West Lake Essay

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West Lake Home Furnishings Ltd. Case Study West Lake Home Furnishings Ltd, a Toronto based manufacturer of home goods, began its operations in 1970s. It started with table lamps and slowly expanded the line of operations to floor lamps and lighting fixtures. Most production takes place overseas accounting to 90% and the remaining 10% is manufactured in Canada, to utilize short term orders and customized projects. West Lake's business strategy is to lead in the home furnishings industry, providing unique and innovative designs according to customers needs and also to improve its internet business. The Canadian market for lighting and lights fixtures is very competitive. All retailers contributed no more than 20% and in 2006, this retail market accounted for $900 million. A wide variety of lightings and fixtures were offered by the wholesale chains. It displays about four national brands and a private label line thereby letting customers choose home furnishings to their style. If there is an increase in price from either of the competitors, customers will switch to the closest substitute that is less expensive. Similarly, the threat of new and actual entrants with products closest to the existing company designs and reduced prices affect the growing firms. As Asia turned to be the base for low-cost production, many retailers shifted their production in China, particularly, thus providing wide ranges of products to consumers, at lower prices. Consumers preferred a small set of retailers when buying home goods and the large national brand stores remained top in their list. They also gave preference to small retailers who were specifically marketing customized designs. Charles Bowman, the CEO of West Lake Home Furnishings, was offered a proposal on May 2007, by one of its top wholesale customer to reduce the price of decorative lamps from $69.99 to $29.99

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