August 4, 2019 –

A household name in the Egyptian Furniture Business

Fail

The Problem

The client  is a classic furniture manufacturer based in Cairo. Due to the changing consumer taste of their  target audience and their drifting away from purchasing classic furniture,  the client's management is considering a pivot towards more modern based furniture designs or looking for classic furniture opportunities abroad.  Acumen Consulting was hired to conduct a market study of the furniture industry in Egypt to identify the latest consumer trends and the type of furniture that has the largest revenue potential and the feasibility of expanding or transforming to the new product line. Additionally, an export strategy was formulated to maximize the potential export opportunities and optimize the selection of the target countries.

Approach

The Approach

Acumen Consulting conducted a market study of the furniture industry covering field and desk research, expert interviews, surveys, exhibitions and mystery shopping. Data analytics derived insights on recent consumer trends and forecasts.

A feasibility study was conducted to measure the profitability of opening a new factory based on the potential opportunities and market share to be obtained by the client in the next five years. Production experts were interviewed to construct the technical and business requirements of operating a modern furniture factory.

For the export strategy, an analysis was made on the global consumption of classic furniture and a shortlist of  countries was created undergo further analysis. The final list of countries were selected through an algorithm that takes into consideration global trade volume, Egyptian trade with partner country, trade growth rates, and geo-political constraints.

The Results

Modern furniture was selected as the trend with the highest potential in the next five years for the client's target audience. A decision was made to open a modern furniture factory with profit forecasts up to 30% profit margin.

The export strategy was finalized to target the highest performing countries based on the algorithm. Initial contact was made with potential importers in the target countries.