Look at the mountains carefully...: the geographical expansion of the furniture business in encruzilhada

Liliane de Oliveira Guimarães, Dilson Campos de Oliveira, Camila Cristina de Paula Pereira and Sérgio Fernando Loureiro Rezende

RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), 2011, vol. 15, issue 2, 349-359

Abstract: The teaching case "Look at the mountains carefully...: the geographical expansion of the furniture business at a crossroads" describes the process of a network's set up and development as well as the mechanisms used to coordinate and control it. It also highlights the dilemma faced by the Móbile Group concerning expansion to new geographical markets. This dilemma emerged because the original network was supported by a business format underpinned by formal contracts developed by its associates during its lifetime. These mechanisms, in turn, reinforced the trust developed among them. As the possibility of the geographical expansion implies substantial changes in how the network operates, admission of new associates and new contracts, the dilemma of geographical expansion emerged. In this sense, the case begins by describing the process of the formation of the network, the first conjoint strategies and the benefits derived by its members. In the second section, one describes how the Móbile Group works by placing some emphasis on the formal contracts developed by the participants of the network. In the third and final section, the dilemma faced by the Móbile Group is highlighted by pointing out the pros and cons of geographical expansion.

Date: 2011
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