A start for Damro Report Writing

RESEARCH METHODOLOGY

We conducted both primary and secondary research from a Sri Lankan store to gain a better
understanding of Damro entering a new market like Bangladesh.

Primary research was conducted through the help of a sales personnel and managers at Damro
Wijerama branch, several interviews was conducted with them in order to understand their
strategies used and decisions made before entering the India Market. Some of the questions asked
during the Primary Research were as follows:

What were the key factors company looked into when entering a new market?
What are the risks associated with the sourcing of raw materials and manufacturing cost?
Who did the emerging competition impact your decision?

What investment decisions made by the company is giving you the most trouble now?

What’s the worst that has happened so far to the Damro Company in India as of now?

Did infrastructure, access to raw materials, communication and transport links be challenging?

Did the access to cheap labor meet the expected standard?

How beneficial and supportive were the PESTEL factors; Size of economy, potential for growth
Political stability, Property rights, Availability of technology, and Social acceptance.

Secondary research was the main source for us to decide to move into Bangladesh. It was
conducted through data collection via websites, journals and reports. This helped to compare past
and present data (with primary research). The data sources are based on a newly collected exclusive
cottage based industry data. Leveraging the findings from secondary data had helped us come up
with the factors we should consider for the marketing plan of our report, apart from our primary
findings, importantly the secondary research was a main source for us to do the PESTEL Analysis,
Situational Analysis and SWOT Analysis of the Bangladesh cottage base industry.
Situational Analysis
Company Analysis

Established in 1986, Damro is a Sri Lankan furniture company that sells high quality furniture at
an affordable price with an outstanding customer service. Damro became a successful household
brand in during the last twenty five years of Sri Lanka because, of their ability to make affordable
and durable furniture rather than targeting luxury customized furniture. Damro had a cost driven
strategy in order to achieve their economies of scale in furniture manufacturing and also
incorporated simple designs. Damro not only sold quality furniture, it also delivering a higher level
of customer service both locally and internationally.

Damro had its mass scale factory in Nittambuwa, a remote part of the Western Province of Sri
Lanka and having over 175 showrooms Island wide. The company was able to achieve it cost
driven strategy, by cutting down, on raw material and operational cost to a great extent by using
locally available raw material and low priced timber.

The Company started internationally by setting up its first franchise outlet in Chennai, India. This
operation expanded so rapidly that within few years, into Karnataka, Andhra Pradesh and other
southern and northern states of India. With more than 50 showrooms and 1000 franchises. Damro
have also expanded to Australia and is aiming high for their future and plans to expand to the Far
East in recent future. (Rakulan, 2015)

Organisation’s Assets and Skills

Damro’s main product portfolio includes wooden and plastic furniture for home and office. Damro
employs over 20,000 employees and runs an organized process of manufacturing, distributing and
marketing with a combined efficient production process which involves sophisticated technology
that enables them to produce lower products and achieve a competitive advantage in the market.
Damro also includes more than 1,000 dealers for furniture and 300 in trade of electronic
appliances. The company always made sure that they stand hand in hand with the trends and needs
of the market with a high quality output and always to choose their quality raw material from the
Supplier Island wide. Damro has eliminated middlemen in their distribution channel in order to
provide the best quality service for their customers and therefor they have their own distribution
channel.

Not only catering the furniture market, Damro has also carefully diversified their line of business
to Fashion and Apparel sector (Diliganz), Electronics sector- Innovex (washing machine
refrigerators and other electronic appliances) Plantation sector (Agalawatte Plantations and
Pussellawa Plantations), Hotel sector (Marino Sands Hotel/ Marino Beach), Tourism sector,
Shopping Complex (Marino Mall), and acts as distributers of world’s leading appliance brands
such as Panasonic and Samsung.

Damitha Ramanayake, Founder and Group Chairman, DAMRO was recognized for his
perseverance, innovative thinking and for creating a Sri Lankan brand that has an international
outlook. (The Island , 2017)

Business Environment Analysis

The furniture industry has been changing with lifestyle changes of people, and in the recent past
we can witness how ecofriendly furniture have come into the market due to the scarcity of timber
supply which is becoming a global challenge. Importantly the growth of global furniture market
has had impacts with the growth of Real Estate industry. The furniture sector represents 2% - 4%
of the manufacturing industries production value, and the world leaders for the export market in
furniture manufacturing are China, Canada, United States, Germany and Italy. Free trade
agreements have enhanced several opportunities for companies like Damro, and it had utilized the
FTA opportunities with India to grow the business.

Some of the key factors that affect the demand for the furniture include :

Economic Infrastructural Demographic Distribution of

Elasticity
scenario considerations variables wealth

It has been
found that
The average demand for
Consumers'
elasticity for furniture
confidence in
furniture has would be
the economy Marriages,
been found to higher in
of the nation, household
be 1.5 i.e. if countries
growth of the Eg; level of formations,
the income where wealth
Gross National investments in births taking
increases by 1, is more evenly
product, the housing place and the
the demand for distributed
purchasing composition of
furniture is than in
power and age class.
going to rise countries
level of
by 1.5 and where wealth
unemployment
vice versa has a tendency
to be
concentrated.

PESTEL Analysis

These are some of the PESTEL issues that might be faced by Damro as they enter the Bangladesh
Political Analysis

• Political stability

• Export -Import Policy

• Trade Restrictions

• Labour Laws and Labour Unrest

• Tax and Tariff Policy

Economic Analysis

• Economic Growth

• Interest Rate

• Exchange Rate

• Rate of Inflation

• Per Capita Income

• Labour Cost

Social Analysis

• Income Level

• Social Status

• Occupation

• Age

• Family Size

• Cultural Factors

• Fashion Trend

Technological Analysis

• Automation
 • Social Media

• Technological Incentives

• Website

• Supply Chain Management

• Ease of accessibility, information and communication

Environmental Analysis

• Protection of Nature

• Business Ethics

• Corporate Social Responsibility

• Ethical Business Operation

Legal Analysis

• Consumer rights and Law

• Employment protection

• Health and Safety of Labour

• Consumer rights and Law

• Advertising standards

SWOT Analysis
Strength

• Established brand name

• Good experience in the industry
• Access to credit
• Large variety of products
• Skilled laborers with hand carving skills
• Inexpensive labor
• Availability of quality timber
Weakness

• Knowledge of modern furniture making is low

• Knowledge of surface finishing is low

• Less creative marketing efforts

• Certain furniture have a warping nature

• Less elegant designs for certain furniture