customers' brand, as well as an
Original Equipment Manufacturer to manufacture based on customers' designs. Evolving to
meet the varied needs of today's consumers, Lorenzo acquired Builders Shop Pte Ltd ("Builders
Shop"), a leading importer, retailer, distributor, supplier and installer of building materials at
the end of 2011. Builders Shop specializes in the supply and installation of exquisite granite,
marble, lime stones, travertine, quartz, onyx and tiles to both individual retail customers and
large scale project and property developments.
 Together, the Group delivers the ultimate living experience by offering exquisite, high
quality building materials to accompany the well-designed furniture, creating and enhancing
living concepts for every home.

LORENZO company also has a system called LORENZO SHIPPING

CORPORATION. Lorenzo Shipping Corporation (LSC) offers containerized door-to-door
service to its customers around the country. It is one of the leading players in the containerized
shipping industry.

Their customers come to them because of they wide reach, high-capacity ships,
frequency, and friendly yes-we-can service. They listen to customers needs so that they can
help provide solutions to their customers transport needs, be it port-to-port, door-to-door, FCL,
LCL, dry containers, reefers or livestock carriage. Their fleet of vessels regularly call the ports
of Manila, Cebu, Tagoloan, Davao, General Santos, Iloilo, Bacolod, Dumaguete, Zamboanga
and Cotabato. More ports are being planned in the future.

2.5 Competitive strategies used by the company

Competitive strategies

From Michael Porter, there are four competitive strategies which use by the company in the
market. There are cost-leadership strategy, differentiation strategy, cost focus strategy and also
focuses- differentiation.

Competitive strategy used by Lorenzo Company is placed under differentiation and cost
leaderships. Lorenzo use those strategies to compete with others competitors like Olympia,
Ashley and so on.

Differentiation strategy

Differentiation strategy involves either one or more criteria used by the buyers in a market. The
company applied this strategy will position the business uniquely to meet those criteria. The
products produced by the company will have a unique value compared to other products.
They need a wide market for their certain products such as Leather Sofa, Dining Table, Dining
Chair, and also Beds in China, Malaysia and so on. However, price for the products are
relatively high. The reason for using differentiation is because the cost of production for the
products are relatively high due to the improvement of the safety and quality of the furniture.
It is to ensure that furniture can compete with other branded furniture so that it can cope with
the customers’ requirements. Furthermore, certain furniture like L-Shapes Sofas not only suits
the customers with larger members in their families, but also provides much convenience and
comfortable for them as well.

Cost Leaderships strategy

Cost leadership is a concept developed by Michael Porter, used in business strategy. It

describes a way to establish the competitive advantage. Cost leadership, in basic
words, means the lowest cost of operation in the industry.

These furniture include Leather Sofas, Recliners and so on which are sold at low prices to
ensure a wide market in other countries. Reason of using cost leaderships is because the cost
of production of each furniture is lower and the specifications of these furniture are just medium.
It is to produce the furniture with lower prices which can afford to be bought by the customers
with low salaries. For examples in Malaysia, normal leather sofa (2+3 seat) is sold at RM 4992
to Malaysians compare with another furniture it is more cheap and valuable. By using cost-
leadership strategy, Lorenzo has successfully earn revenue on 30 of June 2015 which is
S$13,359 in Malaysia. S$5,242 in Singapore. S$6,309 in Taiwan. S$574 in China. S$1,741 in
other countries.

3.0 Recommendation

3.1 Utilizing the identified strengths and opportunities

3.1.1 Utilizing the identified strengths:

Established Brand Name

"LORENZO" brand name is well-recognised in the furniture industry and in the markets. . In
order to utilize it well, LORENZ0 company can make efforts in promoting and advertising
their products through many ways, both locally and globally. For example, make advertisement,
promotion or anniversary sale.

Competitive Cost of Product

As an integrated manufacturer of furniture, LORENZO group are able to produce a lower cost
and a high quality of furniture. In many years in this industry, LORENZO gains more
experience in produce their own product and they can use their capital very efficient. Besides,
they also get well known about customer needs. LORENZO can fully utilize their strength to
produce more new design and good quality of furniture.

Extensive Retail Sales and Distribution Network

LORENZO group has an extensive retail sales and distribution network covering a few
countries in Asia. LORENZO has also established an extensive overseas distribution network
through regional distributors, wholesalers and chain stores to sell products. Not only that,
LORENZO intend to enlarge existing markets by setting up sales network in various cities in
China and many other countries. With these chain stores and factory in overseas, it had save a
lot of cost in export to another countries. LORENZO may can set up factory in other country
to produce their furniture in that own country. Because of the geographic problem, some
country may have some special material, LORENZO can use this matter to produce a special
and unique product.

3.1.2 Utilizing the identified opportunities:

New products and services

New products and services are the lifeblood of all businesses. Investing in their development
isn't an optional extra, it is crucial to business growth and profitability. But embarking on the
development process is risky. It needs considerable planning and organization. LORENZO
company actually can ask about the feedback of the design and the price of product from their
customer to know the demand in the market. To get more customer feedback, LORENZO can
give some offer in the product to attract customer to give feedback. Because of the
innovativeness and creativeness of LORENZO company, it creates the opportunity to become
a better company that let the world know about it.
Having a better quality product

A good quality product is a great opportunity for the company to absorb institutional customer
base. LORENZO company made many high quality products such as table, chair, and sofa and
so on. LORENZO company might continue to keep it up and do more research on the materials
of produce their furniture. Maybe they can try to produce product with better quality of leather
in sofa. People nowadays are busy on working and no time to clean their sofa. So, LORENZO
can produce a easy clean leather sofa and this will benefit the company because it will make
the customer like to your product and the customer not easy to switch to another new product
because they did not know the new product has good quality or not.

3.2 Overcome the identified weakness and threats

3.2.1 Overcome the identified weakness

Competitive market

A competitive market is one in which a large numbers of producers compete with each other
to satisfy the wants and needs of a large number of consumers. There are many competitors
other than LORENZO company that sell the same furniture. The profit for this company will
be affected. In order to solve this weakness, LORENZO may have to do a lot of advertisement
to let more people know about them. The advertisement has to be more creative to let people
remember and interested on it. LORENZO may be able to refer to the Thailand advertisement
as their advertisement is creative enough. Other than this, LORENZO also can merge with
other company such as DREAMLAND to make the strong power in this industry.

Cost structure

Cost structure is the types and relative proportions of fixed and variable costs that a business
incurs. Cost structure is used as a tool to determine prices, to highlight areas in which costs
might potentially be reduced or at least subjected to better control. This is a type of weakness
for LORENZO company because if determine a wrong price, it will affect the customer buying
power. To overcome this weakness, LORENZO can refer to the economic status of the country.
During the recession, LORENZO can produce less and tag the price not so high so people are
able to consume on it.

3.2.2 Overcome the identified threats :-

Large numbers of players

This is a threats for the company because due to large numbers of players, market is getting
saturated day by day. This will make LORENZO company earn lesser profit than another
company. LORENZO had to maintain their good quality in their product in order to make the
customer loyal and trust on your product. As a strong player in this industry, LORENZO must
always updated the design and material of the product to satisfied the demand of customer.

Difficult to satisfy the customers

Difficult to satisfy the customers is also a threats because if you didn’t satisfy them, it may be
results in loss of market and they will switch on to other company. This will definitely be a
loss to the company, that’s why LORENZO company should think some ways to overcome
this problem. For example, do a research and get a sufficient feedback from customers.
LORENZO must always welcome the feedback from customers no matter it is bad or good. It
can help LORENZO to improve in order to chase the markets needs.

Increase in the price of raw material

One of the threats for LORENZO company is the price of raw material. If the price increase,
the cost for the product will also increase because they need raw material to produce the product.
Then they will pay a lot to produce good quality product. To overcome this threats, LORENZO
may develop a good relationship with their supplier to get a cheaper price on raw materials.
LORENZO may choose a few supplier to buy their material because if only focus on one
supplier their bargaining power will be lower.

4. Conclusion

The overall achievement of LORENZO

Lorenzo has received numerous awards and accolades over the years for its quality
workmanship and design. Among them was the Asian Furniture Leadership Award (AFLA) in
2009, as well as prestigious branding award, The BrandLaureate 2006 - 2008 for Best Brand
Consumer, Home Furnishing. Lorenzo was also the proud winner of the Singapore Promising
Brand Award for three consecutive years from 2003 as well as the Enterprise 50 Award in 2005.
From a successful listing on the SGX- SESDAQ (now known as CATALIST) in 2006, Lorenzo
was upgraded to the SGX main board in January 2008. Throughout the years, LORENZO has
been guided by its strong heritage of excellence and values of innovation and durability. As
such, LORENZO has received numerous awards and accolades for its quality workmanship
and design.

In the year 2013, LORENZO (MALAYSIA) achieved brand recognition in its key markets
with the honours to receive the Malaysia Business SuperBrands (2013) award. Besides,
LORENZO also the winner of the International Furniture Leadership Award (IFLA) 2013.
Other than this, LORENZO get awarded at the 28th and 29th Famous Furniture Fair, Dongguan,
PRC during the year 2012 and 2013.

In year 2012, LORENZO achieved Singapore Service Class certification administrated by

SPRING Singapore. LORENZO is the Top 30 Respected Enterprises in the 2012/2013
Successful Entrepreneur Award.

LORENZO awarded the PREMIUM GEM (Furniture and Furnishing) 2011 and the Circle of
Excellence Singapore for year 2011 and 2012. In year 2010, LORENZO achieved brand
recognition in its key markets with the honor to receive the Singapore Business Superbrands
(2010) award. Besides that, the company also awarded the Service GEM (Furniture and
Furnishing/ Electrical and Electronics).

Furthermore, LORENZO clinched 3 awards at the prestigious 28th International Famous

Furniture Fair, China. Lorenzo won a distinguished Gold award for the “Most Creative” under
the Living Room category, Overall Gold award for the Bedroom category and Overall Silver
award for the Living Room category. LORENZO has been awarded the PREMUIM GEM
(Furniture and Furnishing), the Circle of Excellence Singapore 2011 and 2012. Being the Top
30 Respected Enterprise, LORENZO is also proud to be certified with the Singapore Service
Class (S-Class) certification administrated by SPRING Singapore. In 2010, LORENZO
achieved brand recognition in its key markets with the honor to receive the Singapore Business
Superbrands (2010) award. LORENZO is the pioneer in the local market to incorporate the
embellishing of CRYSTALLIZED™ – Swarovski Elements onto our finest upholsteries and
other furniture pieces in 2009. Apart from the above, some of our many accolades are
Singapore Promising Brands – Silver, Golden Bull Award 2005, The Brand Laureate for Best
Brand Consumer, Home Furnishing, Asian Furniture Leadership Award (AFLA) 2009 and a
member of Singapore Mozaic.
In conclusion, LORENZO Company had awarded so many times from the year 1983 until now.
In overall, LORENZO is a successful company in Singapore

5. Reference

www.americanexpress.com

www.infoentrepreneurs.org

www.swotanalysis24.com

http://www.lorenzo-international.com/company.html

http://lorenzo.listedcompany.com/chairman.html

http://lorenzo.listedcompany.com/strengths_info.html

http://lorenzo.listedcompany.com/achievements_info.rev