Generating cash for growth
A MFI Furniture Group case study

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Page 1: Introduction

Successful organisations are able to compete in tough environments.

To do this, they need:

  • capable managers who are willing to face facts and make hard decisions
  • excellent resources, including flexible and enterprising employees
  • financial resources to support initiatives for change, growth and improvement.

This case study examines how in 1999 MFI, the leading furniture retailer in the UK, recognised the need to make key changes in order to develop a successful competitive strategy. In particular it focuses on how the organisation has managed its finances more effectively.

MFI is looking to move on from being 'a company that sells furniture' to 'a company that delights customers'. In the past, MFI's success was based around high quality products at affordable prices, with a reasonable level of service. However, in today's market place that is not enough: it does not differentiate MFI sufficiently from its competitors.

MFI sees its transformation as a journey with several milestones along the way. The first milestone was to establish a firm financial foundation on which to build a competitive strategy. The next was to create a fully integrated company that is focused on providing unparalleled customer service.

MFI specialises in furniture and fittings for kitchens, bedrooms, home offices, bathrooms and living/dining rooms. It is the market leader in the UK furniture market, which is worth £10bn a year.

MFI has worked with a range of top designers to create the furniture designs required to:

  • build competitive advantage
  • create a range of exciting customer focused designs
  • establish a totally new look for MFI's furniture stores to make them more attractive and appealing to the customer.

MFI's major brands includes:

  • Hygena - the UK's Number 1 kitchen brand
  • Schreiber - a premium furniture brand associated with leading craftmanship.

MFI holds 30of the new kitchens market and 24of the bedrooms market.

As well as being the market leader in the UK, MFI also has a strong presence in France with its leading brand Hygena Cuisines. Howden Joinery is another important part of MFI. It supplies kitchens to the building trade and is the first choice for small builders and contractors. Howden Joinery has recognised that its customer (the local builder) has different requirements to a member of the public buying through its retail store network i.e. the stock needs to be there to take away from Howden Joinery depots 'vs' delivery to customers' homes.

Recently MFI has introduced Howden Joinery in the USA on a pilot basis operating in the same way as the UK i.e. stock to take away.

MFI Furniture Group | Generating cash for growth