Term Paper

On
Human Resource Policies & Practices of
Otobi Furniture Ltd
Course No: EIB 506
Course Title: Principles of Management (Sec-A)

Submitted to: Submitted by:

Dr. Khondoker Bazlul Hoque Oliur Rahman Pritom
Professor, ID: 801825040
Dept. of International Business
University of Dhaka.

Date of submission: 10th August, 2018

 Letter of Transmittal

24th November, 2017

Dr. Khondoker Bazlul Hoque

Professor,

Faculty of International Business,

University of Dhaka,

Dhaka, Bangladesh.

Subject: Term paper on Otobi Furniture Limited.

Dear Sir,

It is a matter of pleasure and honor for me to have the opportunity to submit my report as a
part of my academic activities. I have put my maximum effort in this project. I have shown
my uttermost gratitude for the opportunity you gave me to implement my analytical thinking
and interpretation skills that will help me in building my future career with a mind for
thinking about the environment. I anticipate learning some real life lessons. I would be
delighted to furnish you with any details, if required. I, therefore, would like to place this
report to you for your kind consideration.

Yours Sincerely,

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 Acknowledgement

I want to thank Dr. Khondoker Bazlul Hoque, an honorable lecturer of faculty of international
business, for his guidance, supervision & suggestion through out of the study period of my
report. His continuous support and re-enforcement has encouraged me to do the study work
properly. I acknowledge with great appreciation and cooperation for giving his valuable
comments and encouragement at different stages, particularly at the beginning of the study.

I am grateful to those people who are working in this industry who are related in this
business. Because of their provided valuable information and honest replies, I am able
complete the significant part of this report.

Also I would like to thank my parents for the financial support to complete this research
report.

All over & again I extend my heartfelt thanks and respect to Dr. Khondoker Bazlul Hoque,
who always try to make understandable to me the new difficult views and things in an easy
way.

At last I am grateful to almighty Allah, because I have been able to complete the report
within the given time period.

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 Table of Content

Content Page
Executive Summary 05
Introduction 06
Company Profile 10
PESTEL analysis 13
Porter’s five forces model 15
SWOT analysis 17
Corporate and Competitive strategy 20
Strategy Formulation 22
Findings and Analysis 24
Recommendation 25
Conclusion 25
Reference 26

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EXECUTIVE SUMMARY

OTOBI is the leading and prosperous furniture company in Bangladesh which was
established in 1975 by painter & sculptor Mr. Nitun Kundu. With creative reinvention
pulsating through the entire organization, OTOBI has set out to revolutionize the entire retail
scenario starting off with Bangladesh. OTOBI is now an inspirational brand in homes and
offices which is explicitly expressed through its products and communication. It controls
about 80% of the country's branded furniture market at present. To accomplish competitive
advantage, OTOBI Furniture Company is successfully applying market synergy by opening
new clothing business OTOBI CLOSET. With its differentiation strategy, it’s providing
unique products, superior product quality, production style, special features, after sale
service, exceptional promotion, a nationwide distribution network, discount offers etc. and
targeting broad target market such as corporate house, hose hold/home and Govt. office etc.
The company maintains its belief of setting its own benchmark and breaking it time and time
again. The main strategic objective of OTOBI is to become Asia’s top three brands by 2020.
It wants the customers to remember “OTOBI” as a memorable experience. OTOBI manages
its most critical resource-Human Resource by unbiased recruitments, job training, counseling
and mentoring, some rewards and motivational factors. OTOBI has stepped forward to
actively respond to the needs of the public on numerous occasions and CSR policies. These
reinforce the brand image and brand loyalty of OTOBI. Over the years, OTOBI has been
awarded numerous accolades. Day by day OTOBI is becoming a legacy in the history of
Bangladeshi furniture market and is expanding over the boundary of Bangladesh.

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INTRODUCTION

OTOBI Furniture is the market leader of furniture markets of Bangladesh. They started their
business in Bangladesh in the year 1975 with the slogan “Trusted across the World”. And
now they crossed the boundary and operating business also in India. They are assuming
themselves as the market leader for last 10 years. Though their price is a bit higher but as
they provide the best quality furniture people are ready to get that with any cost. Not only that
they have the biggest brand image in our country. They have already earned the first place in
the office furniture. That is why now a day corporate office means, furniture from Otobi.
Otobi furniture a part of Otobi limited which is a combination of four different types of
business. They are as follows

Otobi Furniture: Combination of office and furniture

Home appliances: Washing Machine, air conditioner
Carpet: under: Apollo Limited
Decorative Light: Also under Apollo Limited

Otobi furniture has the biggest collection of furniture like world class chair, computer
furniture, home furniture, table, swivel chair and file cabinet and plastic furniture. Otobi
furniture was given the award of enterprise of the year 2001. Beside their corporate office in
Dilkhusha, Dhaka, they have 8 sales and display center in Dhaka and Chittagong city and
around 100 dealers in the whole country. They have about 16 outlets outside the country.

1.1 Origin of the report

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Dhaka University is an institute that promotes eastern culture & values and meaningfully
blends eastern & western thought and innovation. To do this it provides postgraduate degree
on different subjects. Principle of Management (EIB506) is one of the core courses of EMBA
program. Precisely it teaches how business organizations formulate and implement their
strategies. This report was assigned to us by our course instructor, Prof. Bazlul Hoque, as
partial fulfillment of the Principle of Management course objective. It was instructed to
follow the rules of long formal business report. The report is to be submitted by
24thNovember 2017.

1.2 Objective of the report

The general objective of this report is to display our finding on history, PESTEL analysis,
Porter’s five forces model, SWOT analysis, corporate and competitive strategy, critical
business process, cost efficiency model, product/process/service design, strategy clock,
strategy formulation and implementation of old Otobi Ltd. in a proper business report format.
It is vital for any business graduate because in their careers, they have to submit report
formatted as taught.

The main objective of this report is to spread the knowledge about the Otobi furniture
towards the people. This report will help the people to get some initial knowledge about
Otobi furniture. People can get information about the company overview, its mission, vision
goals, its strength, weakness, opportunities, threats, PESTEL analysis, Porter’s model,
strategy clock of Otobi furniture from this report.

This report will also let us know the possible recommendation for Otobi furniture.

1.3 Scope of the report

In this report, we have worked about the Otobi furniture. Here we have tried to notify history,
PESTEL analysis, Porter’s five forces model, SWOT analysis, corporate and competitive
strategy, critical business process, cost efficiency model, product/process/service design,
strategy clock, strategy formulation and implementation of Otobi. Basically, in this report we
don’t represent all about the Otobi rather it contains some basic ideas for better
understandings of Otobi Ltd. In this Report we have tried to show different analyzed data,
pictures and graph that will help anyone to have a little knowledge about Otobi. As it is

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designed in a plain and clear way, it will be helpful for the people and students who do not
have vast knowledge about the subject matter. The structure of the report will be helpful for
the beginner researcher. As a reference it is reliable and easy to interpret.

1.4 Methodology of the report

The choice of an appropriate methodology is important for any research study. Authentic
research findings need sound scientific methodology. In the present study the following
methodology has been adapted:

1.4.1 Design of the study

A schematic diagram is presented below indicating the steps followed in carrying out the
present study.

Figure 1.1: Design of the study

Executive Summary

Introduction

History of Otobi

PESTEL analysis

Porter’s five forces model

SWOT analysis

Corporate and Competitive strategy

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 ↓

Critical Business Processes

Cost Efficiency Model

Product/Process/Service design

Strategy Clock

Strategy Formulation

Conclusion

1.4.2 Source of Information: Non Documentary and secondary sources

1.4.2.1 Non Documentary sources

These include both formal and non-formal sources. Formal sources cover discussions with
experts and eminent scholars. The non-formal sources include conversation with
professionals and informal discussion with corporate people.

1.4.2.2 Secondary Sources

We have collected information from secondary source are websites, books and some daily
newspaper.

1.5 Limitations and delimitations

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Even though the report finished on time, it does not mean that we did not face any problem in
doing this report. The most difficult problem that we found during doing this report was
difficult to get information from corporate people and internet. Maximum corporate people
didn’t want to talk about details of Otobi. It may because of their secrecy. Other problem that
we felt the time to do this report was so limited we believed that we could get more
information from the professionals.
Despite these limitations the results of the present study would show some significant,
directions and suggestions towards the development of the company. It is expected that the
findings of the study would help the planners and policy makers.

2.0 COMPANY PROFILE

Otobi Furniture stared its journey in the year 1975. They have a huge past records to tell.
They are the market leader in the furniture industry for the whole last decade. We know that
otobi furniture is a part of Otobi limited which was the creator of SAARC Foara of
Karwanbazar, Sculpture of Rajshahi University, and Sampanof Chittagong Airport. All this
are the biggest symbolic assets of our country. In fact the architect of these sculptures was
Mr. Nitun Kundu who was the father of Mr. Onimesh Kundu, the Managing Director of
Otobi Limited.

2.1 Historical Background

In today’s International Business to market any product in the international market is very
difficult because of different cultural and demographic condition. It is also more difficult for
some of the company to market its product internationally because of competition. As I have
seen for the past few months of furniture Business in Bangladesh by various local and
multinational companies it will be a great opportunity for me to study a local multinational
company in this regard. In Bangladesh Otobi is one of the leading companies in furniture
manufacturer and selling I would like to study this company more closely and will try to
understand its marketing strategy. I have tried to integrate their Experiential Retail strategy in
Bangladesh. So basically this report will deal with the Experiential Retail and Experiential
Marketing strategies taken by them around the globe and also in our country.

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2.1.1 Mission

 Otobi is a manufacturing company which manufactures and supplies the most

qualitative furniture with reasonable pricing across Bangladesh.
 The company constantly follows the latest trends in the furniture industry and
introduces to the Bangladesh market new, interesting and competitively advanced
products.
 The company is trying to guarantee a wide offer of furniture products in different
materials, dimensions and colors for almost every room of your home.
 It offers a variety of product line to attract more customers.
 It fulfills its social duties by fitting in the local environment as a sponsor and donator
and offers to all employees a relaxed working environment.

2.1.2 Vision
The vision of ‘Otobi’ is to become the most leading furniture manufacturing company in
Bangladesh”. By following our vision, our company will expand its sale net across
Bangladesh. At the same time it will also focus on the foreign markets. The management will
be based on a long term partnership with the suppliers. The company’s activities will aim
towards the offer of quality products and efficiencies, and strive to achieve the contentment
of the business partners, final consumers and employees.

2.1.3 Goals
Otobi is committed to provide excellent service and to exceed the expectations of its
customers. It wants the customers to remember “Otobi” as a memorable experience.
Otobi aims to fulfill the objectives of the Company's growth and to meet the
expectations of all its employees.

2.2 Strategic Position

The current strategic position of the company is analyzed in terms of internal and external
factors.
2.3 Internal Factors
Internal factors identify the quantity and quality of the company’s resources and capabilities
and ways of building unique skills and company specific or distinctive competencies.

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2.3.1 The Strategic Capability
The strategic capability is defined as the capability of an enterprise to successfully undertake
action that is intended to affect its long term growth and development.

2.3.2 Resources of Otobi

Company’s resources can be grouped into two categories

2.3.2.1 Physical Resources

The Company has a great physical resource. They are one of the largest furniture companies
of Bangladesh. As a result they had to maintain more resources from other company.

2.3.2.2 Intellectual resource

The intellectual resource includes the brand image, patents, customer database and is a major
asset in a knowledge based economy. The brand image of Lifestyle Furniture has been
consistently at a impressive average value which is above the norm value. This is mainly due
to the high quality products provided by the Otobi furniture. Also the client database and the
innovative products provided by Otobi products are unique resource to the company.

2.3.3 Core Competences

Core competences represent the collective learning in the organization, especially how to co-
ordinate diverse production skills and integrate multiple streams of technologies. The
organizations must consider themselves as portfolio of core competencies as they are focused
on growing the opportunity of the organization.

From the Otobi Furniture perspective, the innovative products, well trained staff, market
share can considered. The strategic idea to focus on core competences is indispensably
connected to the concentration of one’s own strengths against competitors' weaknesses.

2.4 External Factors Affecting Company Strategy

There are a number of different external factors that take place in the macro environment that
affect a company’s business. Tax changes, new laws, trade barriers, demographic change and
government policy changes are all examples of macro change.

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3.0 PESTEL ANALYSIS OF OTOBI LTD

If we analyze the environment of Bangladesh by the PESTEL analysis for OTOBI LTD we
will find a scenario like that
3.1 Political Environment
As we know Bangladesh is a developing country and it’s a democratic country. But we know
that from past the political situation of Bangladesh is not stable. Whenever the election is
coming to the door the political unrest is raised by a huge amount. So for doing business in
political unrest is very harmful. Otobi is also about to face that problem if they want to extend
their business in recent years. Recent political situation is very bad for business. A lot of
strikes are hampering the export and import. For this unrest a lot of company is losing their
orders. Besides this whenever a new government is came they just rise the tax by changing
the policy. But nevertheless the current political policy passed by the government ensures
loan facilities and investment opportunities to the business personals this will give lifestyle
furniture a chance to bounce back.

3.2 Economic Environment

Economic conditions affect how easy or how difficult it is to be successful and profitable at
any time because they affect both capital availability and cost, and demand for the product.
The rise in the inflation rates has inversely affected the price of goods (UK inflation rate rises
to 4% in January, 2011). This sudden increase forced the company to lower the price of
products which in turn reduced the profitability margin of the company.
Bangladesh is a developing country. It’s means that the economy of Bangladesh is growing
day by day. The economy and the buying capability of the people are also increasing. Now a
day the GDP of Bangladesh is increasing and also the disposable income is also increasing
that makes the ability of people to consume more. So for OTOBI it's an opportunity to do
business and expend their business. It’s an ideal market. Besides this because of globalization
export and import is also increasing in the Bangladesh. In Bangladesh the labor cost is very
low because it's an overpopulated country and labor is cheap here. So OTOBI can easily

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produce more products in cheap price and can easily expand market with limited risk. It’s a
good opportunity for them to do business.

3.3 Social Environment

The socio- cultural environment encapsulates demand and tastes which vary with fashion,
disposable income, and general changes, can again provide both opportunities and threats for
particular companies. The furniture industries throughout the country faced a transportation
threat in the 4th stage of the game as there was an employee’s strike in the transportation
sector. This resulted in the delay in deliver of the ordered furniture. But nevertheless, the
sudden strikes didn’t have a strong impact on the Lifestyle Furniture as the company already
had excess of inventory in hand. This helped the company in making additional sales in that
particular period and also overcome the loss that it incurred due to inflation. The overall
market share of the company has always been high throughout the game. Now a day the
social bonding is changing in Bangladesh. Big families are breaking into pieces and
everybody is making a small family. The life style is developing day by day. Each and every
family needs furniture and now people are very conscious about their furniture. They want
stylish and effective furniture. The growth of population is very high here and the number of
family is increasing. So the demand of good furniture is high now. So Otobi can grab all the
opportunity from this big market. It’s a good profitable market.

3.4 Technological Environment

The advancement in technology such as the Digital Marketing has enabled the company to
reaching out to the customer in a more rapid manner.
OTOBI is using new technology for their production which is very effective to produce a
huge amount of product in time and it also helps Otobi to full fill the demand of their
customer by providing them their desired product. They bought many modern machines for
their factory from abroad which is very expensive.

3.5 Legal Environment

OTOBI has always been able to keep up the laws and legal requirements of Bangladesh and
the Anti-Copy in Design- an organization that ensures the intellectual property right.

3.6 Environmental Environment

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According to Pearson and Robinson, there are five principle environmental factors that affect
a company’s business. They are the competitors; creditors, suppliers, customers and the labor
market (Pearson & Robinson, Strategic Management, 2002).

Otobi believes in green world, so they are producing environment friendly product which
people can use without any hesitation. So by this they are getting competitive advantage. The
competitive advantage that OTOBI maintains over the other companies is the ability to
deliver high quality products to our customers at low prices. This helps our company in
retaining the customers and suppliers.

4.0 PORTER’S FIVE FORCES MODEL

According to Porter, the likelihood of firms making profit in a given industry depends on the
five factors

Figure 4.1Porter’s Five Forces

Five Forces model is a generic framework that deconstructs industry structure into five
underlying competitive forces or variables. These five underlying forces are competitive
rivalry among existing firms, bargaining power of suppliers, bargaining power of customers,
the threat of new entrants into the industry, and the threat of substitute products and services.

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4.1 Rivalry among existing firms
Rivalry among existing firms is intense in the global market of discount furniture and the
major players in the industry include Partex Furniture’s, Navana Furniture’s, Brothers
Furniture, Akhtar Furniture’s, Hatil, High Fashion Gallery and other local manufacturers.
However, currently Otobi is the undisputed market leader in the industry of discounted
furniture in the Bangladeshi market.

4.2 The threat of new entrants

The threat of new entrants into the industry is low, and the chances of emergence of new
competition for Otobi is insubstantial as the current market is saturated and significant
amount of financial investments and expertise are required to become a discounted furniture
retailer in a global scale.

4.3 The bargaining power of customers

The bargaining power of customers is strong, as the competition is intense and the customers
have a wide choice of alternative options offered by other branded furniture retailers, as well
as, local furniture producers.

4.4 Threat of substitute products and services

Threat of substitute products and services is low as there are no too many products and
services available that can substitute the demand for furniture, decors, home appliances and a
range of other products offered by Otobi.

4.5 Suppliers bargaining power

Suppliers bargaining power is not very high as there are numerous factories around the
country with the capabilities and resources to form partnership with Otobi. At the same time,
Otobi pursues the strategy of forming strategic long-term relationships with its suppliers.

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5.0 THE SWOT ANALYSIS OF OTOBI FURNITURE

Strengths Weaknesses
 High quality products and  The price is high for most of
services the customers
 Strong national brand  Not much stores in
image Bangladesh
Internal Factor
 Market leader in  Managing the Inventory
Bangladesh  Market share has reduced
 Fully mechanized system
 Awards

Opportunities Threats
 Global Expansion  More competitors are
 Otobi can increase its coming day by day
product line  Political situation of the
External factor
 Office interior influences the country
people working there  Low priced companies are a
 Otobi can introduce its big threat
stores in other districts of  Chinese furniture is
Bangladesh becoming

Positive Negative

5.1Strengths of Otobi Furniture

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5.1.1 High quality products and services: The quality of Otobi is much better than its
competitors as they use “Wood-tex” for their products whereas other manufacturers
normally use “Jute-tex”. Nowadays they are producing large quantity wooden product
with a large number of designs. They are the only one in the country who is importing
Cain furniture. However, the secret behind the fantastic quality of Otobi is they have a
separate Quality control department where more than 100 workers are working for
maintain the quality of the product.
5.1.2 Strong national brand image: Almost all the people of Bangladesh believe that

Otobi‟s furniture is fashionable and long lasting. The customers also buy their

products because they provide warranty and the best after sales service. Though all
the furniture companies provide warranty but Otobi’s policy is very much committed
in providing warranties unlike other companies. Basically, they care about the
customers more and have successfully built a positive brand image in the customers
mind.
5.1.3 Market leader in Bangladesh: The brand equity of Otobi furniture is very good. They
are the market leader for the last couple of years in Bangladesh. They are very much
popular for making the best office furniture. This is why nowadays corporate office
means furniture from Otobi.
5.1.4 Fully mechanized system: Otobi uses a fully mechanized system, modern technology
for manufacturing services of contemporary designs. The raw materials are imported
from Malaysia.
5.1.5 Awards: Otobi has won a lot of awards for being the best furniture company unlike
other companies.

5.2 Weakness of Otobi Furniture

5.2.1 The price is high for most of the customers: Otobi products are highly priced. It
makes it difficult for the middle class families of Bangladesh to afford it.
5.2.2 Not much stores in Bangladesh: Otobi has showrooms confined to Dhaka and
Chittagong mostly. This makes it difficult to serve the customers in other parts of the
country.
5.2.3 Managing the Inventory: During specials seasons or occasions like Eid and Puja.
They get a lot of offers from customers. Their product demand increases. But at times

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 showrooms and dealers are unable to keep up with the heavy orders placed by the
customers. Hence, this creates a lot of pressure regarding the management of
inventory within the company.
5.2.4 Market share has reduced a bit: Since, Otobi is the pioneer of branded furniture
industry. It had a market share of 100%. But as time passed by the number of
competitors for Otobi increased in the market and which eventually lead to a decrease
in their market share. Therefore, Otobi was not able to handle the competitor’s
pressure effectively.

5.3 Opportunities of Otobi Furniture

5.3.1 Otobi can be an international brand by exporting its products in more countries
(Global Expansion): Otobi should start thinking of operating in other countries as
well. It can start by expanding its international market to the SAARC nations starting
with the neighboring countries like Sri Lanka, Nepal and Pakistan.
5.3.2 Otobi can increase its product line: Based on the high demand, Otobi has started
producing furniture made of wrought iron. It can increase its market share in this
sector by further increase in production because of the huge demand.
5.3.3 Office interior influences the people working there: These days‟ people are
becoming more interested in the office structure. Since, office environment has a
strong relation with the office design and the people working there. If the office is
designed nicely the employees feel good to work in this kind of environment. And
when it comes to Otobi, the interior along with the environment is fantastic. However,
these increased consciousnesses for decoration have aroused people interest in stylish
furniture designs.
5.3.4 Otobi can introduce its stores in other districts of Bangladesh: Due to the increased
demand of furniture by the Companies all around the country. Otobi can open outlets
in other divisional districts like Sylhet, Khulna and Rajshahi. In this way, they will be
able to make profit as well.

5.4 Threats of Otobi Furniture

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5.4.1 More competitors are coming day by day: Day by day the competition for Otobi is
increasing. Their competitors are companies like- Partex, Navana furniture etc. These
companies can threaten the market share of Otobi immensely.
5.4.2 Political situation of the country: The political situation of the country can create
negative image about the company and can cause serious problems in its transaction
with foreign countries. Even the political situation can jeopardize the future growth of
the company.
5.4.3 Low priced companies are a big threat: The low priced companies‟ offers products
in a cheaper and reasonable price than Otobi to the middle class society. Since, we
know that Bangladesh is filled with middle class people more. Otobi should come up
with a reasonable product price range for the majority of the middle class people in
Bangladesh. Otherwise, low priced companies might take over Otobi.
5.4.4 Chinese furniture is becoming popular for their price and designs: These days
Chinese furniture is becoming more popular. They come up with the same design but
in a cheaper price. This can be big threat for Otobi.

6.0 CORPORATE & COMPETITIVE STRATEGY FOR OTOBI

Strategy is the link between what the organization wants to achieve- its objectives- and the
policies adopted to guide its activities. It is defined as the match an organization makes
between its own resources and the threats or risks and opportunities created by the external
environment in which it operates.
Strategies exist at a number of levels in an organization namely corporate level, business
level and functional level.

6.1 Corporate Level Strategy

Corporate-level strategies address the entire strategic scope of the enterprise. This is the "big
picture" view of the organization and includes deciding in which product or service markets
to compete and in which geographic regions to operate.
Level Of strategy Definition Example

Corporate Strategy Market definition Diversification into new

product or geographic markets

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Business strategy Market navigation Attempts to secure competitive
advantage in existing product
or geographic markets

Functional strategy Support of corporate strategy Information systems, human

and business strategy resource practices, and
production processes that
facilitate achievement of
corporate and business strategy

Corporate strategies deal with plans for the entire organization and change as industry and
Specific market conditions warrant.
Top management has primary decision making responsibility in developing corporate
strategies and these managers are directly responsible to shareholders. The role of the board
of directors is to ensure that top managers actually represent these shareholder interests.
Otobi has developed its mission and vision keeping its business corporate strategies under
consideration. Otobi’s aim is to become the leading furniture manufacturing company by
introducing a wide variety of products with reasonable pricing all over the country”. Otobi
wants to spread it name in both home and foreign countries.

6.2 Business-Level Strategies

Business-level strategies are similar to corporate-strategies in that they focus on overall

performance. In contrast to corporate-level strategy, however, they focus on only one rather
than a portfolio of businesses. Without such crucial information, corporate-level managers
are prevented from best managing overall organizational direction. Business-level strategies
are thus primarily concerned with:
 Coordinating and integrating unit activities so they conform to organizational
strategies (achieving synergy).
 Developing distinctive competencies and competitive advantage in each unit.

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  Identifying product or service-market niches and developing strategies for competing
in each.
 Monitoring product or service markets so that strategies conform to the needs of the
markets at the current stage of evolution.

6.3. Otobi’s Operational Strategies

OTOBI Furniture, Bangladesh also follows some unique and distinct operation strategy to
compete with their competitors. The strategy OTOBI is following, consistent with the
organizational strategy that used to guide the operations function.

7.0 Strategy Formulation

7.1 Input Stage

In the input stage we collected and imputed basic input information for the matching &
decision stage matrices. This stage requires strategists to quantify subjectivity early in the
process. We used our intuitive judgment for inputting data for External Factor Evaluation
Matrix (EFE), Internal Factor Evaluation Matrix (IFE) and Competitive Profile Matrix
(CPM).

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7.1.1 Internal Factor Evaluation Matrix (IFE)
Internal Factor Evaluation (IFE) matrix is a strategic management tool we used for auditing
or evaluating major strengths and weaknesses in functional areas of a business. IFE matrix
also provided us a basis for identifying and evaluating relationships among those areas. In
table: it can be seen that we have identified 10 strengths and 10 weaknesses. Each of them
was given a weight and rating. After multiplying weight and rating score we got weighted
score and by adding them Internal Factor Evaluation Matrix (IFE) score (table i) has been
achieved which is 2.60.
Internal Factor Evaluation Matrix (IFE)
Strengths Weight Rating Weighted
Score
1. Has 3% more loyal customer then competitor 0.07 4 0.28
2. Machineries now only 80% utilized which indicates to 0.05 3 0.15
higher production ability
3. Attractive stores decoration 0.04 3 0.12
4. Well developed website developed to provide 0.07 4 0.28
information to the customers
5. Has 10% large warehouse compare to competitor to 0.05 3 0.15
manage inventory
6. Has IT experts to provide better stock management 0.06 4 0.24
system
7. Company owned 35 billboards around the country to 0.05 4 0.20
reduce promotional cost
8. Can provide best training and development system in 0.05 4 0.20
the industry
9. Has local acceptance for being a local furniture 0.03 3 0.09
company
10. Have enough land and resources to process raw 0.08 4 0.32
materials by own

Weaknesses Weight Rating Weighted

Score
1. Competitors can collect raw materials 5% less cost 0.08 1 0.08
2. Less transport facilities then competitor 0.06 1 0.06

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 3. Lack of efficient furniture designers in the company 0.05 1 0.05
compared to competitors
4. Increased amount of liabilities 0.04 2 0.08
5. Complex hierarchal positions so complexity of chain 0.02 2 0.04
of command
6. Unable to provide attractive offers in the special 0.01 2 0.02
occasions
7. Not considering climate changes while designing and 0.03 1 0.03
promoting furniture
8. Decreasing employees’ dedication due to slow increase 0.05 2 0.10
in salary and facilities
9. Employee turnover rate increased by 15% in last 3 years 0.06 1 0.06
10. Because of inefficient product handling 7% product 0.05 1 0.05
damage occur in last year

TOTALS 1.00 2.60

7.1.2 External Factor Evaluation Matrix (EFE)

External Factor Evaluation (EFE) matrix method is a strategic-management tool we used for
assessment of current business conditions. The EFE matrix is a good tool to visualize and
prioritize the opportunities and threats that a business is facing. The EFE matrix is very
similar to the IFE matrix. The major difference between the EFE matrix and the IFE matrix is
the type of factors that are included in the model. While the IFE matrix deals with internal
factors, the EFE matrix is concerned solely with external factor. We have identified 10
opportunities and 10 threats. As we have allocated weight and rating to measure IFE score
same thing we have done to measure EFE score. Our EFE score (table ii) is 2.49.

7.1.3 Competitive Profile Matrix (CPM)

The competitive profile matrix helps us to identify our major competitors and its particular
strength and weakness in relation to a sample firm’s strategic position. We have compared
our strength and weaknesses with our two main competitors (Brother’s furniture and NADIA
furniture). According to CPM OTOBI (2.80) is in pioneer position (table iii). Brother’s
furniture (2.55) is in second position then NADIA furniture (1.85).

8.0 FINDING AND ANALYSIS

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After analyzing some factors I find out several facts that OTOBI furniture must keep in mind
when there operating business. These finding are very important because I think not
concerning on these factors OTOBI may loss a large number of customer and will not sustain
in the industry. So these important finding are -

 Product price of OTOBI furniture is high.

 Now a day there are huge competitions in furniture industry.
 Because of high competition market share of OTOBI is reducing.
 The threat of new entrants into the industry is low.
 There are not enough outlets available across country to reach the entire customer.

9.0 RECOMMENDATION:

 They should reduce their product price to sustain in the market.

 Competition in furniture industry is high. So they should come up with new
innovative product to get competitive advantage.
 As the market competition is high, so OTOBI should use modern higher technology to
reduce price and improve the quality of products.
 OTOBI also should diversify their product through introducing new product line.
 OTOBI should increase the number of outlets to reach the potential customer.

 To expand their business OTOBI can launch business in other countries.

10.0 CONCLUSION

Otobi is operating their services in Furniture business in our country for the last thirty nine
years. It creates a strong position for furniture as it successfully competing with the other
furniture organizations of Bangladesh. Managing brand is an essential task in every
organization. Otobi has successfully created their brand name and able to spread its wing
internationally which is not only promising for Otobi itself but also for the local brands.

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Some organizations succeed while others fail, even if those companies start their business
with same resourcesbecause of the selection or choice of strategy as well as implementation
of that. A company pursues a strategy to attain superior performance, through achieving its
stated goals. Being pioneer to bring revolutionary changes in the arena of laminated furniture,
Otobi has gained competitive advantages over its competitors. By implementing functional
level strategy successfully, Otobi could achieve superior efficiency, quality, and innovation
and it has become customer responsive.

REFERENCES

1. https://bdbanijjo.wordpress.com/tag/industry-of-bangladesh/
2. http://www.integratedretailing.com/?p=131
3. http://www.furnituretoday.com/
4. http://www.answers.com/topic/furniture-stores
5. http://www.assignmentpoint.com
6. http://www.superbrands.com/bd/images/PDF/21.pdf
7. http://www.scribd.com/doc/65477339/Report-on-Otobi-Furniture-s
8. http://www.otobi.com/
9. http://dspace.bracu.ac.bd/xmlui/bitstream/handle/10361/801/Md.%20Shahriyar%20H
asan.pdf?sequence=1
10. http://www.slideshare.net/

11. http://www.bfidexpo.com/furniture_overview.php?lang/

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