Furninova
Background
Benny Nilsson and a collegue started Furninova in 1991. In 1994 Benny Nilsson became sole owner.
Interview at Furninova
We interviewed the owner of Furninova, Mr.Benny Nilsson.
Markets
The degree of internationalisation of the company is fairly high, namely 55 % of revenue abroad, and the degree of internationalisation of the market is high. Furninova has the main part of production in Poland, since production costs and labour cost are low. A small part of production is situated in Denmark, which is a strategic decision. Furninova acquired the facility in Denmark in 2003. Furninova started sales in Sweden, which still is the main market, and further on came sales in Denmark, Norway and Finland in 1995. The main factor to decide where Furninova should export is the contacts the company gets at trade fairs. One of the countries Fuminova had early export to was the United Arab Emirates. A Swedish agent, former employed by IKEA, set up stores and contacted Fuminova. Fuminova's strategy is to export to retailers that later sell Fuminova's products. Fuminova exports to Scandinavia, Iceland, the Netherlands, Great Britain, Germany, Austria, Dubai, Qatar, Kuwait, Jordanian and Saudi Arabia. Lately, Fuminova has noticed an increasing demand for the products in Norway, Germany and the Netherlands. In the late 1990s export to Ukraine, Estonia, Latvia and Lithuania started. These markets are still quite unstructured and do not really have any chain of stores within the furniture business.
Problems and Possibilities Connected to Market Entries
Fuminova adapts products to a certain amount, like fabrics, but the company always strives for a Nordic design. This company can transfer knowledge from the home market to distant markets. To find new customers Fuminova participates in trade fairs, among them, the second largest in Koln, where buyers from all over the world participate. According to Mr. Nilsson Fuminova's main competitive advantage is high flexibility when it comes to fabrics and leather. The company has a very strong brand name for retailers in the furniture industry, but it is rather unknown for customers. Mr. Nilsson also considers the low labour costs in Poland as an advantage. According to Mr. Nilsson Fuminova faces psychic distance to some extent. He states that most of the customers in the Arabian countries are Westerners and not Arabians so psychic distance is not a very big problem then. Since Fuminova works with persons with many different nationalities in administration, such as Englishmen, Americans and Pakistanis this evens out the psychic barriers. Although, Mr. Nilsson states that the language is the barrier for entering the French market. In order to keep transaction costs low Norwegian customers pay to a Norwegian organisation and German customers to a German organisation and so on. Mr. Nilsson states that Fuminova itself makes all product development.
Networks
Ideas for new products come from trade fairs, travels and a close co-operation with customers. When it comes to materials Fuminova has co-operation with the suppliers. In the small city of Bjarnum there are about ten furniture stores and Furninova has co-operation with some units within some of these companies when they are not directly competitive.
The next step for Furninova is to enter the British market and also Eastern Europe when the market there becomes better structured. He states that the American market is too tough and both currency and freight are obstacles. It is also hard to maintain control of transactions, over there.