Market and Entrepreneurial Orientation Strategies in the Wood Furniture Industry in Mexico

Introduction

The Wood Furniture Industry in Mexico currently has several structural deficiencies that have led it, to some extent, to a critical situation. The sector is characterized as uncompetitive and inefficient; however, the domestic market has aggressive international competition, mainly from Asia, Chile, and the United States. According to Chapela (2012), the main comparative disadvantages are the following: (1) more modern technology; (2) more modern transport and lower transportation costs; (3) substantial advances in the standardization of products on the market and (4) services supply associated with the product. These deficiencies make the competitive landscape more complicated for the industrialization and marketing of wood furniture in Mexico.

The furniture manufacturing industry is located in the secondary sector, within the following activity classification: Manufacture and repair of furniture, mainly wood, manufacture of parts and furniture parts (INEGI-DENUE, 2018). The manufacturing sector is divided into 21 industries, one of which corresponds to the manufacture of furniture. According to the National Statistical Directory of Economic Units (2018), its importance corresponds to 6.51% of the total industry, resulting in a national total of 34,526 economic units. This subsector is divided into four categories: (1) manufacture of furniture except for office and bookshelf; (2) manufacture of office furniture and bookshelf; (3) manufacture of window coverings and rods, and mattresses.

The local Mexican offer is characterized by a separation between the world of design and production at the industrial level. The vast majority of companies engaged in the manufacture of furniture in Mexico are located within the classification of small and medium-sized enterprises (SMEs) and direct their products primarily to the medium and low purchasing power segments. In contrast, companies that produce designer furniture in large volumes turn out to be a minority (Legua, 2015). It is considered an industry characterized by having many companies where family workshops and small manufacturers-owners prevail, intensive labor, little automation, and small-scale production. (Lozano and Trinidad, 2016).

Mexico's Economy Ministry (2017) notes that from 2013 to 2017, the total amount of direct investment to the Furniture Industry in Mexico channeled 140 million, United States is the principal investor with 51.7%, followed by the United Kingdom with 16.9%, Sweden with 16.1% and Canada with 8.8%. Furniture exports represent 7.4% of the total manufactured goods exported in Mexico (INEGI, 2018). According to the Bank of Mexico (2017), exports from the Furniture Industry have a degree of commercial importance for Mexico, of 0.4% of total trade.

The Furniture Industry in Mexico follows the guideline of value chains led by buyers. That is why the purchasing power of society plays a decisive role in purchasing behavior and the personalization of goods and services (Sahui, 2008). Regarding the consumption of wooden furniture in Mexico, with data from the National Survey of Household Expenses (INEGI, 2013), Mexican families allocated 4.5% of their annual expenses to the purchase of furniture and accessories, carpets, and other materials, raising the percentage for 2016 to 5.6%.

The marketing strategies most used by the Wood Furniture Industry in the Mexican national market are department stores. According to the National Association of Supermarket and Department Stores (ANTAD by its acronym in Spanish, 2019), the total sales of these stores were $326 000 MP. From the study carried out by Legua (2015) under the supervision of the Economic and Commercial Office of the Embassy of Spain in Mexico City, the authors can highlight based on the data provided in the study that the leading distribution channels in our country for this type of product, three stand out mainly: