Competitive positioning strategies for Malaysian wooden furniture businesses
This research is concerned with the applications of strategic management concepts and practices by Malaysian wooden furniture businesses in managing linkages in the value web and formulating competitive positioning strategies. For the purpose of the study, interviews were held with managers of the selected Malaysian wooden furniture businesses, and their key distributors/retailers and suppliers.The finding of the study shows that the strategic group concept is an important tool for understanding strategy, competition and opportunities within an industry. In the study, the geographical dimensions and the product dimensions of the market are used as the strategic dimensions for forming strategic groups (at the business level) of the selected Malaysian wooden furniture businesses: SG I (businesses in the low end segment of the domestic market); SG2 (businesses in the medium segment of the domestic market); SG3 businesses in the low end segment of the international market); and SG4 (businesses in the medium segment of the international market).In terms of the management of linkages in the value web (in respect of selection criteria and channel relationships), the study demonstrates that it varies according to strategic groups. Specifically, greater variation is observed along the product dimensions than the geographical dimensions of the market. Meanwhile, it is observed that there are differences between the way businesses manage linkages in the downstream value web (with distributors/retailers) and upstream value web (with suppliers). As for the businesses' perceptions of competitors (in terms of the businesses' view about competition and categories of competitors considered), greater variation is observed along the product dimensions than the geographical dimensions of the market. However, most businesses (irrespective of their strategic group membership) appear to give low attention to competitors and to have no clear approach for organising competitor analysis.In the formulation of competitive positioning strategies, the study shows that the activities undertaken and approaches considered (in respect of defining markets determining the key factors for success, identifying sources of sustainable competitive advantage formulating competitive strategies and developing positioning themes) vary more along the product dimensions than the geographical dimensions of the market. Although the activities undertaken and approaches considered by members of SG4 are broader that those of other strategic groups, they are not fully adequate as certain factors in the external environment have not been explicitly considered. Hence, it is suggested that the rotating wheel framework. which is based on pull-factor and push-factor approaches, should be considered by Malaysian wooden furniture businesses for the formulation of competitive positioning strategies. The distinctive characteristics of the rotating wheel framework are: an integration of concepts from the strategic management and marketing disciplines; an integration ofthe competitive forces perspective and the resource-based view perspective within the field of strategic management; a broadened concept of environmental analysis, and a dynamic analysis ofthe competitive environment.As regards the measurement of businesses' competitive advantage. the study reveals that the added value concept offers not just an alternative, but an important measure of businesses' performance, particularly in terms of their ability to add value. Specifically, the study shows that the added value contribution of businesses varies according to strategic groups: members of SG4 add greater value to their inputs than those of members of SG3, who in turn add more value than those of members of SG 1. Finally, recommendations (in respect of management of linkages in the value web, formulation of competitive positioning strategies and measurement of businesses' performance) are made for the consideration of Malaysian wooden furniture businesses and the government.