National Furniture is developing a product mix that will capitalize and focus on it’s core competencies.   As a newcomer to the market, it has considered other furniture materials such as plastic, steel, and glass but has rejected the possibility of diversifying this way.  

Some of the reasons include:

>  The expense necessary in initiating additional production facilities.

>  The increased demands this would place on it’s sales personnel.

>  The market in the tri-state area not being firm for alternative furniture designs.

>  Formidable competition in the alternative furniture materials market.

>  The much smaller margins than exist for wood products.

National Furniture will design distinctive products.  The basic design of the company’s products will be classical wood furniture.  It is this look which continues to sell in the tri-state area.  

It will have the advantage of being the only real wood furniture manufacturer for it’s market in that area.  Since it will also be small enough to avoid capturing the attention of national manufacturers, it’s product designs won' t be copied unless it tries to expand and market it’s products beyond the tri-state area.

The company will carefully avoid creating too many product designs in order to prevent cannibalization of it’s own products -- a real danger since it has committed itself to a single, limited category of furniture style.  It has essentially decided on two product lines; one based on cherry with a rich stain for a look of elegance, the other based on oak with a light stain for a classic look.  The two looks have almost the same design but are distinctive enough in appearance that they will not compete with each other.  Rather, they will offer the client a choice between styles that will help to sustain sales.