...Executive Summary Background IKEA, the world’s largest home furnishings retail chain, was founded in 1943 by a Swedish entrepreneur Ingvar Kamprad. IKEA offers standardized products worldwide that are Scandinavian in design worldwide. The unique idea of this famous brand is to offer the option of assembling products to customers. The design of the furniture is very modern and light as it is made of particleboard. The products are of contemporary design and function with the concept that is based on low price. High quality, convenience, affordability, consistency, functionality and good design are the essence of this world class home furnishing retailer. Challenges IKEA faced many challenges in terms of culture and business practices as well as socio-economic and political conditions in China. The biggest challenges were pricing, copycat producers and cheap labor cost for assembled furniture. Alternatives To make the price more affordable for Chinese consumers IKEA has developed manufacturing units in China and collects raw materials locally. Due to country specific environment IKEA chose franchising in China. Because of cheap labor cost of Chinese assembled furniture IKEA offers reasonable fee-based assembling services. IKEA has built its stores near public transportation lines inside cities since only 20% of customers own cars in Shanghai. Recommendations IKEA needs to find more local suppliers to keep price lower. To understand local culture and purchasing habit,...
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...Running Head: MID-TERM ESSAY: IKEA CASE STUDY 1 Mid-Term Essay: IKEA Case Study Emily Shinkle Indiana Wesleyan University Business, Analysis and Technology ADM-508 Rodney Swope July 29, 2012 Mid-Term Essay: IKEA Case Study All companies share three characteristics – goals, people, and structure (Robbins, Decenzo, & Coulter, 2011). IKEA, a global furniture company, exemplifies these characteristics in an excellent way. Mikael Ohisson (2011), President and CEO, says, “We’re a values-driven company on a never ending journey to be the leader in life at home”(www.ikea.com) Mikael and his team have proved this truly is their goal by setting a great example when it comes to other topics within business such as social responsibility, decision making, and strategic planning. IKEA is considered a multinational corporation (MNC), which simply means is a consumer had four homes in four different countries they could all be furnished from ceiling to floor in IKEA because this company sells their products in many different places (Robbins et al., 2011). The Swedish-based company currently has 287 stores in 26 countries and maintains 1,018 suppliers in 53 countries (www.ikea.com). The simple and inexpensive furnishings are popular in many different social and cultural settings, giving IKEA a well-rounded approach at business around the globe. It was not until 1994 that IKEA decided to expand to China. One reason for the expansion was because China...
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...abroad interms of institutional as well as cultural fit and success opportunities. Correspondingly, concepts like this also provide insightful information for explaining the location choices which organisations have already made. One such framework isthe so called Diamond Model introduced by Michael Porter in 1990. This essay triesto determine its advantages and disadvantages as a tool for the examination of firm‟s home and host location decisions by focusing on two major MNEs: ikea and audi..Porter ‟s Diamond Model(1990: 73) argues that “nation‟s competitiveness dependson the capacity of its industry to innovate and upgrade and therefore is determined by a nation‟s level of productivity. From an organisational perspective this means that national competitive advantage depends on the nation’s ability to provide a home base for companies to sustainably improve their products and services in terms of quality, features, technology and so to successfully compete in highly productive industries internationally. Audi, a German automobile company, is a part of the Volkswagen group which is one the leading automobile manufacturers and the largest car maker in Europe. Ikea, Swedish furnishing companies known worldwide operating in 42 countries, started during the 1940, offer a wide range of well designed furnishing products at low prices making it affordable for everyone. Porter’s diamond model focuses on the competitive advantage of nation which helps to understand the competitive...
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...Knowledge management embedded in social media – successful company and its innovations ABSTRACT The continuous market pressures and competitions pushes the organisation to be in the race of making innovations besides safeguarding the talent and information they own. The race for new products and services for the customers arises due to increasing awareness and exposure through social media. This essay focuses on studying the knowledge management jointly with social media leading to innovation. The essay seeks to examine the role of social media taking IKEA as the case of interest. It aims to further investigate how knowledge management through social media help a company in its innovations, product development and services. 1. INTRODUCTION. Knowledge management has become the buzzword in recent past in the industrial sector. Companies have become very focused on the knowledge assets that they own and the capabilities of their organisation or company and staff to utilize theses assets. Thus, knowledge can be called a resource which could be acquired, exploited and applied to achieve success and advantage for the company (Zack, 2003). However, companies that fail to manage the knowledge it has might surely be losing its capabilities, potential and brains (Denford, J. S., & Chan, Y. E., 2011). The benefits that knowledge management offers ranges from promotion and elevation of unequivocal knowledge to attain efficiency and innovation in various business practices (Durrant...
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...IKEA Case Study IKEA Case Study The founder of IKEA, Ingvar Kamprad, established the IKEA brand in Sweden when he was only 17 years old. It was 1943, and the IKEA brand started its enterprise journey by selling items such as seeds from Kamprad’s family’s farm and Christmas magazines. By 1948, the IKEA furniture line came to life. Kamprad’s concept was “good furniture could be priced so that the man with that flat wallet would make a place for it in his spending and could afford it” (Hill, 2013). Today, IKEA is one of the world’s largest furniture retailers. This essay will discuss the legal, cultural, and ethical challenges that confront IKEA; determine the various roles that the host governments played in IKEA’s business operation; and will summarize the strategic and operational challenges facing global managers illustrated in IKEA: “Furniture Retailer to the World.” Legal, Cultural, and Ethical Challenges IKEA faced obstacles with a culture of disjointed, established Swedish furniture retailers that sold an expensive line of furniture that was to be passed down in families as heirlooms. IKEA’s self-assembly, less expensive furniture concept led to ethical and legal implications for them. Kamprad was able to undercut prices of the established retail outlets by cutting retailers out of his process (Hill, 2013). Because Kamprad cut the retailers out, they countered by coercing furniture manufacturers to not make sales to IKEA...
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...IKEA CASE STUDY ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Abstract: The case discusses the global marketing strategies of Sweden based furniture retailer IKEA. It illustrates how IKEA built a global brand and its localization strategies in markets including the US and China. The case also details the relationship IKEA had...
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...Porter's Value Chain model help explain the source(s) of IKEA'S competitive advantage? Ikea is a Swedish global furniture retailer, established in 1943 by Ingvard Kampard. It is well known for it’s wide range of functional, uniquely designed, low-priced home furnishings that has 330 stores across 40 countries. With its annual turnover reaching 140billion USD many are wondering what the stores secret to success is. This report will take a strategic approach into analysing IKEA’s competitive advantage through Porter’s value chain model, which divides the actions of a firm into two categories: support activities that can assist businesses to become successful in the marketplace, in Ikea’s case these are Human Resource Management, firm infrastructure, procurement and technology development. The second category, which this essay will look closely at, are the primary activities such as inbound logistics, operations, and outbound logistics, marketing and sales and service. IKEA’s supply chain management has gone from decentralised to centralised planning of its network of suppliers, distribution centres (DCs), stores and forwarders. This has taken them from a fragmented management to a coordinated, centralised supply chain planning (Jonsson, Rudberg and Holmberg, 2013). With IKEA’s stakeholders demanding to know the origins of the supplier’s ethics towards their workers and the environment, IKEA are recognising that their supply chain must be sustainable, transparent and not opaque...
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...analyzing IKEA’s supply chain, adopted strategy, the internal and external environment. Second, we investigate into IKEA’s logistics operations. At the last part, we discuss the problems of business and logistics aspect IKEA faces, and give our advices to solve them. IKEA’s Supply Chain Analysis For the IKEA’s supply chain, it includes suppliers, manufacturers, retailers and customers. Firstly, IKEA has thousand amounts of suppliers provide raw materials and components for the manufacturing acticities globally. It also has cooperation with a number of suppliers as joint owners or financiers in Poland, Slovakia, Russia and China such as Konakovo factory (Russia) providing four different items for IKEA’s Moscow store, Priozersk factory (Russia) providing five different chair models, RPOFIm (Poland) providing three different types of office chairs etc. This can ensure the continuous flow of manufacturing services and maintain a better customers service to keep existing customers. Secondly, for the design and manufacturing parts, IKEA owns its whole of the design part and outsources a part of manufacturing process to other companies to produce. Swedwood is one of the outsourcing company to manufacture wooden furniture and components for IKEA to sell. Thirdly, IKEA cooperates with third parties...
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...1. Strategy adopted? http://www.oppapers.com/essays/The-Strategy-Adopted-By-Ikea/740556 1 Explain, in details, the strategy adopted by IKEA, and how it successfully did the positioning. *** At business level strategy Focus Strategies By implementing a cost leadership or differentiation strategy, IKEA choose to compete by exploiting their core competencies on an industry-wide basis and adopt a broad competitive scope. Alternatively, IKEA can choose to follow a focus strategy by seeking to use their core competencies to serve the needs of a particular customer group in an industry. In other words, IKEA focus on specific, smaller segments (or niches) of customers rather than across the entire market. Focused Business Level Strategies involve the same basic approaches as Broad Market Strategies. Focus strategies can be based either on cost leadership or differentiation. Focused Cost Leadership Strategy IKEA that compete by following cost leadership strategies to serve narrow market niches generally target the smallest buyers in an industry (those who purchase in such small quantities those industry-wide competitors cannot serve them at the same low cost). Global furniture retailer IKEA provide customers with “affordable solutions for better living” through use of the focused cost leadership strategy. The company offers home furnishings that combine good design, function, and quality with low prices. IKEA does this by offering low-cost, modular furniture (assembled...
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...communicate with the competitive landscape to obtain the above average return. Therefore, to build an effective strategy, there is a need for profoundly understanding the competitive environment and estimating correctly the resource of organisation. This essay will examine the role of strategy as a “bridge” in order to assist firms to reach their targets in the competitive landscape. Definition There are many ways to definite strategy, however, it can be found that almost of them accept that ‘Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage’. (Hitt, Ireland and Hoskinsson 2009). Organisational resources include skills of employees, finances, capital equipments, patents and talented managers (Hit, Ireland and Hoskinsson 2009). Organisation resource is defined as ‘an asset, competency, process, skill, or knowledge controlled by the corporation’ (Wheelen and Hunger 2002). Competitive landscape is more complex in the context of globalisation; however, the fundamental constituents of landscape are customers, suppliers and competitors. Method To prove the ‘bridge’ characteristic of strategy between organisation and competitive landscape, this essay will examine theories of establishing strategy. In each theory, the components to build a strategy are related to customers, competitors, suppliers, internal process. From those processes, we can recognize that a strategy may be considered as ‘product’...
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...Corporate and Ethical Social Responsibility Assignment Question: Is CSR just another form of PR for companies wishing to get an edge on their competitor? Discuss with primary reference to IKEA. Student Name: Pui Tung CHIU Submission Date: 3 April 2015 Introduction A business activity generates both positive and negative influence for both the corporate as well as the society. The growing expectations of social, environmental and legal responsibility gradually rise in the past decades for corporate. Organizations use corporate social responsibility (CSR) to set up activities in order to achieve and respond these expectations. Jamali and Mirshak (2007) state that CSR approach helps to attract global attention and acquire a new resonance in the worldwide economy. However, Frankental (2001) claims “Do CSR is a public relations (PR) invention?” and company focus on promoting itself, getting an edge on its revivals rather than being ethic to protect the environment or maintain human welfare. Therefore, in this essay, author is going to discuss about the different between CSR as well as PR. Moreover, it will apply an example of IKEA to examine the effectiveness of its CSR in supply chain and analyze CSR as a business strategy to maintain the sustainability of business, financial control and risk management. Afterwards, author will highlight the limitations of CSR policy and finally provide some recommendations to improve the CSR strategy for...
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...Marketing Audit Essay BA IMK XC 04/01/14 Marketing Audit Essay 2013-‐13-‐12 Gruppe 3 1 Marketing Audit Essay BA IMK XC 04/01/14 1.1 Introduction 1.1 Motivation In 2009 JYSK entered the Chinese market with an objective to open 500 stores within 5 years. However 4 years later the barriers have proven to be too strong and the company is considering giving up the entire expansion plan (Business.dk, 2013) describing the Chinese market as “the most difficult market in the world” (finans.tv2.dk, 2012). Based on this information it is interesting to examine the challenges JYSK faces and evaluate if they should consider giving up the expansion to China altogether. 1.2 Problem Statement How relevant would it be for JYSK to continue their entrance on the Chinese market? 2.1 Which macro and micro factors...
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...Case 41 IKEA : Building a Cult Global Brand IKEA is a state of mind that revolves around contemporary design, low prices, wacky promotions and an enthusiasm that few institutions in or out of business can muster. Perhaps more than any other company in the world, IKEA has become a curator of people’s lifestyles, if not their lives. At a time when consumers face so many choices for everything they buy, IKEA provides a one-stop sanctuary for coolness. It is a trusted safe zone that people can enter and immediately be part of a like-minded cost/design/environmentally sensitive global tribe. If the Swedish retailer has its way, you too will live in a BoKlok home and sleep in a Leksvik bed under a Brunskära quilt. Beds are named after Norwegian cities; bedding after flowers and plants. IKEA wants to supply the food in your fridge, it also sells the fridge, and the soap in your shower. The IKEA concept has plenty of room to run: the retailer accounts for just 5 to 10 per cent of the furniture market in each country in which it operates. It is, however, a global phenomenon. That is because IKEA is far more than a furniture merchant. It sells a lifestyle that consumers around the world embrace as a signal that they—ve arrived, that they have good taste and recognize value. ‘If it wasn’t for IKEA,’ writes British design magazine Icon, ‘most people would have no access to affordable contemporary design.’ The magazine even voted IKEA founder Ingvar Kamprad the most influential...
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...below, I declare that: I am the author of this assignment and that any assistance I received in its preparation is fully disclosed and acknowledged in this assignment I also certify that this assignment was prepared by me specifically for this course I certify that I have taken all reasonable precautions to make sure that my work has not been copied by other students I confirm that I have understood the College’s regulations on plagiarism I confirm that research resources are fully acknowledged Signature: Mounir TIZI Date: 26/01/2015 1 To be corrected by: Mr Deji Sotunde. By: Mr Mounir TIZI. 2 Abstract This paper focuses on highlighting some characteristics of the international home furnishing company, IKEA. Also, a discussion on the current operations of the company was carried out using different tools like porter’s value chain analysis and SWOT analysis. Additionally, in this...
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...Introduction Culture is not static, rather changeable or dynamic, depending on times, people influences etcetera, I would agree with Edward Burnett Tylor that traditions and/or customs are a part of the culture, not necessarily what should be defining the culture (Sir Edward Burnett Tylor, 2004) therefore it would perhaps more correct to look at the countries unique customs. In this essay I shall analyze what is considered to be the Swedish culture as clearer defined under Identifying and Explaining my Roots culture and get more in depth of the differences or even possible similarities of each nation, Sweden and Canada. I shall also try to show as to why internationally Swedes is associated with brand names such as IKEA and VOLVO and why it is that these household names are a part of the Swedish culture Throughout the analyze I shall get insight if there are any Swedish holidays I would like to see implemented in Canada, and/or is there any Canadian holidays I felt that I missed throughout my years in Sweden? Is there any group or maybe a special gathering for Swedish immigrants in Toronto? How has the years in Sweden affected my possibility to adapt in Canada? Am I required to assimilate by means of giving up my Swedish identity and culture in order to fit in? What is the lifestyle of, and how are people from Sweden adapting in Canada? What are the stereotypes Swedish people have of Canadians and vice versa, and is it founded? Is it necessary to assimilate or can one live...
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