Grech & Grech is among the major companies in the furniture industry based in the UK. Since Willian Grech and Donna Grech founded the company in 2007, it has specialized in the manufacture of tailor-made cabinets, architecturally fitted furniture, and joinery. The company’s culture is to merge exemplary design with impeccable joinery skill to develop distinctive furniture of exceptional quality. Grech & Grech’s is committed to quality and consumer satisfaction.

As of the year 2014, the home furnishing industry in Australia was worth $10.6 million AUD (Euromonitor International, 2015). Data from Euromonitor suggests that the furnishing industry will decrease in value by 0.1% by the year 2019. However, it is good to note that the decrease is very low meaning that the industry will still be worth over $ 10 million AUD by 2019. The demand for Grech & Grech products can be expected to increase in time.

DEMAND ANALYSIS

Demand is the quantity of goods that a customer is willing and able to buy at a given period at a given price. Several factors determine the quantity demanded. Grech & Grech is entering a new market that has existing players. This means that the company will have to consider factors such as competitors and location, which will ensure they maximize demand. Various factors determine the demand of a product. Demand for Grech & Grech products is determined by the price of related goods such as substitutes and complements, the income of the consumers, consumers’ tastes and preferences, Government policies and changes in the population.

Grech & Grech has to consider all the above factors when estimating the demand for their products. Some of their major competitors include the Comax, established in 1995 and has its headquarters in Brisbane, Anton Gerner founded in 1992 and based in Melbourne. Auld Design, which has over twenty years of experience in this industry (Auld design). Rust furniture with thirty years of experience. Australian furniture companies have collaborated with the Australian furniture association (AFA) in conducting networking activities to make the industry stronger. This will help Grech & Grech in networking and gaining market (Australian furniture association).

In the year 2015, the international business times reported that the housing market in Australia would fall in the year 2016 (Westgarth, 2015). An analysis of the major cities in Australia revealed that in the year 2015, prices of property increased by 16% in Sydney and is expected to grow by 4% this year. Melbourne expects to witness a growth of 5% as compared to 12% last year. Price water house Cooper (Bannister, 2015) ranked Sydney top in the Cities of Opportunity Report (Grech & Grech, 2013). It is the most populous conurbation with over 4.8 million people, have efficient infrastructure networks, and financial and technology hub. On the other hand, Melbourne is the fastest growing city in Australia. The two cities also have the highest population (IBIS World, 2015). Based on the reputation and growth patterns, Sydney and Melbourne are the potential locations for Grech & Grech to launch their company

BREAK-EVEN ANALYSIS

A break-even analysis helps the management determine the average price of a product, predict when a start-up will cover all its expenses, and start making profits.

The fixed cost is the cost that does not change in the day-to-day activities of the business. Such costs include insurance, rent, salaries, depreciation, property taxes, and interest expenses among others.  Variable costs are costs that change in the daily activities of the company. Variable costs include costs such as cost of raw materials. Al these categories of costs are present in Australia.

To break even in Australia, a company must ensure that the total costs and the revenue generated cancel each other out. Total costs here include the fixed and variable costs. The revenue generated will be determined by the quantity demanded. Variable costs on the other hand will be dictated by the quantity supplied. The breakeven point will be the point where the quantity supplied generates a cost equal to the revenue generated by the quantity demanded.

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