Case Study on Forta Furniture

Problem of Forta Furniture

            Marita Petrescu is the CMO or chief marketing officer for the organisation named Forta Furniture. After visiting and gaining insights about an international trade show, she along with the two vice presidents of Forta’s two brands gained some important information about expansion into foreign markets. After working on her reports, she has determined that in Poland, for Forta Branded Entry, she can make a 2.5% market share in three years. Meanwhile, as a Fota Private-Label Entry, the organisation can make a 4% market share in three years. In the same market, Abilit Branded Entry can make a 3% market share in three years. As a private-label entry, Abilit can make a 4.5% market share in three years. In Bulgaria, Forta Branded Entry is determined to make 8% market share and as a private-label entry, it is predicted to make a 4% market share in three years. In case of Abilit, as a branded entry, it is identified to make a 6% market share while as a private-label entry, it is determined to make a 2.5% market share in three years.

            The main problem is that Marita is not sure about which brand is suitable for international expansion. She finds it difficult to determine which country can ensure both success and financial opportunity. In addition to it, there is a need to determine which factors should be considered in international expansion. These are the problems which need to be solved.

Background of Forta Furniture

            As explained above, Marita Petrescu is the CMO or chief marketing officer for the organisation named Forta Furniture. After visiting and gaining insights about an international trade show, she along with the two vice presidents of Forta’s two brands gained some important information about expansion into foreign markets. Forta was actually the leading organisation in the furniture market of Romania. However, its growth had decreased significantly since 2010 because of the penetration of foreign organisations in the market. Due to it, Abilit was acquired by Forta in 2013 which was the first major response of Forta against the penetration of foreign firms.

            Expansion is quite important it has become essential for Forta if the organisation wants to achieve more revenues and increase it sales. However, if Marita recommended expansion, it would be important for her to develop an expansion plan. For instance, it was critical to determine the place or country where Forta should expand and in how much time. In addition to it, there would be many other questions which would need to be answered. Marita commission two reports and they analysed Poland and Bulgaria as potential countries where Forta and its brands could expand. However, it is important to note that Marita sti8ll needed to identify which brand was most suitable for expansion.

Recommendations of Forta Furniture

Following are the recommendations which should be considered by Marita for expanding the brand and ensuring that its revenues are increased:

Key Factors of Forta Furniture

            When it comes to expansion, there are some factors which need to be considered because if they are not considered, expansion into foreign markets can be ineffective and it can imply financial losses for the firm. Some of the major factors include characteristics of customers in the foreign market, market potential, legislations and policies, and competitors in the market. These are some of the most important factors that have to be considered when it comes to foreign expansion. In addition to it, there are some other factors as well and if they are considered, they can facilitate the process of expansion. For instance, they include the revenue potential of target market and sales potential. Both of these factors help the firm in identified whether expanding into the target market will even be beneficial for them or not.

            Characteristics of customers are important because without understanding and identifying the characteristics, it is not possible for the firm to target the audience in an effective manner. This factor can help Forta in knowing if its products are even desired by the customers in target markets or not. Meanwhile, market potential will help the firm in knowing if the market is capable of producing sales and revenues for the firm or not. It means that the market must be strong enough to sustain the presence of yet another foreign market. Other factors are similar to these factors as they also help in expanding into the foreign markets in an effective manner (Yoder, Visich, & Rustambekov, 2016).

Reasons for Waiting of Forta Furniture

            It is recommended that Forta should wait for a short period before expanding into the desired foreign markets. The main reason is that Marita does not have enough information about the target markets at the moment. In order to collect this information, she need to conduct some analyses and even take suggestions from her seniors. If this data is not considered into expansion, it can adversely influence the firm in terms of budget and finances. Therefore, it is important for Marita to consult her superiors and conduct markets analyses before taking an action. In addition to it, it is important for Marita to ensure that she has the recommendations of her superiors in her final decision (Kumar, Gaur, & Pattnaik, 2012).

Suitable Brand of Forta Furniture

            Actually, both Forta and Abilit are suitable for foreign expansion. Forta should be expanded into Bulgaria as a branded entry because it can mean an 8% market share in three years. Meanwhile, Abilit should be expanded into Poland as a private-label entry. After all, it can enable Ability to have a 4.5% market share in three years in the foreign market (Quelch & Easwar, 2018).

References of Forta Furniture

Kumar, V., Gaur, A. S., & Pattnaik, C. (2012). Product diversification and international expansion of business groups. Management International Review, 52(2), 175-192.

Quelch, J. A., & Easwar, K. (2018). Forta Furniture: International Expansion.

Yoder, S., Visich, J. K., & Rustambekov, E. (2016). Lessons learned from international expansion failures and successes. Business Horizons, 59(2), 233-243.