Group Assignment: (General Electric) and Individual Paper: (Rooms To Go Furniture)

Rooms To Go Inc.

Justus Ilodi

University of Phoenix

STR/581

Professor Wynne

7/03/17

Rooms To Go, Inc.

An increasingly important factor in a firm’s success revolves around strategy. Strategy includes decision making between multiple alternatives and deal with the external environment, internal resources, capabilities and other core competencies of the organization. Possibly more important for an organization is business level strategy. Business level strategy integrates the different actions used by the organization to achieve a competitive advantage. Organizations can do this through the exploitation of core competencies within their product markets. Organizations must incorporate business level strategies to create a different and beneficial position from competitors. Rooms To Go, Inc. utilized business level strategies, corporate level strategies and global level strategies. Additionally, Rooms To Go, Inc. can incorporate differentiation strategies as a potential business level strategy.

Evaluation of Business Level Strategies

Rooms To Go, Inc. currently utilizes business level strategies in attempting to obtain a competitive advantage in the market. Rooms To Go, Inc. differentiates business level strategies to increase their competitive advantage in the market. Rooms To Go, Inc. uses differentiation through the use of packaged rooms and promised delivery in one week or less. Rooms To Go, Inc. offers something unique from the competition, which is packaged rooms. According to Encyclopedia.com (2006), “Rooms To Go could offer savings to those customers who chose to buy rooms in packages” (Encyclopedia.com). Rooms To Go, Inc. differentiated themselves by offering packaged rooms. Additionally, they laid out the store to be easily viewed from all angle. This included bright lighting, colors and complete rooms that were ready to buy.

Rooms To Go, Inc. offered a service that many furniture stores cannot simply provide, at home delivery in one week or less. They are able to provide furniture groupings at significant price discounts and, because of this, are able to provide the service. The Rooms To Go promise, “Rooms To Go promises customers the convenience of delivery within one week (typically), appealing to buyers who would rather not wait the many weeks or months it sometimes takes the competition to deliver” (Encyclopedia.com).

Corporate Level Strategies

Rooms To Go, Inc. is currently focused on growth and involved in a value-creating corporate level strategy. Room To Go, Inc. is maintaining growth and creating value through aggressive infrastructure expansion. The company will open 11 new stores in the near future; however, the main focus has been with distribution and infrastructure (Engel, 2015). Through massive infrastructure expansion, Rooms To Go, Inc. included two 300,000 square foot expansions in two distribution centers and additionally, they are considering another expansion in the Dallas area. The main purpose of the expansion is due to Rooms To Go, Inc’s. massive e-commerce growth.

Rooms To Go, Inc. other corporate level strategy involves building a brand. They are trying focus the store name as a brand itself. This is difficult because the store sells brands. Encyclopedia provides an example with Crate & Barrell. You do not know a single brand Crate & Barrel offers, but you know that you are buying from Crate & Barrel. This is the type of branding Rooms To Go, Inc. wants to associate themselves with (Encyclopedia).

Global Strategies

Rooms To Go, Inc. is a United States based furniture store. They mainly operate in the southern portion of the United States, Puerto Rico and delivers to 13 other foreign countries (Rooms To Go). The growing e-commerce business outlet for Room To Go, Inc. gives the company the potential to service more foreign countries. Rooms To Go, Inc. has not implemented strong global level strategies. They do not have any differentiating factors that set them aside from the competition in global markets. The global strategy Rooms To Go, Inc. revolves around a multinational strategy. They are not focused on a pure global strategy; however, they do delivery to international markets beyond the United States.

Recommend a Strategy

Rooms To Go, Inc. incorporates a well-rounded strategy when doing business; however, they would benefit from a cost leadership strategy with a low level of diversification and promoting exceptional customer service. Cost leadership level strategy deals with obtaining a competitive advantage by being the low-cost leader and operating with better margins than competitors. Additionally, being able decrease costs of value chain activities is important to position the company in a defensive strategy against competition. Rooms To Go, Inc. will be able to absorb supplier price increases and demands if they position themselves at cost leaders. Additionally, it can force suppliers to keep prices low. Another way Rooms To Go, Inc. can become a cost leader is through developing a proprietary interface of design through the promotion of their e-commerce business segment. Allowing customers to customize their rooms online in a real-life platform will allow Room To Go to differentiate themselves and increase the brand name.

Rooms To Go, Inc. will benefit from a low level of diversification from keeping revenues between 70% and 95% of a single business unit. Keeping revenues coming from the main product line will allow for Room To Go, Inc. to truly focus on their core products and values. Businesses who diversity too much tend to grow too quickly and diversify too much. Once this occurs, the business structure begins to fail.

A differentiating factor that Rooms To Go, Inc. can focus on is exceptional customer service. If they can be known as the furniture store that provides the best customer service, it will differentiate them from competition and create a competitive advantage within the market.

Strategy is an increasingly important factor when growing a business. More importantly, business level strategies need to be utilized to obtain a competitive advantage in the marketplace and keep one step ahead of the competition. Rooms To Go, Inc. utilizes many different business strategies to position the company to grow and succeed. However, there are more strategies they can implement to obtain their goals and create a larger competitive advantage as they move forward.

References

Engel, C. (2007, October 15). Kornblum name to strategy post at Rooms To Go . Retrieved July

3, 2017, from http://web.b.ebscohost.com.liucat.lib.liu.edu/bsi/pdfviewer/

?vid=15&sid=4203636d-3bc6-49d2-bcc3-4357298aaf3a%40sessionmgr120

Engel, C. (2015, August 25). Rooms To Go in growth mode. Retrieved July 03, 2017, from

http://www.furnituretoday.com/article/523025-rooms-go-growth-mode

Rooms To Go Improves the Shopper Experience by Integrating Google Analytics Premium.

(2014, July). Retrieved July 03, 2017, from https://www.thinkwithgoogle.com/marketing-resources/data-measurement/rooms-to-go-improves-the-shopper-experience/

Rooms to Go Inc. (2006). Retrieved July 03, 2017, from http://www.encyclopedia.com

books/politics-and-business-magazines/rooms-go-inc

Rooms To Go Inc. (1999). Retrieved July 03, 2017, from http://www.fundinguniverse.com/

company-histories/rooms-to-go-inc-history/