Gobal Recession and Indonesian Furniture Industry Survival Strategy

Global recession triggered by American economy has a wide impact on global economy. Developed countries whose economies are large depended on export suffered most of this incident since export demand is significantly reduced.

Indonesia is a country that does not rely much on export both goods and services. However, there are several industries which support this country in terms of international trade. One of them is furniture industry which is very well-known for worldwide quality of indoor and outdoor wooden furniture.

Global recession impacts on the decrease of export volume for Indonesian furniture industry significantly. Many manufacturers go bankrupt. This is a bitter situation faced by industry actors and Indonesian government as well. Many people loss their jobs and tax contributed to the country is significantly decrease.

World economy is an uncontrolled variable for the parties involved in this industry. This means that they can engineer the economy. All they can do is making adjustment to the economy in order to anticipate its impact on the furniture industry. This is called survival strategy.

The survival strategy can be done in several ways. The first method is by retaining quality since it is a golden rule leads to customer satisfaction that finally drive to financial return. However, the decrease of purchasing power demands lower price. If this situation is not handled properly, furniture manufacturers tend to reduce the quality as demanded price decreases. This is, of course, a confusing circumstance to face. In one side, reducing quality often hurts the sellers since the delivered products are broken when it comes to the front door if the customers. This means no satisfaction from buyers’ point of view. In another side, retaining quality and keeping the price constant in the same time may lead to a worse situation since most buyers want constant quality in lower price.

The second method is by reducing profit and maintaining quality as well. In this hard situation, profit reduction is considered as the most reasonable strategy. A constant supply with lower demand pushes the manufacturers to do such strategy.