Topic making the business plan for exporting wooden furniture products to thejapanese market

NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATION PROGRAM *** FOREIGN TRADE PRACTICE Topic: Making the business plan for exporting wooden furniture products to the Japanese market GROUP Class: International Economics 62A Member: Doãn Khánh Linh : 11202112 Đinh Ngọc Huyền : 11201830 Trần Thu Phương : 11203241 Lê Thị Minh Hiền : 11201416 Hà Thái Thúy Nga : 11202699 Hanoi, 04/2023 TABLE OF CONTENT TABLE OF CONTENT I Introduce Company Company name: Woodie Company Introduction Products Operation Motto Distribution Channels Objective Expected export activities Contact Info II Market Research Export status of wooden furniture in Vietnam Analyze the characteristics of the Japanese market Reasons for choosing to export wooden furniture to the Japanese market 3.1 Japan is a market with large consumption of wooden furniture 3.2 Japan tends to increase imports of wooden furniture instead of domestic production 3.3 Japanese furniture-loving culture 3.4 The Japanese market receives industrial wood products from both small brands 3.5 Preferential import policy for wooden furniture exported from Vietnam to Japan Evaluating the size and potential of the wooden furniture market in Japan Japanese customer needs, preferences, and behavior Analyzing key competitors and market trends (including their strengths, weaknesses, and strategies) 6.1 Direct Competitor 6.2 Potential Rivals III Business Strategy The process of exporting goods Shipping methods 2.1 Shipping time for Industrial Furniture by sea from Vietnam to Japan 2.2 Shipping time for Industrial Furniture by air from Vietnam to Japan Financial Projections 3.1 Product price 3.2 Expected income distribution of the company's personnel 3.3 Wood products in the first months of 2023 3.4 Report of Woodie's business results in the first quarter of 2023 Risks and Mitigation This is a preview Do you want full access? 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Log in 4.1 Some of the risks that our company may face while exporting wooden furniture to Japan 4.2 To mitigate these risks, the company can take several steps such as Legal and Regulatory Considerations Marketing campaign 6.1 Product Strategy 6.1.1 Brand 6.1.2 Decisions Related to product quality 6.1.3 Product support services 6.2 Pricing Strategy 6.3 Distribution Strategy 6.4 Sales promotion strategy 6.4.1 Advertising Program 6.4.2 Promotions 6.4.3 Public Relations IV Setting campaign goals Profit rate The goal of the company's position I Introduce the company Company name: Woodie Company Introduction Woodie is a company established 15 years, specializing in providing wooden furniture products After researching the domestic and foreign markets, Woodie decided to export the company's products to the Japanese market With a team of experienced staff in the manufacturing field, we are committed to providing our customers with quality and unique products Products We specialize in manufacturing wooden furniture products such as tables and chairs, beds, cabinets, shelves, and decorations which are delicately crafted and have diverse design styles, from traditional to modern, suitable to the needs and tastes of Japanese customers Operation motto Product quality and customer satisfaction are our top priorities We are committed to using natural wood materials, protecting the environment, and ensuring the production process meets international standards Distribution Channels We use various distribution channels to reach Japanese customers, including ecommerce platforms, direct furniture stores, and exclusive agents Objective Woodie aims to become one of the leading companies in exporting wooden furniture to the Japanese market while creating quality and unique products that meet the needs of customers Expected export activities - Item: wooden furniture - Market: Japan - Time: Starting export procedures and preparing relevant documents from May 1, 2023 Contact Info Address: No 207 Giai Phong Street, Dong Tam Ward, Hai Ba Trung District, Hanoi, Vietnam Email: info@woodie.com Phone number: (+84) 123 456 789 Website: www.woodie.com We look forward to cooperating and developing with domestic and foreign partners, to bring quality wooden furniture products to Japanese customers II Market Research Export status of wooden furniture in Vietnam Vietnam's wooden furniture exports have been a significant part of the country's wood and wood products industry In recent years, Vietnam has become a major player in the global wooden furniture market, with exports increasing significantly However, the wood and furniture exports of Vietnam have been declining in recent months, with a 34.8% drop in January and February 2023 It is unclear what the specific export status of wooden furniture in Vietnam will be in 2023, but the Vietnamese government aims to increase the country's timber and wood product exports to $20 billion by 2025 Analyze the characteristics of the Japanese market - Japan is an island nation located in the east of Asia and is the third largest economy in the world, and a country with close ties in economic and security relations with Vietnam Japanese consumers have a high average income and tend to shop for high-quality and unique products They are willing to pay high prices for products that meet these requirements - Japan has a diverse industry with many different manufacturing sectors from automobiles, electronics, machinery, home appliances, and toys, to other industrial products Japanese industrial products are renowned for their high quality, advanced design, and durability - Consignments violating quality regulations will be destroyed or returned, and Japanese customs will increase the frequency and extent of goods inspection in the following times, which can cause many inconveniences and increase costs for exporters - Due to the high standard of living, most Japanese consumers place high demands on quality, durability, reliability, and convenience when shopping For the This is a preview Do you want full access? 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Log in Japanese market, the after-sales service must be good, when damaged, the problem needs to be quickly fixed; if the products have scratches or dents during transportation, Vietnamese businesses should remove them immediately and destroy them rather than lowering the price - The Japanese market is a very competitive market with the participation of many domestic and foreign companies Products must meet high-quality standards and be competitively priced to compete in this market The domestic and foreign companies competing in the wood market in Japan include companies such as Sumitomo Forestry, Nippon Paper Industries, Oji Holdings Corporation, Daiken Corporation, Kokuyo Furniture, Okamura Corporation, and many others These companies compete with each other in different sectors such as paper production, furniture manufacturing, and construction In addition, foreign companies also participate in the Japanese wood market such as IKEA - The Japanese market demands respect for culture and tradition Therefore, products and services must be designed and manufactured with respect and understanding of Japanese culture and traditions "Consumptive entry" is an indispensable principle when approaching any market Reasons for choosing to export wooden furniture to the Japanese market 3.1 Japan is a market with large consumption of wooden furniture - The potential for exporting wood and wood products, especially industrial wood furniture, to Japan, is huge because Japan is a large consumer market with a population of nearly 126 million people and a per capita income is about 43,000 USD/person - Wooden furniture is one of the Japanese items that increase in demand According to statistics from Japan Customs, Japan's wooden furniture imports in the first eight months of 2021 reached 540 thousand tons, worth 173.8 billion yen (equivalent to 1.55 billion USD), an increase of 9.7% in volume and 12.7% in value over the same period in 2020 Led by export turnover of living room furniture and dining room reached 91.98 million USD, up 6.9% over the same period in 2020; followed by wooden frame chairs with 81.3 million USD, up 7.2%; bedroom furniture reached 63.9 million USD, down 16.2% 3.2 Japan tends to increase imports of wooden furniture instead of domestic production - The current trend in the Japanese furniture market is to limit domestic production and increase imports, especially from ASEAN countries - In the structure of wooden furniture, Japan strongly increased imports of office furniture and kitchen furniture in the first eight months of 2021 Due to the increasing demand at home during the time of isolation, Japanese consumers tend to buy more office furniture products for home use and renovate the kitchen interior space - In addition, thanks to the need to prepare to repair and replace interior products in restaurants, hotels, etc., has increased sharply because Japan has just opened to tourism after Covid 3.3 Japanese furniture-loving culture - Japanese consumers prefer engineered wood products that are made to look like nature A coating on wood products that looks real, and close to nature is the choice of a group of Japanese consumers, different from the "real" wood in the past Making these "fake" products is also cost-effective for woodworking businesses - The Japanese also love to use wood materials to make furniture because this material gives them a feeling of being closer to the natural world The appearance of natural wood materials makes the space harmonious The wooden structure houses, wooden furniture, etc are the highlights of the Japanese house structure and make Japanese architecture unmistakable with the architectural styles of other countries - Besides, Japan is a country with frequent earthquakes, and the use of wooden materials to build houses is very safe, helping people easily cope with bad situations that may occur Therefore, the Japanese often prioritize wood materials for house foundations and furniture 3.4 The Japanese market receives industrial wood products from both small brands - The taste of buying wooden furniture of the Japanese is focused on convenience and suitability, rather than paying attention to brands like clothes and shoes This is an opportunity for a small brand to export this item to increase sales in Japan It is important to take advantage of this favorable opportunity to be flexible in design and to quickly grasp the needs of the Japanese market - Therefore, industrial wood products are made to resemble the nature of small brands As long as they have diverse designs and are responsive to needs, they will be able to penetrate the Japanese market 3.5 Preferential import policy for wooden furniture exported from Vietnam to Japan - Businesses can take advantage of commitments in Free Trade Agreements (FTAs) to which Vietnam and Japan are both members, such as the Vietnam - Japan Economic Partnership Agreement (VJEPA), the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - Under the VJEPA agreement, wooden furniture products are tax-exempt as soon as the agreement comes into force in 2009 \As for the implementation of the CPTPP, Vietnam's enterprises producing, processing, and trading in export wood products can enjoy reduced import tax on raw wood (from countries in the agreement) such as reducing the export tax on products and goods to the Japanese market Evaluating the size and potential of the wooden furniture market in Japan - The Japanese furniture market is predicted to expand rapidly during the forecast period Rapid disposable income, increased residential and commercial space, and rapid urbanization are some of the primary reasons boosting demand for furniture items in the country In 2019, the Japanese furniture business grew from a modest market of roughly 50 billion yen to nearly 3.5 trillion yen The popularity of high-end and luxury furniture is a key element of Japanese furniture consumption - The country is seeing increased construction activity, which has resulted in the growth of residential real estate and a large increase in the number of families This is increasing demand for furniture such as living room and bedroom furniture The country is also seeing an increase in demand for office furniture products as office space utilization rises, fuelling market demand Japan is also seeing an increase in demand for exquisite and long-lasting high-end solid wood furniture when starting a new family, which is fueling market expansion - In recent years, the market share of imported furniture in Japan has increased dramatically Wooden furniture accounts for the majority of imported furniture, followed by furniture accessories, metal furniture, plastic furniture, and so on China has become Japan's largest furniture importer, accounting for roughly 40% of total Japanese wooden furniture imports due to low labor costs Thailand, Vietnam, Malaysia, the Philippines, Indonesia, Germany, and Italy are some of Japan's other furniture importers - Japan has recently emerged as a prominent market for Vietnam's wooden furniture exports, with an expected value of $445.2 million in 2021 The Japanese market is well-known for its high high-quality standards, notably in design and technology Convenience and outstanding customer service are also important to Japanese consumers To be successful in the Japanese market, it is necessary to grasp the local culture, language, and business practices, as well as to adhere to legislation and certifications Conducting extensive market research and building strategic alliances with local businesses can also be advantageous Overall, with the increasing demand for wooden furniture in Japan, it represents a substantial potential market for 11 Chubu Centrair International Airport (Japan, IATA code: NGO) Tokoname Financial Projections 3.1 Product price We would like to note that the export price of our company's timber may change over time and various factors such as product size, wood type, durability, and customer market Here are some wooden furniture products exported to Japan and their reference prices: Products JPY/m2 USD/m2 Laminate flooring 30,000 to 90,000 220 to 670 Wooden windows 20,000 to 70,000 150 to 520 Bed 25,000 to 100,000 180 to 750 Tables and chairs 5,000 to 25,000 40 to 180 Wardrobe 15,000 to 50,000 110 to 370 Shoe cabinet 10,000 to 15,000 80 to 110 3.2 Expected income distribution of the company's personnel - The division of personnel in the business campaign for exporting wooden furniture to the Japanese market needs to be determined reasonably and effectively Below is a table describing some of the key positions in the company and the estimated costs of each position: Position Job description Estimated salary cost (per month) Chief Executive Officer has overall responsibility for the company's business operations, managing departments and staff 60 million VND Sales Manager manage the company's business activities, approach and find new customers, negotiate contracts with customers 40 million VND Business Consultant contacting customers, advising on the company's products and services, assisting in contract negotiations 20 million VND This is a preview Do you want full access? 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Log in 12 Head of Production Department manage production activities and product quality of the company 35 million VND Production staff perform the production, assembly, and quality control of products 10-15 million VND Transporter responsible for transporting products from the factory to the warehouse and customers 10-15 million VND - All costs above are estimates and are subject to change based on the salary and experience of each employee However, investing in the right and high-quality personnel will help the company achieve success in its business campaign 3.3 Wood products in the first months of 2023 Products 4/2023 (thousand USD) Versus 4/2022 (%) First months of 2022 (thousand USD) Versus Proportion in months the first (%) months of 2023 2023 2022 (%) Total 1.305.269 -3.1 9.716.722 1,1 100,0 100,0 Wood furniture 773.511 -18.5 6.264.147 -7,6 64,5 70,6 Living room and dining room furniture 242.773 -17,4 1.894.288 -9,1 19,5 21,7 Wooden frame chair 198.405 -33,6 1.872.740 -20,4 19,3 24,5 Bedroom furniture 173.165 -16,9 1.441.632 -0,5 14,8 15,1 Kitchen furniture 126.029 35,2 832.254 43,1 8,6 6,1 Office furniture 33.138 -28,1 223.233 -28,3 2,3 3,2 Woodchips 273.756 98,8 1.448.070 34,9 14,9 11,2 Wood, planks, and flooring 163.101 -5,3 1.249.509 16,2 12,9 11,2 Wooden door 6.208 111,9 33.988 53,4 0,3 0,2 Wooden art furniture 2.107 -26,4 18.496 18,9 0,2 0,2 Others 86.585 4,9 702.512 9,6 7,2 6,7 13 3.4 Report of Woodie's business results in the first quarter of 2023 Target Code Quarter in 2023 63,640,516,843 From 01/01/2023 to 31/03/2023 From 01/01/2022 to 31/03/2022 Sales revenue 01 Deductions 02 Net revenue from selling and providing services 10 63,035,260,015 63,035,260,015 108,175,117,705 108,175,117,705 Cost of goods sold 11 46,254,182,726 46,254,182,726 73,097,004,661 73,097,004,661 Gross profit from sales 20 16,781,077,289 16,781,077,289 35,078,113,044 35,078,113,044 Revenue from financial activities 21 2,342,541,197 2,342,541,197 4,479,891,646 4,479,891,646 Financial expenses 22 3,544,866.296 3,544,866.296 1,410,493,192 1,410,493,192 - In which: interest expenses 23 712,245,821 712,245,821 419,078,905 419,078,905 Cost of sales 24 3.724,762,170 3.724,762,170 4,645,127,993 4,645,127,993 Business administration expenses 25 2,471,204,069 2,471,204,069 7,724,713,653 7,724,713,653 10 Profit from business activities 30 9,382,785,951 9,382,785,951 25,777,669,852 25,777,669,852 11 Other income 31 45,089,166 45,089,166 49,123.285 49,123.285 12 Other expenses 32 2,671,794 2,671,794 383,516,358 383,516,358 13 Other Profit / (Loss) 40 42,417,372 42,417,372 (334,393,073) (334,393,073) 14 Total profit before tax 50 9,425,203,323 9,425,203,323 25,443,276,779 25,443,276,779 605,256,828 63,640,516,843 Quarter in 2022 605,256,828 108,339,632,622 108,339,632,622 164,514,917 164,514,917 14 15 Current corporate income tax 51 1,885,040.665 1,885,040.665 5,088,655,356 5,088,655,356 16 Deferred corporate income tax 52 - - - - 17 Profit after Profit tax 60 7,540,162,658 7,540,162,658 20,354,621,423 20,354,621,423 18 Earnings per share 70 357 357 1.066 1.066 Risks and Mitigation 4.1 Some of the risks that our company may face while exporting wooden furniture to Japan - Price fluctuations: Wood prices and currency prices can change suddenly, affecting the cost of the company's products - Trade policy: Changes in trade and tariff policies may affect the company's exports - Legal changes: Environmental and labor laws can change and affect a company's production and operating costs - Weather conditions: Severe weather conditions, such as heavy rain or snow, can cause problems in the delivery of goods or reduce product quality - Competition: Other companies in the same industry may have competitive strategies with lower prices or better product quality, affecting the company's sales 4.2 To mitigate these risks, the company can take several steps such as - Thoroughly research the cultural differences between Japan and your home country to better understand Japanese consumer behavior and preferences - Partner with experienced freight forwarders and logistics companies to ensure that the export process is carried out smoothly and efficiently - Conduct thorough product testing to ensure that the furniture meets Japanese safety and quality standards - Obtain necessary certifications and comply with Japanese regulations, including import/export taxes and duties, to avoid legal problems - Translate all relevant documents and labels into Japanese to avoid any This is a preview Do you want full access? 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Log in 15 language barriers - Establish strong relationships with Japanese distributors, retailers, or agents to facilitate market entry and establish a local presence Legal and Regulatory Considerations Some considerations to keep in mind may include: - Understanding and complying with Japanese customs laws and regulations related to the import and export of goods - Ensuring that the wooden furniture meets Japanese safety and quality standards - Obtaining relevant certifications and complying with regulations related to labeling, packaging, and documentation - Complying with Japanese import/export taxes and duties - Ensuring compliance with anti-corruption and anti-bribery laws in both your home country and Japan Companies should consult with legal experts with experience in Japanese regulations to ensure that all relevant legal and regulatory considerations are addressed By taking proactive steps to ensure compliance with regulations and tariffs, companies can avoid legal and financial risks that could damage their reputation, integrity, and financial performance Marketing campaign 6.1 Product strategy 6.1.1 Brand Products distributed with the company's furniture brand are positioned as midrange products For example: Regarding other products bearing the furniture label, they are divided into product groups as follows: Square mini folding table and chairs (540 x 405) Rectangular mini folding table and chairs (540 x 405) Round mini folding table and chairs (648 x 480) Non-folding tables and chairs, non-rectangular chairs (820 x 500) 16 Figure 1: Some samples of wooden furniture 6.1.2 Decisions Related to product quality - The company's products in each product group have their features and characteristics, but these products still ensure maximum quality and design that always meets the needs of creating the most comfort for users with beautiful designs that bring a unique style to customers - Products must ensure the elements of quality, design, and high applicability, contributing to the style of their owners, and creating brand value for the company - Each product is a utility package that the company wants to send to customers Therefore, the company's working philosophy is "service first, profit later", with this philosophy, every employee in the company must put customers first, and understand customers' wishes to best meet customer requirements 6.1.3 Product support services - The goal of the product support service is to increase the competitiveness of the product when the two manufacturers offer the same cards in both the first and second tiers Then it is the third layer - the added service that will determine which products are preferred by customers - For application management software products, the company regularly performs additional services such as: Advice on how to choose the right product package for your business through the direct form at the company or the hotline to connect directly with the technician via phone, skype, yahoo, or other social networking sites free of charge In addition, on the company's website, there are instructions on how to use some products for customers to refer to when needed 17 6.2 Pricing Strategy - The company's specific pricing policy is always linked to the current situation and forecast of market supply and demand and competes based on a comprehensive assessment of the entire market, segment markets, and target markets - Discount due to bulk purchase: This discount is available to customers who purchase a certain quantity of goods to encourage the Company's customers to buy in bulk Customers who buy in increased quantities will receive a large discount For items, when the quantity of furniture customer buys with the total bill accumulated in months over 50000 JPY will be upgraded to Silver Member, above 100000 JPY will become Gold Member, and above 50000 JPY will be upgraded to Diamond Membership Specifically, the preferential policy is as follows: Customer's birthday Holidays Silver Member Gift voucher for 30% off Discounts up to 30% Gold Member Gift voucher for 50% off Discounts up to 50% 25% off Diamond Member Offer a 75% discount voucher Offers up to 100% 30% discount% New product launch - The company's pricing policy can be claimed to be quite flexible and in line with the market 6.3 Distribution strategy - In business activities, the company implements the distribution strategy as the main activity that brings in revenue Realizing the importance of the distribution system in bringing products to consumers, the company constantly expands its distribution system - The company will have main distribution channels: + Direct distribution channel: Through the sales force, the sales staff at the company This is a distribution channel used by the company quite effectively (90%) The company's sales staff directly contact the customers With this channel, customers directly come to see the product or can indirectly call, or email to order, the product will be delivered to the customer as required The use of direct channels at the grassroots has many advantages, the control of the channel is easy and the members of the channel and branches are all members of the company, so they all have the same goal to strive for for the overall development of the company This is a huge This is a preview Do you want full access? 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Log in 18 advantage for the company that is difficult to achieve using other channels The conflict between channel members is reduced to a minimum + Indirect distribution channel through intermediary brokers, customers introduce themselves after they use These intermediaries often introduce and provide customers with information about prices, designs, etc Then, the company deducts a percentage of the commission on the product's cost - The company uses this distribution channel to help the company speed up the circulation of goods, ensuring the company's close communication in the distribution channel The company earns a high profit because the difference between the selling price and production cost is high After all, it reduces intermediaries’ costs - In addition, the Company will always ensure on-time delivery for customers, and the company always tries to reduce the order turnaround time to the minimum possible Reliable, safe, and convenient delivery will be a decisive factor in the establishment's success 6.4 Sales promotion strategy 6.4.1 Advertising program Includes advertising inside and outside the company The company always tries to create an image in the mind of customers such as The company's products will print the company's name and logo from the warranty stamp on the product to the employee's uniform, all kinds of paper All transaction sheets on the company have the company's logo, address, phone number, fax number, email and website, which is very convenient for contacting the company when customers have needs - Distribute flyers at the university, companies, and surrounding apartments (500 leaflets distributed in the first month, then consider whether to distribute more or not) - Hang advertising banners on the main roads - Marketing online through community websites such as Facebook, forums… According to the current trend, when customers want to learn about a product type, they often go to the internet to know more about the products, the company provides them to use Thanks to the websites that the company can provide to customers The most accurate product in terms of price… 6.4.2 Promotions To stimulate customers to use the product, the company will have very preferential promotion policies for customers: - Promotions on holidays This is a preview Do you want full access? 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Log in 19 - New year program 6.4.3 Public Relations The company will establish a team of collaborators to access specialized fairs and exhibitions that take place regularly in the city area and some surrounding areas No Fair Tet consumer goods Expected number of customers to reach 10000 people Vifa 2024 5000 people Through participating in fairs and exhibitions, the company can enhance brand recognition to customers and find more sources of new customers and new partners for the company IV Setting campaign goals Profit rate The profit rate our company wants to achieve in the wood furniture manufacturing and exporting industry is around 15-20% of the total product value, however, this is a variable number that depends on many factors such as production scale, operating costs, investment in product research and development, marketing strategy and product pricing Therefore, finding ways to optimize costs and increase profits will be an important thing for our company to be able to compete and develop sustainably in the market Some solutions can be applied in the future: - Sourcing cheaper materials and ensuring good quality: associate with local wood manufacturers or foreign partners to negotiate better prices and ensure a stable supply - Increase production productivity by optimizing production processes, while improving product quality This helps to reduce production costs and increase competitiveness in the market - Look for good shipping partners to reduce product shipping costs but still ensure service quality - Increase advertising effectiveness and reach potential customers through social media channels, advertise on websites specializing in furniture, and create attractive promotions to attract customers - Adjust product selling price to be reasonable as well as the balance between This is a preview Do you want full access? 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Log in 20 profit and competitiveness in the market - Optimize the company's financial management and operating costs to minimize operating costs, increase resource efficiency, and invest in product development - Research and develop new and breakthrough products to create added value and differentiate in the market, increase competitiveness, and increase profits The goal of the company's position - The goal of the company's position is to become the leading manufacturer in the industry, provide the best customer service, or become a famous brand with guaranteed product quality - This will help the company develop a trustworthy image and brand, attract customers and retain them in the long run A company's position can also affect product prices, the market's assessment of a company's value, and its ability to compete with industry peers