Furniture Industry Needs 'Differentiation' Strategy

Article excerpt

Design innovation and creativity are no longer enough to get export orders.

Furniture manufacturers have to adopt a Focus-Differentiation strategy that will concentrate export marketing efforts and resources towards niche markets.

This was the recommendation made in the 2006 State of the Sector Report on Furniture based on three years of research and data by the Private Enterprise Accelerated Resource Linkage (Pearl2).

Pearl2 is a Private Sector Development project of the Canadian International Development Agency (CIDA) managed by Agriteam Canada.

In partnership with the De La Salle University (DLSU), Manila through its Center for Business and Economic Research and Development (CBERD), the project conducted surveys among members of the Chamber of Furniture Industries of the Philippines (CFIP); Cebu Furniture Industries Foundation (CFIF); and the Iloilo Furniture Manufacturers Association (IFMA) for this report.

According to the report, the furniture sector remains under intense global and regional competitive pressures.

While foreign trade buyers still find design innovation and creativity to be the most valuable competitive advantage of Philippine-made furniture, most local firms are unable to price competitively, thus unable to effectively protect their market share.

Bulk of these furniture exports last year went to the US, the largest Philippine export market for the product. The US, Japan, Australia, the UK, and Italy are the industry's five leading export markets.

On the supply side, China has recently displaced Italy as the global leader in furniture exports. …