WestLake furniture 1 - EXECUTIVE SUMMARY An attractive...

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EXECUTIVE SUMMARY An attractive business proposal from a key client which promises a tremendous boost of four times its present sales for a reduction of 57.22% in the price of a product line has prompted West Lake Home Furnishings Ltd. (WL) to reassess its current market position and whether it can accept the offer. This offer seems highly lucrative considering that WL is growing at a meagre 0.9% as opposed to a market which is booming at 6.1%. However, keeping in mind long term considerations, WL has decided to negotiate with the client for a pricing of $39.99 and a five year contract for the same. Word Count: 104
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TABLE OF CONTENTS SITUATION ANALYSIS. ..................................................................................................... 5 PROBLEM STATEMENT. ..................................................................................................... 6 OPTIONS. .............................................................................................................................. 6 CRITERIA FOR EVALUATION. ........................................................................................ 6 EVALUATION OF OPTIONS. ............................................................................................. 7 RECOMMENDATION. ......................................................................................................... 9 PLAN OF ACTION. ............................................................................................................... 9 EXHIBITS. ............................................................................................................................. 10 2  |  P a g e
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SITUATION ANALYSIS: West Lake Home Furnishings Ltd. (WL), a Canada-based manufacturer operating through Wholesale, Retail and Internet, is known for its reasonable pricing and modern designs. The company has a market share of 1.24% [Exhibit 1] in a highly fragmented and competitive segment where no player has a share of more than 5%. Increased consumer demand has led to intense competition among existing and new players to capture the growing market [Exhibit 2]. This has driven prices down and led to the adoption of cost cutting measures like outsourcing production to low-cost manufacturing zones in Asia (from where 90% of WL’s production is sourced at present). However, WL’s YoY growth rate for 2005-2006 is only 0.9% while the industry has seen a
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WestLake furniture 1 - EXECUTIVE SUMMARY An attractive...

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