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Supply market purchasing strategy--Zitan
Transcript of Supply market purchasing strategy--Zitan
Market strategy (Value of Zitan)
Normally 9 out of 10 Zitan Wood is with hollow inside.
There are 3 kinds of Zitan: Original Zitan wood, Zitan wood with hollow, Zitan wood without hollow.
The price is hugely different.
Price of Zitan wood in 2013 (from Chinese wood market organization)
It is rare to find antique furniture made from zitan, and because of its rarity when items do become available they usually fetch very high prices. (key success factor)
Only the imperial household was allowed to use Zitan in China from the 17th to the 19th century.
Collective value and investment:
Collecting zitan furniture has been an increasingly popular pursuit for furniture connoisseurs. (increasingly valuable)
- It is the test procedure for making compressive test cylinders.
o For standard test cylinder - is 6 inches in diameter by 12 inches high for aggregates up to 2 inches.
o For larger aggregates - the diameter should be at least three times the aggregates size and the height at least twice the diameter.
- The molds used are generally waxed cardboard or plastic.
• Fill the test cylinders with three equal layer rodded 28 times.
- Concrete of 1 – 3 inch slump - may be rodded or vibrated
- Concrete under 1 inch slump - must be vibrated
- Concrete over 3 inch slump - must be rodded
• Stuck of level and cover with glass or steel plate or damp burlap and allow setting for 24 hours.
• Move the cylinders to proper curing facilities where moist curing will take place for the required time.
The strengths of the cylinders are generally taken 7 to 28 days.
- Are being developed to allow earlier acquisition of strength information.
o 2-day break – have been cured in boiling water or in autogenous curing boxes
o 5-day break – have been cured under heat and pressure and a system that will chemically analyze concrete before placement for its potential strength
The compressive strength of the concrete is determined by loading cylinders to failure.
S = P/A ; S = compressive strength
P = load in lb A = area in sq in.
To test compressive strength of in-place of concrete, various destructive and nondestructive methods can be used:
o Coring with diamond – used to remove specimen for strength testing.
o Ultrasonic – nondestructive; by correlating density to strength
o Impact Hammer – measures the rebound of a spring-loaded plunger after hitting a smooth concrete surface.
http://english.forestry.gov.cn/web/article.do?cid=200911160914197647(China Forestry government)
http://english.forestry.gov.cn/web/article.do?action=readnew&id=201310230441269846(Canadian new trade mission)
http://www.iucn.org/about/union/secretariat/offices/asia/elg/elp/?6277/forest-governance-and-law-enforcement-findings-from-the-field (IUCN )
http://baike.baidu.com/link?url=7Le35WHvQjt4UAE_BaGQW-UseSlXe_Qaq5-dcFOWF-X-5Cxf0iBIMR29XpEcIXiCHsFOOcVuPhdm4MqOGD5pka (Greenpeace organization )
http://www.fao.org/forestry/trade/en/ (Food and Agriculture Organization of the United Nations---Forest products trade and marketing)
http://news.jc001.cn/13/1031/765296.html(new raw material)
http://news.jc001.cn/13/1018/762592.html (archaized furnitures)
http://news.jc001.cn/13/1019/762774.html (imported raw material price down)
http://news.jc001.cn/13/1220/776192.html (generetic technological conditions)
http://bj86866.1688.com/page/offerlist.htm?keywords=%D0%A1%D2%B6%D7%CF%CC%B4&priceStart=&priceEnd=&tradenumFilter=false&priceFilter=false&mixFilter=false&privateFilter=false&groupFilter=false&sortType=showcase&pageNum=2#search-bar(category of timber)
http://s.1688.com/company/-D0A1D2B6D7CFCCB4BCD2BEDF-1043670.html?button_click=top&pageSize=30&n=y(alibaba furniture company yellow page)
http://www.wood168.com/hqmain.htm(timber supply market in China)
Name : Zhejiang Dongyang
a. They want to cooperate with the forest controller and buy the raw material at a low price.
b. They want to set up company in main import harbor buying origin wood and sell them to secondary distributors.
Supply market purchasing strategy
----- Zitan Luxury Funiture Company
Barriers and opportunities
What is Zitan?
What is Zitan?
A member of rose wood family
2 quality grades: solid & hollow
Mainly used for furniture, artwares, accessories
€648,253 - €907,554
€40,000 - €60,000
But in the auction house...
open competition market.
Number of supplier:
always stay at a steady number because of the capacity. An increasing number of supplier in China because of the need from the furniture market. Suppliers are not independent and normally keep in a medium size( not under organization)
Although the zitan tree is not extinct, it is very slow growing and the growth is confined to India, Malaysia, islands in the Indian Ocean and few in southern China, Indochina and Vietnam.
The Zitan market is in the mature market on the life cycle curve.
The top suppliers now are mainly in India as the climate there is appropriate for the growth of Zitan Tree. The capacity is going to increase because of the new market of the tropical area in Africa but have a trend of decreasing because of extremely slow growth of its trees, all these factors make Zitan more rarity in the future.
The cost of preservation
It is easy to have expansion or shrinkage due to the humidity and other weather factors. (human resource, ware house, technology…)
The market segment share of Zitan product
The quality distribution in different segment
Name: Fujian Xianyou
About 500 factories
Price: Burma Tulipwood 40000~180000RMB/ton
Burma padauk 10000~15000RMB/ton
Accumulate stock of current zitan supplier / Acquire this company/ Corporate with another furniture company with relatively lower brand reputation but comparative advantage
Sign long-term contract with existing supplier / Build solid relationship with them / Develop assistance for them
Search and analyze potential new high-end timber supplier/ Invest on them
Analyze the trend of zitan market/ Promote other high-end timbers as adequate substitute to consumer
Quality and Price level
Purchasing competitor geographical distribution
New technologies / materials
Burma chickenwing wood
Cost and Trend (RMB)
Main import city of substitutes
The New Comer
5 has a turnover between 7,000,000 – 10,000,000 RMB
(800,000 – 1,250,000 euros),
3 has a turnover between 30,000,000 – 50,000,000RMB
(4,000,000 – 6,250,000 euros),
One has a turnover over 100,000,000RMB
High-end market trend analysis
Thank you for your questions
Inferior quality zitan
Superior quality zitan
General Trend Analysis
Accessibility/ Supply risk