An Assessment of the Status, Challenges and Strategic Directions of Wood Furniture Manufacturing Establishments and Stores in Betis, Guagua, Pampanga

Date

5-2024

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jeanette Angeline B. Madamba

Committee Member

Eliza C. Aquino, Mar B. Cruz, Juan Paulino S. Trespalacio Junior, Melodee Marciana E. De Castro

Abstract

By 2030, the Philippine furniture industry hopes to be the world's leading design innovator or hub for products created from sustainable materials, with thriving local and international markets and a competitive and motivated workforce. Currently, the country's furniture sector is forecast to generate US$801.60 million in sales, with an annual growth rate of 2.81%. Betis, Luzon's heartland of furniture manufacture and woodcarving, is still well-known for its superb craftsmanship.

The general objective of this study is to investigate the status, challenges, and strategic directions of the wood furniture industry. Specifically, this study intended to: (1) provide an overview of the global and Philippine wood furniture industry, considering the presence and performance of the wood furniture industry in Betis, Guagua, Pampanga, (2) determine the profiles of wood furniture entrepreneurs and owners and businesses, (3) explain the practices and strategies of the local wood furniture industry manufacturers in terms of marketing, operations, human resources, and finance aspects, (4) examine the challenges encountered in the local wood furniture industry, (5) evaluate strategic directions encountered in the local wood furniture industry, and (6) provide key stakeholders with suggestions and recommendations to improve the local wood furniture industry.

A mixed-methods approach was utilized, involving surveys and interviews with 48 furniture manufacturers and businesses, field observations, and both quantitative and qualitative data analysis. Tools such as SWOT, PESTLE, Michael Porter’s Five Forces, and VRIO Analysis were employed to comprehensively examine various industry facets, especially considering the impact of the COVID-19 pandemic.

Globally, the furniture industry's production value was USD 580 billion in 2019, with projected annual growth of 3.2% until 2026. The Asia Pacific region leads in production, primarily using wood as the raw material, which accounted for 60% of the market in 2019. Despite challenges like the COVID-19 pandemic, growth is expected to resume, driven by consumer trends and stimulus packages.

In the Philippines, the industry relies heavily on locally sourced materials like wood, rattan, and bamboo. In 2021, 804 establishments employed 25,542 workers, 8 generating PHP 38.5 billion in revenue. Challenges include high import costs and a reliance on imports due to low domestic production, with the pandemic exacerbating workforce shortages and supply chain issues.

The local industry in Betis anticipates growth driven by strategic marketing, operational improvements, and human resource development. Challenges include high material costs and competition from ASEAN markets, but opportunities arise from increased demand due to the pandemic. Strategies for growth include trade exhibitions, social media marketing, and skill development for workers.

The study examines the demographics, business profiles, and socio-demographic features of furniture-related businesses in Betis, Pampanga. The demographic and business profiles illustrate the distribution of respondents depending on the nature of operation and business longevity. The majority of the responders are wholesalers/retailers, showing a strong presence in the business.

Family influence appears as a crucialreason for entering the furniture sector across all categories, especially among retailers, highlighting the area's family business culture. Furthermore, experience is emphasized as important for distributors, while accessibility to roads is critical to their operations. The report also highlights sole proprietorship as the preferred form of ownership and the importance of medium-sized households in the furniture industry.

The product line in the wood furniture industry in Betis, Guagua, Pampanga includes solihiya (thin strands of rattan woven into sunburst designs) chairs as well as numerous hardwood furniture items to suit a wide variety of tastes. Marketing, which includes both digital platforms and conventional showroom experiences, helps to expand market reach and engage customers.

Despite the lack of medium and large enterprises, the industry survives on custom, made-to-order production processes that cater to a wide range of consumer demands. While most firms do not have regular suppliers, those that do profit from established connections to get raw materials. The production process is customer-centric, with designs suited to client preferences and industry trends tracked via online platforms and direct customer engagement.

The human resources part of the wood furniture sector in Betis, Guagua, Pampanga is investigated, emphasizing the wide range of job titles and duties within several operational domains such as retailer/wholesaler, distributor, and wholesaler operations. Employee recommendations are frequently used in the recruiting process, while formal training programs get little funding, indicating potential areas for growth in employee growth.

While wholesalers and retailers frequently begin businesses with medium capital investments, distributors have a more balanced capital distribution. Wholesalers show a significant distinction between high and low capital enterprises, whereas retailers typically start with little capital.

The wood carving business in Betis has shown resilience in the face of major challenges like the Mount Pinatubo eruption and the COVID-19 pandemic. However, the pandemic severely impacted raw material availability, supply chains, manufacturing, and sales. The industry relies on locally sourced materials, but inconsistent suppliers exacerbate issues, leading to higher costs and reduced competitiveness. Despite financial constraints limiting innovation, the sector continues to evolve towards modernism while preserving traditional craftsmanship.

The strategic directions for the wood furniture industry in Betis include digitization, product diversification, sustainability practices, skill development, market expansion, and customer relationship management. Embracing digital platforms for marketing and sales, diversifying product offerings, adopting eco-friendly practices, and investing in skill development are crucial for resilience and growth. Expanding market reach through strategic partnerships and enhancing customer relationships will ensure long-term success and profitability.

Language

English

LC Subject

Furniture industry and trade

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2024 M17 P36

Notes

Viewing access to electronic resources is restricted solely to UP Gmail accounts. Any access and share requests from external organizations and personal email accounts will be promptly declined.

Document Type

Thesis

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