All the products are designed so it would be easy to transport and assemble. Perhaps the biggest opportunity that the company has is its cost leadership, which means a single-minded focus on cost at the expense of everything else.
Without such extensive customer knowledge and best practices to benefit from that knowledge, IKEA would be unable to outcompete its current competitors. The company was founded in and is known for its simple yet effective approach to retailing with the DIY or the Do It Yourself concept, which ensures that the company keeps costs to a minimum and passes on the value to the customers.
The products sold by IKEA are mostly ready to use and flat packed meaning that they can be assembled by the customers themselves. The company has been criticized many times for issues like poor treatment of employees, questionable advertising practices or lobbying government authorities.
The company has a presence in the online world as well and the total sales from its online and offline businesses are more than a Billion Dollars per year. IKEA is already drawing up plans to enter markets like China and India with a clear strategy of cost leadership, which it hopes, would yield benefits to the company.
With a point of departure in the streams of existing research on global sourcing and the internationalization process of firms through networks, a research question is proposed concerning supply network interactions as an influence in the global sourcing process.
Strengths The biggest strength that IKEA has is its clear vision, which is to add value to its customers irrespective of the market conditions. All the efforts of closely integrating supply chain results in lower costs and a competitive advantage.
The point to be noted here is that it is sometimes difficult to maintain quality in the context of increasing costs and the need to replicate standards across its locations worldwide.
Designers constantly introduce new design products that look stylish in the eyes of customers. The findings draw on 29 interviews in Sweden and China, ranging from interviews with the supply management function of IKEA to interviews with Swedish and Chinese suppliers and sub-suppliers.
The company also uses IWAY approach to closely integrate suppliers with its supply chain. The company is already successfully managing its food outlets, so this expansion opportunity would be well aligned with the current operations.
All of these factors are aligned with what customers want and need and which results in higher sales. There are great opportunities for IKEA to expand into Brazil, Mexico, Indonesia and Malaysia to increase its presence in these markets to sustain future growth.
Our study contributes to global sourcing research in indicating the importance of interaction amongst supply network actors, showing how the global sourcing strategy of one actor may significantly influence the sourcing strategies of other actors.
IKEA sources its materials close to suppliers to reduce transporting costs. These large retailers have similar specifics as IKEA, including low costs, well managed supply chain and huge market presence and can easily gain some market share from IKEA.
Conclusion IKEA is a well-known global trend and through its innovative business model and its focus on products, processes, and systems, it has managed to stay ahead of the competition in the furniture retailing business.
Previous article in issue. More than million customers visit IKEA stores every year. Another key strength of the company is its clear concept which translates into an array of products that can be assembled by the customers themselves leading to humungous cost reductions which are then passed on to the customers.
Constantly using innovations to drive costs down. With its obsessive focus on cost leadership, quality sometimes goes for a toss especially in the present context where the costs of many inputs and raw materials has gone up and which has impacted the profitability of the company.The report will first give a brief summary of the IKEA case study, followed by the strategies used in targeting the global customer segment, followed by the importance of their brand image along with the marketing implications with it, followed by the advantages and disadvantages of adopting a standardized versus an adapted strategy in IKEA’s.
Standardized marketing strategies in retailing? IKEA’s marketing strategies in Sweden, the UK and China More recent studies (Edvardsson and Enquist,Edvardsson et al., ) take a service management perspective, When analysing marketing strategies of individual firms there is a need to employ some form of classification of.
An interaction approach to global sourcing: A case study of IKEA The third and final stream of research pays particular attention to the organizational design and management of global sourcing, especially global sourcing strategy development (e.g., Through their experience and presence in China, IKEA had sourcing market knowledge we.
Strategic Management; SWOT Analysis of IKEA; The company has a presence in the online world as well and the total sales from its online and offline businesses are more than a Billion Dollars per year.
The key strategic driver of IKEA’s success is it’s no nonsense approach to retailing that has paid rich dividends for the company and its. IKEA Case Study 2 MANStrategic Management Table Of Contents Introduction 4 History 4 I/O model 6 The External Environment 6 The Industry Environment 7 The competitive environment 8 Value Chain 8 International Strategy 10 Strategic Choice 11 International Business Level Strategy 11 Multidomestic Strategy 11 Global Strategy 11.
IKEA SWOT analysis ; Strengths Weaknesses; Brand reputation and market presence. He's been using his knowledge on strategic management and swot analysis to analyze the businesses for the last 5 years.
His work is published in many publications, including three books.Download