About us:
We are Tree, a
furniture design studio that provides 100% fresh design scheme for customers. We
are a young team with different background designers who love design and are
full of passion to pursue a serious attitude towards life. As our mission said
“design for creating a better and different life style”, we hope that through
our design concept, we can make our customers be aware of that furniture can
change their life style as well as facilitate their pursuing of quality life as
we did either. For long term development, we want to have our own brand and to
be one of the best original furniture design companies in the future. But now, since
we are new established studio in small scale, our business is just to provide
design schemes for furniture companies, such as
The schemes
contain solid wood furniture, panel furniture, comprehensive furniture,
creative furniture, etc. Meanwhile, we have integral collocation service with
3D picture and freehand sketching if customers require this.
Concerns and Pressures We Currently Faced with…
In order to adapt
to the concept of furniture companies, we must design the suitable furniture
for their brand images, which means our designers’ creation is on the basis of
specific requirement from customers (furniture companies). It limits the
designer's imagination and ability; besides, it hinders our brand creation opportunities
As a small scale
design studio, when cooperate with big companies, we face severe competition
with other design firms for the sake of getting contracts from big furniture
companies. Time and resources invested for those competitions make us
vulnerable in front of high risks of failures.
Designers cannot
directly get access to market preferences, reactions and predict market trends,
so it’s hard to create something customers like. In other words, we will lack
the capabilities of knowing designing trend, which is the key competitive
advantage of a design company’s success, particularly to make our own brand. In
addition to that, a case often needs a whole series of design, including bed,
desk, cabinets, etc. Therefore, our
company has a heavy pressure of creation inventory (a series of designs would
be useless which cost money and time).
We Need a Change---Inspiration of Value Chain Redesign
Since there are
such problems and concerns now, we plan to change our operation mode, make a
breakthrough and innovation. The effective way we choose is to directly
cooperate with manufactures through a virtual network platform to saves the
link with furniture companies, which may benefit for achieving the maximization
of interests and our vision, see the value
chain below:
Now, through the
directly cooperation with manufactures on Internet, we hope to change our value
chain into the new style, as illustrated on the right picture. Customers can
order what they like based on our own brand designing. Then manufacture
confirms the order and makes products according to the drawings. Also,
manufactures can directly delivery the furniture to customers. The most
important link from this value chain is that the end-users can input their
feedback, whether is the preference about our design or the comments about the
practical application via the web. All of these data would be collected and
arranged as sources of our future design basis. This unique data collect
channel is the key element in establishing our competitive advantage among
rivals.
So based on these original ideas, we need to choose a suitable manufacturer which complies with the following requirements:
- Manufacturers that can accept retail orders.
- Has its own product-line and delivery service
whether it is out sourcing.
- Products maintain high quality and the
manufacturing engineers are flexible to adjust to our designs.
- Want to seek breakthrough and passion with
furniture industry, sharing similar values with our company.
Manufacturing company’s background
LuckyHome is a furniture
manufacturing company in mainland China. It offers a complete products line,
including stationary and motion sofas, loveseat, sectionals, recliners, chairs,
etc. The goal of this company is to produce high quality and designable
furniture with different kinds of materials on affordable prices. Also, it can
provide first-rate deliver service to customers. In addition, this company
recruited many manufacturing process engineers to assist manufacturers in
developing and maintaining the capability to respond quickly market changes
while producing products that are competitive in terms of price, styling, and
quality. The advance technologies implemented in this company can support a
suit service to meet different collaborate companies’ needs.
There is no doubt
this company is in the line with the requirements of being our partner, so we
began to contact with them, discuss the cooperation plan and eventually
established a cooperative relationship with them through a virtual community
via www.furniture on-line.com. Before we go any further, a mature
understanding of the virtual world would be quite a necessity. Therefore, we
answered following questions to confirm the decision of making use of virtual
community is wise enough.
What is virtual community?
In general sense,
community usually refers to a social unit that shares common values. A virtual
community is not community under the original definition since it is dispersed
geographically. However, it is a social network of individuals who interact
through specific social media, potentially crossing geographical and political
boundaries in order to pursue mutual interests or goals which has the same
effect with the traditional sense of the community. In other words, virtual
communities resemble real life communities. They both provide support,
information, friendship and acceptance between strangers (Wellman, 1999). One
of the most pervasive types of virtual community is online community, just as
the way we choose to contact with customers and cooperators.
Why we choose online community instead of physical
community?
Since we are a
young design team with limited assets, on the online community, we don’t need a
physical place to contact each other so we save the operation cost to some
degree. Of the most importance, we can collect information and distribute
information quickly as one of the web’ advantage is the timeliness of
information. Also, through the virtual platform, people will be more willing to
express his true opinions, which solve the embarrassment of face-to-face
communication as well as the limitation of geography. For a physical community,
members are usually fixed. But we can gain more members and customers through
online community.
Why we choose virtual community instead of a portal?
A web portal is a
website that brings information together from diverse sources in a uniform way.
Usually, each information source gets its dedicated area on the page for
displaying information. Often, the user can configure which ones to display
(wikiepdia). However, this web type does not match our current situation. The
operation cost is relatively high on portal and the service time will be longer
compared to an independent virtual community, because there are too much
information, service and cooperate companied on one web portal ( e.g. Sina),
customers need to click many links to get our product information. In addition,
portal targeted is quite low which will give the unprofessional image for our
customers. They will get confused about what we are doing and how they can get
from the web. What we need to achieve the change is to give the clearly
knowledge that they can purchase fresh furniture, make comments and make
friends on our virtual community. Brand reputation is the primary issue we care
which cannot well build though portal.
Key requirements to build a true community via
Furniture online.com
Based on Kim’s
nine essential strategies for creating true community online, the following
requirements are the key steps we need to consider and clarify (Kim, 2000):
- Purpose: the back story and core values why we
make the web.
- Identity: we should show meaningful profiles to
tell customers we are professional and reliable on both sides.
- Roles: clarify the difference between newcomers
and members.
- Leadership: to establish the moderators, movers-
shakers.
- Etiquette: the ability to control bad behavior
both from the operation sides and customers.
- Events: the regular activities and engaging.
- Metric: tools not only to measure in terms of number
of fans and sales generated but also to know the value of the
conversations that occur around the brand, the feelings that users have
for the same and commitment has earned social media.
- Place: the discussion boards, whether it is easy
to use.
As what has been
discussed above, it’s not hard to conclude that our choice of taking advantages
of virtual community to turn our business on is a wise idea;
Quick review
Our design company
Tree decided to directly cooperate with a furniture manufacturing company named
LuckyHome,
who meets our needs and also hope to gain benefits from us; and we decided to
reach our goals via the virtual community---web.
Ambitious
To be more
specific, the goal of our company is to promote our “TREE” brand image and
win brand perception in furniture markets through cooperation. And
the LuckyHome Company can enrich their income channel through the
partnership with us rather than solely depending on those big furniture
companies who has a strong buying power. It seems like that two separate goals
are totally fine with each other’s exist. However, when the plan goes deeper,
conflicts revealed.
Conflict problem
According to
conflict theory, it was a process that begins when one party perceives that
another party has negatively affected, or it about to negatively affect,
something that the first party cares about.
For our
collaboration, process conflict came first. We had disagreement about
order processing. From our designing company’s perspective, we expect Luckyhome
immediately process any orders; that is to say, we need them to make every
piece of furniture as long as one customer ordered. It is because that we hope
to use our short production time as our competitive advantage to attract more
customers. However, on behalf of Luckyhome, this method is costly and goes
against effective management.
One more conflict
is the bottom line of monthly order web generated that Luckyhome agreed. As a
design company, we are responsible in the very beginning of sales on web
because customers at that time buy things based on design only. Even though we
could blame for Luckyhome if orders decreased because of poor quality, Tree
still needs to provide a number to protect Luckyhome from leaving us as the
collaboration doesn’t making money. We lowered the number as a limit of financial
support while Luckyhome denied for his own concern of assets maintenance in
cooperating with us. These two conflicts need to reach an agreement as soon as
possible or the whole collaboration plan will be impeded.
Negotiation
Negotiation is a
process in which two or more participants attempt to reach a joint decision on
matters of common in situations where they are in actual or potential
disagreement or conflict. (Donald G. Gifford). Research by Professor G. Richard
Shell from the prestigious Wharton School of Business, University of
Pennsylvania, identified 5 common negotiation
styles. It can be divided into the following stages:
preparation, information exchange, explicit bargaining, and commitment. First,
preparation, we need to prepare an effective negotiation strategy to make sure
we could react under pressure, when facing different situation and conditions.
So we decide to use collaborate style to negotiate with LuckyHome
company, it mean we would use win-win strategy to “make the cake
bigger”.
According to
theories guided above, we fairly reached agreement with Luckyhome of the two
conflicts. For the first conflict, instead of requiring Luckyhome to process
orders immediately, we both agree to make it a 3 days roll as bulk production
drags cost down which in turn, furniture could be cheaper to gain more
customers. Besides, 3 days isn’t too long or short and enough to accumulate a
number of orders. For the second conflict, we agreed with their requirement of
financial return in the beginning of each month; but Luckyhome compromised to
prolong our payback period if we couldn’t fulfill those numbers. We are allowed
to pay those possible checks in the end of the year.
Resolving those
conflicts, both companies were excited about the web function designing and the
name of the function came out already, www.furnitureonline.com.
WWW.FURNITUREONLINE.COM
Top
Ÿ About
us: company background including TREE and Lucky & Home company;
plus Furniture online introduction
Ÿ Q&A
area: our customer service department resolve furniture-related questions
uploaded by site members
Ÿ Punching
instruction: brief guideline to customer about punching procedure
Ÿ My
account: each customer needs to register an account with a permission of
getting access to more information they need
Ÿ New
Product: all new products which got manufacturing supported will be presented
over here
Ÿ Sales
online: last season furniture exhibited here and the price will be lower than
original ones
Left side
Ÿ Products
Catalogue: customers can easily reach what they want
Ÿ Votes
area: visitors and members are free to vote their preferred furniture designs
Ÿ Accessory
links: furniture-related accessory links enriched FURNITUREONLINE’s functions
and make visitors more convenient; what’s more, it’s a financial source for the
web itself.
Middle
Ÿ Announcement
board: attractive product pictures and news to keep visitors searching
Bottom
Ÿ Company
introduction: striking company logo to impress visitors of two company brands;
it includes designers and manufacture engineers personal introductions; Tree’s
awards and Luckyhome’s raw materials are exhibited.
Creative idea
Here is a creative idea came in our discussion and
it’s still a rudiment need to be further discussed. We plan to cooperate with
local government to redesign and repair resident’s old and broken furniture.
Then, this old and broken furniture can be reused; for the furniture that was
discarded, we sold them in a low price online. We deliver our environment
protection concerns to the public and it can increase the brand perception, and
locals also got benefit from this activity. In other words, we are carrying out
our social responsibilities in the meantime.
Competitive Advantage---You Say It, We Make It!
First, a market focused competitive advantage is a
necessity for a firm to be different from competition and reduce the risk of
new entries. As after 80’s is the mainstream of web users who have the
capabilities and needs to purchase furniture, they will be our perfect target
customers. Being distinctive is a kind of life style each after 80’s is
pursuing; a piece of customized sofa or closet would be a perfect
representative of their thoughts. Meanwhile, they also take prices into
consideration as they are in a period of wealth accumulation and suffer various
life pressures. Therefore, we will provide customers many choices ranging from
color, materials and personalized services (logo printing or extension
component) with a middle ranged market price as product modularity (John K.
Gershenson, G. Jagannath Prasad, 1997) (complicated components can be assembled
seamless based on customers’ requirement while Tree has to cooperate this
strategy with appropriate design) applied by Luckyhome decreased cost. There it
is our slogan---You Say It, We Make It!
Making Use of Web Functions to Enlarge Registered
Members
In addition to
that, how can we enlarge site members and maintain current members is vital to
the website’s lifeblood. To begin with, function access restriction on
FURNITUREONLINE easily stimulates visitor’s interest to become a member who can
receive more services and information. On the website, there are 3 basic models
open to visitor, including basic product information (price, size, material,
etc.), Tree’s 3D house design pictures and furniture news worldwide. Members
are open to Q & A, product comment, member’s community and 3D picture
services, etc. In this way, visitors with real purchasing needs will definitely
register as a member owe to those precious contents.
Solid Royal Members Nurturing Plan
Members may buy a piece of furniture on
FURNITUREONLINE but then they just disappeared. In order to prevent this from
happening, there are 3 methods we will apply in our website to continuously
driving them back to log in.
A.
Customer
Interaction
Interaction
activity is an inevitable tool used in this company-to-customer business model.
Without retail sales to answer various kinds of customers’ questions, Q&A
model is created to resolve this problem professionally. Both manufactures of
Luckyhome and designers of Tree will be available to see products related questions
such as furniture maintenance rose from members in 24 hours. Answers here will
be more trustworthy than contents from searching engines. Timely and
professional Q&A model is therefore enabling our website to always be
members’ first choice when they got problems.
B.
Members
Community
Furthermore, we
should fully develop virtual community functions which enable
customer-to-customer communication. In virtual community, members can not only
receive information provided from site providers but get access to other
members-generated compelling content which are more welcome and accountable to
them. Besides, “the feeling of being together and being a member of a group of
friends comes with the notions of being part of a group, spending time
together, companionship, socializing, and networking”(Catherine M. Ridings,
David Gefen, 2004). Therefore, online advertisement and outstanding link
designs are ways to draw members’ attention.
C.
Coupons
However, we can’t
only wait for members’ needs; we need to create their needs via incentives,
just like what ads do to customers. More comments or published articles earn
more credits for coupons. Regular competition participation, votes and comments
of products are basic ways for customers to earn coupons. Members who purchased
furniture will also be rewarded with a coupon. The key issue here is to design
attractive competition such as living room design competition (customers upload
their own living room pictures and designers and manufactures will judge the
design based on beauty, healthy and space saving and extra criteria) and
controversial votes (leather furniture is good or bad and hardwood furniture or
not).
Leveraged Business Values---Outlook
Every collaborated business needs a general outlook of
leveraged value as both stimulation and measurement to guide the future
progress. For Tree, we basically predicted values added in the following
aspects: cost leadership, brand perception, problem solving capabilities, focus
strategy. To be more specific, virtual working environment dispense with assets
renting cost; FURNITUREONLINE enables our designs directly emerge to customers;
More responsive than ever before as direct communication with end users;
Highlighted target customers with countable feedback from them afford us a perfect
product development environment.
Referees:
- Wellman, B, 1999. "Networks in the global
village: life in contemporary communities.”
- Chipuer, H. M., & Pretty, G. M. H., 1999. A
review of the Sense of Community Index: Current uses, factor structure,
reliability, and further development. Journal of Community Psychology,
27(6), 643-658.
- Kim, A.J., 2000. Community of practice design
guide. ICohere White Paper.
4. G.
Richard Shell. Bargaining Styles and Negotiation: The Thomas-Kilmann Conflict
Mode Instrument in Negotiation Training. Negotiation Journal. April, 2001:
155-174. Nonaka, Ikujiro (1991), "The knowledge creating company",
Harvard Business Review 69 (6 Nov-Dec): 96–104.
5. Gourlay,
Stephen (2003), "The SECI model of knowledge creation: some empirical
shortcomings", 4th European Conference on Knowledge Management, Oxford,
England, 18-19 Sep 2003
6. N.
Venkatraman - John C. Henderson (1998), “Real Strategies for Virtual
Organizing”, Sloan Management Review, P33-P48.
8. Andrew
Hargadon and Robert I. Sutton (2000), “Building innovation factory”, Harvard
business review, p157-p166.
9. John
K. Gershenson, G. Jagannath Prasad, 1997, MODULARITY IN PRODUCT DESIGN FOR
MANUFACTURABILITY
10. Catherine
M. Ridings, David Gefen, 2004, Virtual Community Attraction: Why People Hang
Out Online
