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SOURCES OF COMPETITIVE ADVANTAGES OF OTOBI LIMITED

1.0 INTRODUCTION

1.1 Origin of the Report. This report was authorized by the course instructor AFM Abdul Moyeen, PhD to write a term paper on the course Strategic Management as a part of MBA program. This report is written by group 4, composed of four members as envisaged in the title fly. The report was submitted on 19 October 2002.

1.2 Objective. The objectives of this report are:To carry out SWOT analysis of OTOBI LtdTo evaluate the sources of competitive advantage of OTOBI LtdTo analyze the functional level strategy implemented by OTOBI LtdTo study the nature of the business level strategy followed by OTOBI LtdTo explore the corporate level strategy pursued by OTOBI Ltd

1.3 Sources and Methodologies of Collecting Information. The information necessary to write the repot was collected both from primary and secondary sources. Organizational survey and interviews were done to gather the information. All possible efforts were made to ensure the credibility of the report to the maximum extent at the time of writing the report.

1.4 Report Preview. Since OTOBI is the leading laminated board furniture manufacturing company, we have chosen this company to evaluate its sources of competitive advantage. As efficiency, quality, innovation and customer responsiveness are the main building blocks of competitive advantages; therefore these are discussed elaborately under functional level strategy. An effort has been taken to relate the theoretical knowledge with current strategies followed by OTOBI to achieve competitive advantages. This paper attempts to highlight business and corporate level strategy pursued by OTOBI as well.

2.0 BRIEF BACKGROUND OF THE ORGANIZATION

2.1 Background. OTOBI Limited is one of the leading world class furniture manufacturers of its kind in the country. Over the two and half decades of tireless endeavor, OTOBI earned the fame and image of the unique manufacturer of world class products. OTOBI received National Business Award as “Enterprise of the Year” for year 2001. It makes all kinds of metal, laminated board and plastic furniture. The functional utility and durability with the elegance of OTOBI products earned the reliability and confidentiality of the customers. Currently OTOBI’s product range cover the office furniture, household furniture, plastic furniture, hospital furniture, computer furniture, kitchen cabinet, work station, storage rack, decorative

items and interior decoration. Besides these crests, trophy, medal, gift box etc are also the products of OTOBI.

2.2 Founder of the Organization. Country’s famous artist Mr. Nitun Kundu is the managing director of OTOBI. His endless efforts, creative idea and professionalism brought OTOBI at present state. Painter and sculptor Mr. Nitun Kundu graduated from Institute of Fine Arts, Dhaka in 1959, and secured first class first position. The same year he started his career as a designer in the United States Information Services (USIS) Dhaka. He left USIS as chief designer in 1971 and participated in the liberation war. After the war he turned into a free lance painter. In 1974 he conceived the idea of embarking into commercial venture and started manufacturing decorative items at his residence. The name of his mini workshop was “The Designer”.

2.3 Introductory stage of OTOBI. Mr. Nitun Kundu set up a small workshop in a tin shed at Topkhana road in Feb’ 1977 and named it “Art in Craft”. Here in addition to coat pin, cup, crest, trophy etc he started manufacturing decorative items, table lamp and various types of metal furniture. In Bangladesh traditionally wooden furniture are used, but forest resources being extremely limited, Mr. Nitun Kundu anticipated the need for metal furniture and in 1978 and he opened a show room at New Elephant Road, Dhaka and gradually started marketing all kind of metal furniture in a proper manner.

2.4 Growth of the Organization. In 1984-85 Mirpur factory building was constructed. All kind of metal furniture’s were being manufactured at Mirpur factory and marketed through the show room at Elephant road by 1988. The quality of OTOBI products as well as sales and marketing methods was so successful that by 1992 Mr. Nitun Kundu constructed a four storied building at Dilkusha C/A and opened a display center on October 1993. OTOBI set up another factory at Shyampur with continuous market demand, which went into experimental production in 1994. The factory is now full operational with latest machines to manufacture a wide range of most sophisticated furniture so that it can compete in the international market.

3.0 IDENTIFICATION OF INTERNAL STRENGTHS AND WEAKNESSES

3.1 Internal Strengths: Strengths of OTOBI are as follow:Skilled Workforce. OTOBI possesses a skilled and efficient work force. While shifting its manufacturing plant from Mirpur to Shyampur it took all of its skilled work force along with it.Dynamic Leadership. The founder of OTOBI, Mr. Nitun Kundu, is a dynamic person with lot of innovative skills. He is a famous architecture of our country. As Managing Director, he has lead OTOBI to establish itself to be a world class furniture manufacturer.Well Facilitated Production Site. Initially the production site of OTOBI was located at Mirpur which day by day became overcrowded. That’s why OTOBI had to shift some of its production facilities to Shyampur, located beside Dhaka-Narayangang highway. There by they could also avoid burden of municipal tax and other costs. Good Marketing Force. The marketing department of OTOBI is composed of good number of skilled

marketers. The brochures published by this department can not but attract every cultured person. R & D. There is an R& D section in OTOBI which is guided by the MD himself. As the Managing Director of OTOBI is very innovative he keeps himself involve in R&D as well as encourages his employees for even small innovation. 3.2 Weaknesses. OTOBI has the following weaknesses:Failure to Follow JIT. One of the main components of OTOBI’s product is imported from Malaysia, Thailand and Singapore. Due to political unrest OTOBI keep huge buffer stock to meet contingencies. Which makes it unable it to follow JIT. Some times this stock becomes so large that OTOBI has to stop its further selling, and disposes the raw material first. Price of OTOBI Product. For the general people of Bangladesh price of the OTOBI product seems to be little high in comparison to other wood made furniture, which restricts it to get a large customer group.

3.3 Opportunities. OTOBI has the following opportunities:Growing Market Share. Starting from the small corner of the kitchen of a home maker up to the luxurious work stations of the top executives, OTOBI has successfully established foothold through its various type of furniture. Changing Culture. With the change in culture and fashion, people are looking for stylist, well designed furniture for their houses, offices and shops. This opens a broad market opportunity for OTOBI.Growing Concern on Forestation. Every year large portion of forest have been wiped off by the wood- businessmen for preparing the wooden furniture, which has a devastating effect on the environment of our country. Now people have become more conscious about forestation, they have started looking for furniture made of other substitute materials as OTOBI offers. 3.4 Threats. OTOBI has the following threats:New Competitors. Recently in our country a good number of firms are coming up with their innovative and competitive furniture like Partex, Tanin, Akiz Partex. There is also some foreign furniture being imported which becomes threat to OTOBI products.Restriction on Use of Plastic. Recently government has imposed restriction in use of polythene bag due to its detrimental effect on the environment. Government is also thinking to impose restriction on other plastic materials subsequently. As OTOBI is using a good amount of plastic material to produce its product therefore this restriction may become a threat to OTOBI.Use of Rot Iron. Use of rot iron as furniture is also becoming popular day by day with the change of culture and fashion. It is also becoming a threat to OTOBI.Political Unrest. Political unrest is a normal phenomenon in our country. Supply of raw materials and production schedule often gets stuck up due to strike and other political unrest. Thus it hinders the activities of OTOBI like all other industries.

4.0 LITERATURE SURVEY

4.1 Efficiency. A business is simply a device for transferring inputs into outputs. Inputs are basic factors of production such as labor, land, capital, management and technological know how. Outputs are goods and services that the business produces. The simplest measure of efficiency is the quantity of inputs that it takes to produce a given output. That is efficiency= output/input. The more efficient a company, the few inputs required producing given output. Efficiency helps a company attain a low cost competitive advantage. The most important component of efficiency for many companies is employee productivity,

which is usually measured by output per employee.

4.1.1 How to Achieve Superior Efficiency. Superior efficiency can be achieved at functional level. First various primary functions of production and marketing, then various functions of supporting activities of the firm will be discussed.4.1.1.1 Production and Efficiency. Efficiency is the measure of producing outputs from limited inputs. Production can influence efficiency in the following way:

4.1.1.1.1 Economies of Scale. Economies of scale are unit cost reduction associated with a large output. One source of economies of scale is the ability to spread the fixed cost over a large volume of production. Another source of Economies of scale is the ability of the company producing in large volume to achieve a greater division of labor and specialization.

4.1.1.1.2 Learning Effect. Learning effect are cost saving that come from learning by doing, for example learns by repetition how best to carry out a task. In other words labor productivity increases over time and unit cost falls as individual learns the most efficient way to perform a particular task.

4.1.1.1.3 The Experience Curve. It refers to the systematic unit cost reductions that have been observed to occur over the life of a product typically decline by some characteristics amount each time accumulated output of the product is doubled.

4.1.1.1.4 Flexible Manufacturing. The idea economy of scale is that the best way to achieve high efficiency, and hence low unit cost, is through the mass production of a standardized output. Wide product variety makes it difficult for a company to increase its production efficiency and thus reduce its unit cost. The flexible manufacturing technology covers a range of manufacturing technologies designed to:Reduce set up time for complex equipmentIncrease the utilization of individual machines through better scheduling Improve quality control at all stages of the manufacturing process

4.1.1.2 The Marketing and Efficiency. The marketing strategy that a company adopts can have a major impact upon the efficiency and costs structure of an enterprise. It refers to the position it takes with regard to pricing, promotion, advertising, product design and distribution. The important role of the marketers is to reduce customer defection rates and building customer loyalty.

4.2 Quality. Within any given industry some companies are more profitable than others as those companies have some sources of competitive advantage like quality. Quality products are goods and services that are reliable in the sense that they do the job they were designed for and do it well. The impact of high product quality on competitive advantage is two fold:High quality products increase the value of those products in the eyes of consumer. In turn this enhanced perception of value allows the company to charge a higher price for its products.The second impact of high quality on competitive advantage comes from the greater efficiency and the lower unit costs it brings. Less employee time is wasted making defective products or providing substandard services and less time has to be spent fixing mistakes, which translates into higher

employee productivity and lower unit cost. Thus high product quality not only lets a company charge higher prices for its products, but also lowers cost. This relationship will be much more clear if we follow the figure given below:

4.2.1 Achieving Superior Quality through TQM Concept. The enhanced reputation for quality lets the company to charge a premium price for its product, and the elimination of defects from the production process increases the efficiency, hence lower costs. A company can use different means to achieve superior quality. The main one is total quality management (TQM). It is a management philosophy that focuses on improving the quality of a company’s product and services and stresses that all company operations should be oriented toward this goal.

4.2.2 Implementing TQM. Implementation of TQM requires close operation among all functions in the pursuit of the common goal of improving quality. It is a process that cut across the function.

4.2.2.1 Building Organizational Commitment. TQM concept will be useless for a company unless it is embraced by every one in the organization. Both top management and general employee can play a major role in this process.

4.2.2.2 Focus on Customer. TQM practitioners see a focus on the customer as the starting point. The marketing function should play a vital role here. It needs to identify what the customer want from the good or services that the company provides; what the company actually provides to customer. The gap between what customers wants and what they actually get is called quality gap, and this gap should be eliminated as far as possible.

4.2.2.3 Setting Goals and Creating Incentives. The task of setting goals and creating incentives is one of the key tasks of the top managements. The management should set a challenging quality goal and should create incentives for reaching those goals.

4.2.2.4 Solicit inputs from Employees. Employees can be a vital source of information. Whatever the forum, soliciting inputs from lower level employees requires that management be open to receive and acting on, bad news and criticism from employees.

4.2.2.5 Identifying Defects. Product defects most often occur in the production process. TQM tells that defects should be identified during the work process, trace them to their source, find out what caused them, and make corrections so that they do not recur. One technique that helps greatly in tracing defect to their source is reducing lot sizes for manufactured products.

4.2.2.6 Building Relationship with Suppliers. A major source of poor quality finished goods is poor quality component parts. To decrease product defects a company has to work with its suppliers to improve the quality of the parts they supply. Following steps will be beneficial for a company which is practicing TQM concept:No of suppliers has to be reduced to manageable proportionsThe company should establish a long term contractual relationship with the suppliers 4.2.2.7 Breaking down Barriers between Functions. TQM implementation requires organization wide commitment and substantial cooperation among functions, i.e.; R&D has to cooperate with Production to design products that are easy to manufacture.

4.3 Innovation. Innovation is perhaps the single most important building block of competitive advantage. It can be defined as any thing new or novel about the way a company operates or the products it produces. Innovation means new ways of doing things. It includes advances in the kinds of products, production process, management system, organizational structure and strategies developed by a company. Although not all innovation succeeds, those do can be a major source of competitive advantages. It gives a company something unique which its competitors do not have. In the long run competition can be viewed as a process driven by innovation. For this innovation, the company being the sole supplier of a new product can charge a premium price. By the time competitors succeeded in imitating the innovator, the innovating company had built up such strong loyalty and supporting management process that its position proved difficult for imitators to attack.

4.3.1 High failure rate of innovation. Though innovation can be a source of competitive advantages, the failure rate of innovative new products is high. One recent study shows that only 12 percent innovative products earned an economic profit. There are many reasons that new products fail to generate economic profit as the followings are:UncertaintyPoor CommercializationPoor Positioning strategyTechnological MyopiaSlowness in Marketing

4.3.2 Building Competencies in Innovation. Companies can take a number of steps in order to build a competency in innovation and avoid failure. These areas are discussed below.

4.3.2.1 Building Skills in Basic and Applied Research. Building skills in basic and applied research requires the employment of research scientists and engineers and the establishment of a work environment that fosters. A number of top companies try to achieve this by setting up university- style research facilities, where scientists and engineers are given time to work on their own research projects, in addition to projects that are linked directly to ongoing company research.

4.3.2.2 Project Selection and Management. Project management is the overall management of the innovation process, from generation of the original concept, through development, and into final production and shipping. Project management requires three important skills: the ability to encourage as

much generation of ideas as possible; the ability to select among competing projects at an early stage of development so that the most promising receive funding and potential costly failures are killed off; and the ability to minimize time to market. Project development phases are shown below:

4.3.2.3 Cross Functional Integration. Tight cross-functional integration between R & D, production, and marketing can help a company to ensure the following: Production development projects are driven by customer needsNew products are designed for ease of manufactureDevelopment cost is kept in checkTime to make is minimizedClose integration between R & D and marketing is required to ensure that product development projects are driven by needs of customers. A company’s customer can be one of its primary sources of new product ideas. Identification of customer needs, and particularly unmet needs, can set the context within which successful product innovation takes place. There are two ways to achieve it:

4.3.2.3.1 Product Development Teams. One of the best ways to achieve cross-functional integration is to establish cross-functional product development teams. These are teams composed of representatives from R & D, marketing and production. Certain attributes seem particularly important for a product development team. These are:The team should be led by a project manager who has both high status within the organization and the power and authority to obtain the financial and human resources that team needs to succeedThe team should include at least one member from each key function The team members should be physically collocated to create a sense of camaraderie and to facilitate communicationThe team should have a clear plan and clear goals, particularly with regard to critical development milestones and development budgetsEach team needs to develop its own process for communication and conflict resolution.

4.3.2.3.2 Partly Parallel Development Process. One way in which a product development team can compress the time it takes to develop a product and bring it market is to utilize a partly parallel development process where product development proceeds without consideration of manufacturing issues. To solve this problem companies typically use a process which is shown below. In the partly parallel development stages overlap so that, for example, work starts on the development of the

production process before the product design is finalized. By reducing the need for expensive and time-consuming product redesigns, such a process can significantly reduce the time it takes to develop a new product and bring it to market.

A sequential Process

A partly Parallel process

4.4 Customer Responsiveness. Customer responsiveness is the ability of a company to do a better job than competitors of identifying and satisfying the need of its customers. Consumers then place more value on its products, creating a differentiation based competitive advantage. Achieving superior quality and innovations are an integral part of achieving superior customer responsiveness. Another factor that stands out in any discussion of customer responsiveness is the need to customize goods and services to the unique demands of individual customers or customer group. There are two other prerequisites for attaining this goal. The first is to focus on the company’s customers and their needs, and the second, to find ways to better satisfy those needs. 4.4.1 Customer Focus. A company can not be responsive to its customers needs unless it knows what those needs are. The means to this end are demonstrating leadership, shaping employee attitudes, and using mechanism for bringing customers into the company. 4.4.1.1 Leadership. Customer focus must start at the top of the organization. A commitment to superior customer responsiveness brings attitudinal changes throughout a company that can ultimately be built only through strong leadership.

4.4.1.2 Employee Attitude. Achieving a superior customer focus requires that all employees see the customer as the focus of their activity. Leadership alone is not enough to attain this goal. The objective should be to make employees think of themselves as customer- to put themselves in the customers shoes.4.4.1.3 Bringing Customer into the Company. “Know thy customer” is one of the keys to achieving superior customer responsiveness. Knowing the customer not only requires that employees think like customers themselves; it also demands that they listen to what their customers have to say, and, as much as possible bring customers opinions into the company.4.4.2 Satisfying Customer Needs. Once a focus on the customer has been achieved, the next task is to satisfy the customer needs that have been identify. Companies can provide a higher level of satisfaction if they customize the product and minimize the time it takes to respond to customer demands.4.4.2.1 Customization. Varying the features of a good or service to tailor it to the unique needs of groups of customers or, in the extreme case, individual customers is known as customization. 4.4.2.2 Response Time. Giving customers what they want, when they want it requires speed of response to customer demands. To gain a competitive advantage a company must often respond to consumer demands very quickly.

5.0 FUNCTIONAL LEVEL STRATEGY IN OTOBI

5.1 Efficiency in OTOBI. We have learned in our literature survey how a company can achieve superior efficiency that is, how it can reduce its cost. There are various functions undertaken by OTOBI which directly or indirectly contribute to achieve efficiency.5.1.1 To achieve economies of scale OTOBI goes for a large volume of production together. For this purpose, they do not leave out the small orders also. What they do is compile all the small orders and then go for production.5.1.2 Efficiency is also achieved through division of labor and specialization. OTOBI has divided its labor force for various segments and goes for specialization; chair, table, kitchen cabinet, hospital furniture, office furniture etc. 5.1.3 OTOBI gives emphasis on the experienced worker. If a little bit higher pay is also required they are ready to pay, but it always try to hold up their experienced and old employees. OTOBI shifted their plant from Mirpur to Shyampur, some of the local workers refused to go to the new location. OTOBI gave them higher payment, accommodation and other facilities to take them to Shyampur. 5.1.4 To make the manufacturing process flexible, recently OTOBI has imported modern machineries from Germany. Locally they are continuously trying to improve their equipments to ease the manufacturing process. 5.1.5 OTOBI does not leave out even single customer. Again they are also careful that in the process of customization cost does not run out of limit.5.1.6 OTOBI has become so renowned in the field of furniture that they could establish brand loyalty in thousands of customer. Through customization they do not allow any individual customer to defect from their company.5.1.7 Mr. Nitun Kundu, the founder of OTOBI is a very creative and innovative person. He always engages himself in R&D. He also encourages his employees to think to innovate. Recently OTOBI has innovated a number of small engineering tools which have made the production process easier and cost effective. The teams which innovate some thing new get a good amount of remuneration.

5.1.8 Through good leadership OTOBI could establish a well coordinated network and cooperation among the employees. Employees are trained time to time on a new machine or technology.

5.2 Quality in OTOBI. OTOBI produces high quality world class furniture, that’s why customers have a high perceived value for OTOBI products in their mind. There by OTOBI could charge premium price for its products. And the customers are ready to pay more amounts for a quality OTOBI product.5.2.1 Since OTOBI has a very efficient work force, their efficiency reduces cost of production to a greater degree.5.2.2 OTOBI could establish a strong organizational commitment to achieve superior quality to beat the competitors in the quality aspects. Starting from managing director of OTOBI up to general worker every one in OTOBI is self motivated to produce quality products.5.2.3 OTOBI gives great emphasis on the customer need. The company is always trying to eliminate the quality gap. When customers buy any OTOBI products they are ensured to be satisfied that the price they are giving for a product is as worth as the quality of the product itself. The customers bear the feelings that they are not being cheated with a huge price that OTOBI charges.5.2.4 OTOBI often offer challenging goals to its employees. Side by side adequate incentives are also arranged for meeting those goals.5.2.5 OTOBI solicits the ideas taken from any level of worker. Any worker /employee of OTOBI are at a liberty to talk about any idea which may improve the quality. There is a provision of fortnightly meeting in OTOBI, chaired by MD himself. In the meeting all the production managers discuss about the ideas and information generated at worker level of their respective divisions. Afterwards, R &D section works on it if it is a viable one. This accepting attitude of management facilitates to have a unique working environment in OTOBI.5.2.6 OTOBI used to follow TQM concept in identifying the defects. The defects are traced in the production process. More over OTOBI produces its products in smaller lots size, that’s why even if defective products are produced their number remains smaller, which also decreases the wastage. Again with short production lot, defects show up immediately, they are quickly traced to the source and problems are solved. 5.2.7 OTOBI has a manageable number of suppliers. There are three types of suppliers in OTOBI:Local items- procured from local suppliersImported items- procured from overseas suppliersStationary items- procured from local suppliersOTOBI believes in having long term contractual relationship with the domestic and overseas suppliers. The suppliers of OTOBI also feel comfortable to work with OTOBI for such long term relationship.5.2.8 OTOBI could establish a very good cross functional relationship among different divisions. Here we may discuss about the operation management function. Marketing department does the marketing forecast, accordingly production manager carry on acquisition of resources, and thereafter conversion of inputs into outputs is done through transformation process. If the marketing department could identify any change of customer need, immediately the idea is forwarded to R&D department. R&D department acts accordingly and improve or restructure the design.

5.3 Innovation in OTOBI. As OTOBI is a leading and pioneer furniture maker in our country, it follows the continuous improvement in case of machinery, materials, and labor utilization and production methods. There is a tool machine section which is used as part of research and development division for machines.

Out of numerous innovative products, parts and process few of those are discussed below. 5.3.1 Drill Punch Machine. It is a riveting item which is required for connecting the sheets in the chair. Earlier they used to take 03 minutes to reduce that. With a continuous improvement it takes hardly 4 seconds which saves time. Earlier they need to do it manually, now machine can do it.

5.3.2 Cluster Tool. Earlier it used to take 5 minutes to make a cluster tool; now with the development by tools section it takes only 1 minute.

5.3.3 Bench Marking. During its initial production they bought different items from India, Singapore, Malaysia, and Sweden as model. Now they do not follow any particular company. But they try to improve their product comparing with international product. Earlier they used to produce steel Almirah which costs more than 18000 taka. Afterward observing different Almirahs of Alico Company based in Japan, Godrej from India and Oloy company jointly operating (India, Italy) they designed a new Almirah which is compatible with those but costs only 10000 taka.

5.4 Customer Responsiveness in OTOBI. OTOBI attends all the trade fairs in Bangladesh to communicate their performance to the customers. It has set a rare example by winning the first prize in Dhaka International Trade Fair since 1981 – 2001 by offering quality products, service and pavilion decoration. They work with an aim to increase “SATISFIED CUSTOMER”. To respond to the need of customers OTOBI has established their presence across the country by extending dealer network in almost all district headquarters. 5.4.1 OTOBI manufactures different products in two ways: Normal work and Project work.5.4.1.1 Normal Work. For normal work OTOBI forecasts their production requirement and prepare a detail work schedule for a particular period. According to the schedule they produce a wide variety of furniture. This variety of furniture mostly serves the customer needs.5.4.1.2 Project Work. OTOBI takes some project to serve individual customer to produce customized product. This includes bulk order of particular furniture, kitchen cabinets etc.5.4.2 Customer can easily purchase required furniture from the show room or dealers any time which are produced through normal work. For customized product they take the order from the customer first and deliver those after production. They take around 30 days to deliver and fix a kitchen cabinet. To provide home service delivery, people from OTOBI go to the customer’s house for required measurement of kitchen cabinet and after manufacturing again they go to that particular customer’s house to fix that. 5.4.3 OTOBI delivers it’s product by its own transport to the customer if the order is of more than taka 100000.5.4.4 OTOBI also gives preference to individual customer’s taste. They deliver customized product according to customer’s choice of design, color, shape and size.

5.4.5 Products are prepared and delivered in parts with a manual so that customers can easily transport it to home or office and then assemble it. Besides providing warranty, OTOBI also renders after sales service through its different outlets.

6.0 BUSINESS LEVEL STRATEGY OF OTOBI

Companies pursue a business level strategy to gain a competitive advantage that allows them to outperform rivals and achieve above average returns. They can choose from three basic generic competitive approaches; cost leadership, differentiation and focus, although these can be combined. OTOBI has brought changes in production technique through development of flexible manufacturing. That’s why they can follow both cost leadership and differentiation strategy in the following way:Through flexible manufacturing process OTOBI has reduced its cost. They are using various tools innovated by them for this purpose.OTOBI being a differentiator is also realizing significant economies of scale by standardizing many of the component parts used in end product.OTOBI is also reducing both of its production and marketing costs. Through attractive brochures it offers no of packages of options from which customer gets readily his/her expected one. By following both cost leadership and differentiation strategy, OTOBI is getting more profit than its competitor. Because it is reducing the cost and at the same time increasing the perceived value of their product.

7.0 CORPORATE LEVEL STRATEGY OF OTOBI

The principal concern of corporate strategy is identifying the business areas in which a company should participate in order to maximize its long term profitability. When choosing business areas to compete in, a company has several options. It can focus on just single business, it can diversify into a number of different business areas or it can vertically integrate, either upstream to produce its own inputs or downstream to dispose of its own outputs.The corporate level strategy of OTOBI is to concentrate on a single business. It competes successfully within the confines of a single business that is in the laminated furniture business.OTOBI focuses its total managerial, financial, technical and physical resources and capabilities on competing successfully in a single area.As it is a fast growing business, demand on its resources are very significant.Even after having the capability of diversification, OTOBI does not go for that. It sticks to its knitting that is it sticks to doing the furniture business, what it knows best. OTOBI does not want to do any mistake of diversifying into areas about which it knows little and where its existing resources and capabilities add little value.

8.0 CONCLUSION

Why do some organizations succeed while others fail, even if those companies start their business with same resources? The only reason is that 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.

9.0 RECOMMENDATIONS

Our group recommends the followings:OTOBI should expand their distribution channel up to district level.OTOBI should implement JIT which will help them to reduce cost.Beside direct personal selling effort OTOBI should go for TV ad also, which will reduce their marketing cost at the same time it will achieve wide spread fame.OTOBI should take part in “Save the environment program” which will make them more responsive towards customers.Finally as the competition is increasing day by day, OTOBI should focus more on their quality and they should also try to reduce their price to retain the customers.