ible takeover target and it needs to develop a new strategy if it is to remain successful and competitive among the new competitors.
The furniture industry is dominated by large companies, with many smaller companies filling out the rest of the market. In 1987, the top 10 companies accounted for $4.837 billion in revenue and a 32.6 percent market share of the entire American furniture industry. The marketing has shifted from local companies to large national chains which use gallery stores to showcase their offerings, and which benefit from economies of scale in doing so. The trend toward larger companies can also be seen in the increase of market share among the top ten manufacturers from 25.1 percent in 1986 to the 32.6 percent level in 1987.
Customers are divided into two very different segments: residential and business (handled by the contract division). Residential customers are handled by the residential division, the Burris division (which focuses on upscale upholstered furniture) and the Hammary division, which sells wooden occasional tables. Residential customers buy in small lots (single units in most cases) and are typically homeowners or renters with enough disposable income to invest in new furniture. Couples and families are often purchasers, and there may well be more than one decision maker involved in the process. Impulse buys can take place in this market segment.
In the business segment, the company sells desks, chairs and credenzas to the business market. Here, cost is an overwhelming factor, as is quality and durability of the product. Where residential customers purchase single or small lots, business customers purchase in often large quantities and may purchase frequently for different divisions and locations. The decision making process typically involves more than one decision maker, but the decisions are based on negotiated delivery and pricing as well as on styling. Impulse buys are not c...