Brook Furniture Competition
Now Viewing Brook Furniture's competition in: Consumer Product Rental
Call Preparation Questions
Customers, Marketing, Pricing, Competition
What are the company's customer demographics? - Household goods rentals customers generally are low- to middle-income workers; videos are rented by the general populace.
What advertising does the company do? - Large public companies advertise nationally using TV and radio; some companies sponsor sporting events.
Who is the company's primary competition? - Large chains operate in most consumer goods rental markets.
How does the company make pricing decisions? - Videos are generally discounted after their initial run; household goods may be discounted after a period or when models are introduced.
Competitive Landscape
Demand is driven by personal income and the timing and popularity of new movie releases. The profitability of individual companies depends on the right merchandise mix and inventory financing costs. Large companies have advantages in economies of scale in purchasing, distribution, and advertising. Small companies compete effectively by providing superior customer service and catering to local demographics. The industry is labor intensive: average revenue per worker for a typical company is less than $100,000.
Business Challenges
CRITICAL ISSUES
Dependence on Consumer Spending - Consumer spending on entertainment like video rentals is discretionary, and therefore driven by personal income. Personal income also drives spending on rental of consumer goods like furniture and appliances. During difficult economic times, many consumers eliminate or delay spending on these discretionary items.
Sensitivity to Interest Rates - Most rental companies finance inventory. Companies finance from local banks, furniture manufacturers, and leasing companies. Interest expense can be a significant cost item for rental companies, and changes in interest rates impact the rental prices customers are charged.
Industries Where Brook Furniture Competes
- Retail
- Home Furnishings & Housewares Retail(primary)
- Consumer Services
- Rent-To-Own
