Assignment task:
Davro Furniture Group own 42 of the 1500 factories that supply the retail sector. There are 300 retailers but the sector is dominated by 6 conglomerates, each having a central buying office and together accounting for over 80% of the value of furniture bought and sold. The timber used in furniture making must be sources through one of several agents but originates in forests that are owned by three main corporations in about equal market share. Furniture manufacturing is a low entry-barrier industry, but the premium large volume retailers tend to avoid ordering their supplies from the small 'mamma-and-pappa" factories that cannot guarantee design quality and sufficient capacity to produce large order quantities at low cost and deliver directly to their stores, which are spread across all the cities of Australia, instead preferring to work with the 80 or so manufacturers that are roughly the same size as a typical Davro member company. Explain with the aid of the Porter Five Forces Model how the Industry-relates external factors that are relevant to Davro Furniture Group can be assessed. Answer this question in about 400 words and include a diagram