BoConcept and the Japanese market
- The effect of Copycats
- Asian culture and business etiquette
- The persistent knowledge of the Japanese consumer
- Spending habits
- Demographics and education
Discussion of statements
A) “It is an advantage for BoConcept to use franchising as a penetration strategy in a new market.”
B) “There is a need to adjust product parameters in the Japanese market”
C) “Japanese culture has no significance when BoConcept operates in the Japanese B2B market.”
Identifying a challenge and solution for BoConcept
- Possible solution
The company BoConcept was established in 1952, when the two danish cabinetmakers Jens Ærthhøj Jensen and Tage Mølholm decided to open a furniture studio in Herning.
They had a vision to produce furniture that was both high quality in design but also functionality.
Their vision led to enormous success, they went from being a small studio to becoming the most global danish furniture chain, with 334 successful showrooms in 66 countries shared on 6 of the 7 continents.
Meaning that BoConcept is present in over a third of the world and showing their global identity.
I started off saying that BoConcept is the most global Danish furniture chain with success, and they do have a fine turnover, however it is not what I would call satisfying.
When one looks at the possibilities of strengths of the company, the initial impression is that the company is not utilizing it to its potential.
In the many sources, I see lots of opportunities and ideas to create more revenue, but ideas will stay ideas without action.
With a revenue of 1.26 billion DKK in 2017-18 and only 3.64% in growth in the year 2018-19 , it is not exactly what I would call a fast-growing business.
BoConcept does a lot to exist in the global market. But their expectation to the many markets they are in, it doesn’t give the result that they had maybe hoped for.
Their top priority is mainly to expand to new markets, and make new acquaintances more places and to reach their goal of bigger revenue.
With all that said, it is shown in the sources that their strategy hasn’t been promising. A relatively nice revenue but a confusingly low profit of what they present.
This is usually a sign of wrong growth-strategies, they cannot control their cost, and with expansions as their top priority it is worrying when a company have trouble with costs.
Choosing a growth strategy that doesn’t affect their growth negatively or slowly while keeping costs in mind is key to a successful business.
BoConcept first went in the market development in 1976, where they change their name to Denka
to conquer the international markets, and therefore the company moved to designing their collections specially to the individual markets, they tailor made the products and the marketing to the each of the markets.
This will also look like an internal improvement for them. BoConcept creates new customer segments with this strategy
they are creating growth and seeking out individual needs of the markets, therefore concentric diversification as a growth strategy.
Therefore, two of their fist years as a company they are undergoing an internal restructuring of their company, which is put to improve them as a business, increase market capacity and therefore higher revenue.
I 1979 they choose to move to a new kind of product group, which is related to the company’s existing products, but they are strongly customized
it’s their wall system that could be built and put up in the way that the customer wants it, therefore it became a part of their product range and made it more personal for the customer, it was a product that could cover the individual needs for the consumer.
Their growth strategy that year would therefore be concentrated horizontal diversification.
The company continues the product development and to spread out to new product groups that still reach out to the company’s existing customer groups.
In 1988 Denka Club 8 Company is taken over, and choosing to use the growth strategy horizontal integration.
The same year the collection is further expanded this time their “Xilo” dresser and the kid’s furniture collection “Color 4 Kids” becomes a huge success all over the world.
This shows their strategy for market development is a quite good growth strategy, the customers took this well, this is called the horizontal diversification growth strategy.
They continue to develop their good market development and open more stores in the global market in 1993
this year they further open stores in France, The US and China where they are taken in well and so is their new product development due to its groundbreaking modular construction and finish in MDF with clear lacquer.
The company further continues their product development and to improve their products with new technology
and the new ideas to how the products can create a bigger attention at their customer groups, for example their Indivi 2 series which was their first couch production.