...Strengths * IKEA has maintained long-term partnerships with its suppliers. This ensures that the company has access to high-quality materials at reasonable prices. * IKEA has a global reach * IKEA provides designer furniture at lower costs. * IKEA enjoys economies of scale. * Highly focussed on quality. * IKEA’s flat packaging reduces costs and makes it easier for customers to transport * The company culture matches its external image of cost saving. * Strong in-store experience – unique, experiential, “modern theme parks”. Weakness * IKEA was trying to sell Scanvadian designs which were initially not accepted in U.S. * Lower level of customer service * Niche market * Too much emphasis on cost-saving. * Product and style selection is limited. Opportunities * International expansion: IKEA are moving from International to global status through the development of Asia and Eastern European models. * E-commerce: Will reduce pressure from stores to a certain degree and hence will improve service quality. * Traditional product for IKEA has been within value, low price high volume product however the movement into mid and higher price points with more stylish image opens up a new segment for IKEA. * The budget shopper market is growing, especially among college students and in metropolitan areas Threats * Within growing competitive retail markets mainstream retailers are beginning to mirror the model of low cost...
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...suppliers, and managing quality and prices with suppliers, to keep margins low. • Has a business model which is unique in its construction and execution with little direct competition on a like for like basis • Anticipated the needs and wants of customers due to its successful product designs which are modern and of good quality • Although the model promotes low prices it has been identified there is an associated low level of customer service. Customers were able to buy low cost furniture but had to assemble and collect the furniture from stores. • Standardization of products ignored the different tastes and preferences of the US market and the way they purchased furniture. • Despite being and international brand, majority of IKEA stores are based in Europe and the balance across North America, Asia and Australia OPPORTUNITIES THREATS • Movement from an international to global status through more expansions in North America and Asia and Australia • Adoption of a polycentric strategy for its products and operations to suit their local markets. • There is a need to work on customer service to ensure a complete shopping experience and ensure repeat business within the existing customer base. • Using more aggressive promotional campaigns not just word of mouth will gain more customers and will make the market more knowledgeable of its product offerings. • Within growing competitive retail markets, mainstream retailers might begin to mirror the model...
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...SWOT analysis Strengths * Strong global brand name * Offers a wide range of products which are cheap and affordable * Low cost * Fast delivery * Large network of suppliers – 2,300 suppliers in 67 countries * Good bargaining power with suppliers: the suppliers had long term contracts, received technical advice and leased equipment, and in return, IKEA gained exclusive contracts and low prices. This helped IKEA maintain its cost leadership position. * Synergy with suppliers: IKEA’s designers worked closely with the suppliers to build savings into products from the outset. * Large warehouses for storage * Furniture sold in parts for the customers to choose and assemble * Offers a strong in-store experience. The IKEA store had value-adding offers like free/large parking, free crèche and a café. It offered a complete shopping destination for the customers. * Financially viable: huge and vast warehouses; purchase of Stor, an imitator * IKEA has a flat management structure – 4 layers from the Chief Executive to the warehouse worker. This made decision making and product innovation process fast, contrary to a tall management structure. This is important, especially as the industry is a very competitive one. * The management minimized costs. Flamboyancy and waste were not encouraged - senior managers shared secretaries and travelled economy class. * The IKEA staff is involved in decision making. This is good corporate culture,...
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...COMPANY HISTORY IKEA was founded in 1943 by Ingvar Kamprad. Its first store was opened in 1958 in Almhult, Sweden and its flagship store opened in Stockholm in 1965. By 1965, IKEA was a well loved household name in the home of many Swedes. The company’s corporate slogan was “‘Low price with meaning’” (Moon, 2008, p. 24). Its main objective was to challenge the status quo by producing a good product at a low price with the development of innovative and cost-efficient methods. Beginning in 1969, IKEA began to expand its business into additional foreign markets starting with Denmark. IKEA continued to provide its consumers with quality products by utilizing “high-quality materials on the furniture surfaces that were visible and …lower-quality materials on surfaces that were low stress and less visible to the consumer” (Moon, 2008, p. 23). This idea was well received by its consumers and helped IKEA maintain a competitive advantage within the furniture industry. By 1984, IKEA had expanded into 16 different countries with over 167 stores (IKEA Timeline, 1999-2008). IKEA made its debut appearance onto U.S. soil in 1985 with its first store in Philadelphia, PA. From 1997 to 2001, IKEA’s revenue had doubled in the United States from $600 million to $1.27 billion. By 2002, the United States was IKEA’s third largest market and housed 14 of IKEA’s stores (Moon, 2008, p. 27). IKEA’s goal is to have 50 stores in operation in the United States by 2013. SWOT ANALYSIS Strengths...
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...SWOT Analysis Ikea. Strengths IKEA is certainly an environmentally friendly business with a keen focus upon sustainability. In years gone by the company had been accused of encouraging wastefulness since it made a very large numbers of furniture products at low prices. As part of an integrated public relations campaign - IKEA now focuses on sustainability and made it an underpinning principle of its business philosophy. In 2011 IKEA has the enviable record of recycling more than 85% of the packaging and other waste from its stores. Products and materials, suppliers, climate change and community involvement are the fundamental principles of IKEA's sustainability approach. For example, IKEA imposes very strict control measures on some of its suppliers, such as those based in the greater China region. IKEA likes satisfied customers. The business manages to score highly in customer satisfaction surveys. Many marketing research companies rank IKEA in their top 10 companies for customer satisfaction. They managed to enhance their brand association with such great results. Let's face it IKEA is probably the biggest furniture retail name in the world. This is a business with more than 10,000 products available on every continent. They offer low prices and products that offer good value. If you want hard wearing and long-lasting, you will pay more for it elsewhere. IKEA has positioned its business offering away from high-quality and high price, and also a way from low quality, low...
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...Case Study on IKEA Executive Summary The case study of IKEA has been read, analyzed; and the findings are presented in the report as required. The goal of the report was to analyze the case study of IKEA and then to present the findings as well as performing some tasks that are required in this report. Firstly, some terms that are closely associated with marketing has been described and analyzed. In addition to that, those terms are also discussed in relation with the case study. Brand, Business strategy, retail sector, price sensitive and franchisee are the terms that have been discussed in this report in the first section. In the second section, the required calculation for average number of customers of each sector and average spending of customers has been worked out. A new mission statement for IKEA has also been proposed there along with the justification for the mission statement. In the third section, the importance and nature of SWOT analysis has been discussed and elaborated. It is seen in the case study that IKEA performs a SWOT analysis that supports their process of building strategy. Moreover, the SWOT analysis of IKEA has also been performed and justified. In the fourth section, SMART objectives and some new marketing mix ideas for IKEA has been demonstrated. In the fifth Section, the concept of marketing model and minimizing the threats for IKEA has been included and demonstrated. Ultimately, the report contains what were required...
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...Success Factors of IKEA 1 The Key Success Factors of IKEA Advanced English Writing 2 Abstract Taking advantage of three mayor cost-cutting strategies, IKEA has been able to maximize its profit and to succeed internationally with its concept. The self-service and do-it-yourself approach to selling furniture is one of the critical success factors IKEA uses to save costs and increase profit margins. Furthermore, it has a complicated company structure, partially in order to avoid taxes, but also to allow for some flexible management decisions to be made, based on the international needs. The third key success factor that can be held responsible for IKEA’s international triumph is its production and ordering system. The company uses recycled materials and wood alternatives in its mass productions, attracting customers from all kinds of layers of society. IKEA Key success factors International franchise Success Factors of IKEA 3 Table of Contents 1. Table of Contents ..................................................................................... 3 2. Introduction .............................................................................................. 4 3. Discussion ................................................................................................ 4 3.1 The Self-Service Approach ............................................................. 4 3.2 Advantageous Tax Planning and Decentralized Management ........ 5 3...
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...The reason behind choosing the IKEA is because IKEA is one of the world’s most successful retailers. IKEA is a global furniture brand inspired by the egalitarian society of its Swedish heritage and appears to the public to be forever Swedish. It expands its retail stores all over the world including North American, European Middle East and Asian countries but also spreads a kind of its own a highly strong business culture and values with a strong Swedish image to other countries through the establishment of business there. History: IKEA was founded in 1943 in Sweden by Ingvar Kamprad. Kamprad was born in 1926 as the son of a farmer in Småland, a region in southern Sweden. At the age of five Ingvar Kamprad starts selling matches to his nearby neighbors and by the time he is seven, he expands to selling flower seeds, greeting cards, Christmas tree decorations, pencils and ball-point pens. In 1943, at the age of 17, Kamprad became an entrepreneur and created a commercial company called "IKEA." The word IKEA was an acronym of his name and “Ingvar Kamprad” and the address, the name of his farm and village: “Elmtaryd, Agunnaryd”. Company initially sold fish, vegetable seeds, and magazines to customers in his region. Then in 1950 IKEA added furniture and home furnishings to the product line. IKEA entered new markets around the globe in the 1980s. IKEA expands dramatically into new markets such as USA, Italy, France and the UK. Operating Environment: Ikea is the world's largest furniture...
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...Product and Brand Management Ikea Assignment 1 Is Ikea a successful global brand? Why has it been successful? Ikea is a very successful global brand, not because it has 226 stores in Europe, Asia, Australia and the United States with 410 million shoppers a year, not because other global brand like Wal-mart stumbled in Brazil, Germany and Japan but for Ikea’s unique cultural branding that merges the value and fashionable design to ensure the creation of an affordable contemporary household goods (not just the furniture with 5-10% sales in each country with Ikea stores) for the middle-class. This uniqueness of its corporate DNA is the main reason why the Ikea is so successful globally. The frugality of the founder of the Ikea with his desire to create “better life for many”, these two tenets are deeply embedded into Ikea’s corporate DNA. The frugality combining with the obsession with design forming a unique brand that became a global cult brand. As a global brand Ikea stands for 1) Unique household products with contemporary design, affordable prices that will inspire consumers 2) A gathering place the global tribes that are sensible in cost, design, and green environment. 3) Egalitarianism. The Ikea as a corporation is very flat, the executives performs first-line employees’ job in an “Anti-bureaucracy Week” 4) High Competitive. Constantly dropping the price (2-3% annually) to provide the best values for customers (consumers). What is the relationship between Ikea’s...
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...I. View Point II. Time Context In 1943, IKEA was established by Ingvar Kamprad. The company sold fish, Christmas magazines, and seeds from his family farm. In 1948, Kamprad added furniture to his product line. In 1949, IKEA published his first catalog distributed for free. In 1953, Kamprad could no longer use the milk truck to take goods to the train. As a solution in this problem, in the same year he bought an idle factory nearby Almhut and converted it into a warehouse. In 1956, IKEA developed a concept which is self-assembly furniture which later became an integral concept of IKEA. In 1957, IKEA started to exhibit and sell its products at home furnishing fairs in Sweden. In 1958, an expanded facility at the Almhut location became the first IKEA store. In early 1960, Polish-made goods were to be found on more than half of the IKEA catalog. In 1965, IKEA opened its first store in Stockholm, Sweden‘s capital. By 1973, IKEA became the largest furniture retailer in Scandinavia with nine stores. By the late 1980’s, IKEA met with considerable success, particularly in West Germany, where it had 15 stores. In 1985, IKEA opened its first United States store in Philadelphia. By the early 1990’s, the company found that things are not going well in America. Its European-style offerings did not always resonate with American consumers. To handle this situation, IKEA reemphasized design and started promoting the brand with a series of quirky hip advertisement aimed at younger...
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...as possible will be able to afford them. слайд 5 1） What are IKEA's firmspecific advantages? Countryspecific advantages? In China, IKEA has already gone beyond the corporeal concept of household goods, and become a fashion, life taste of live specimens. Many consumers like the decoration in their own homes before to take a look at the IKEA shopping, in the light of IKEA's design Style of dress to their small nest. IKEA’s products are, in fact, smooth, simple and practical follow-oriented features, the rational pursuit of the typical Nordic style, Ikea's design department well to combine art and the market, developed in line with the style of IKEA customers and meet the requirements of the product. In addition to the Chinese mainland IKEA prices somewhat on the high side, the other in the global market, IKEA has been low-cost high-quality image, that benefit from its economic procurement strategy. IKEA in the choice of suppliers for the product, as a whole to consider the lowest overall cost. Although the furniture in the assembly is nothing new, but Ikea is the first to put flat-packed into a mode of operation. It was one sudden inspiration of Ikea staff, he amputated legs of the table, so that not only can be loaded on the table Vehicles, but also reduces the possibility of damage, but also saves the cost of transport. In this way, IKEA has made a problem into a opportunity to create a flat-packed...
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...ANALYSIS OF IKEA ENTERING INTO INDIAN MARKET INTRODUCTION VISION: The IKEA’s vision globally is to create a better everyday life for the many. MISSION:- Ikea's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them (IKEA 1994). IKEA was founded in 1943 by Ingvar Kamprad and has turned into an international furniture retailer, which specializes in stylish but inexpensive Scandinavian designed furniture. IKEA is however owned by a foundation by the Kamprad family. Since 1943, Ikea has expanded its operations steadily in many countries. IKEA originally started by selling picture frames, wallets, pens, watches, table runners, jewelry, and nylon stockings etc. Furniture was first added in the year 1948 and IKEA started manufacturing its own furniture since 1955, providing furniture that could be self-assembled at relatively low cost. Since then, the name has been synonymous with self-assembled furniture. In August 2008 the IKEA group had 253 stores in 24 countries. IKEA sales reached 21.2 billion Euros in 2008 showing an increase of 7%. The biggest sales countries are Germany, USA, France, UK and Sweden. it has also opened its stores in India. Swedish company IKEA to invest $600 million in India. | | IKEA carries a range...
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...ABSTRACT Distribution logistic plays an important role in international companies or in Multinational Corporation. It is because most company preferred more competence in the complex and global market. Nowadays customers more concern about how long their ordered product reach to them rather than worrying how the company will deliver the products. As a consequence, time can be used as an indicator in distribution logistic. This research is conducted to explain the consequences of distribution logistic and the way IKEA will gain competitive advantage by utilizing it. We will identify the key elements in distribution logistics and find the competitive advantages of IKEA through analyzing the case study of IKEA and they are: speed, dependability and last but not least is flexibility. Keyword: IKEA, Distribution logistic, Competitive advantage. INTRODUCTION 1.1 BACKGROUND Logistics management is the governance of supply chain functions. Logistics management is important not solely to producing and assembly industries, that are goods-oriented, however conjointly to selling, transport and alternative distribution or service- oriented industries. Daskin (1985) defined logistics as “the design and operation of the physical, managerial and informational systems needed to allow goods to overcome time and space”. Another definition promulgated by the Council of Logistics Management Ballou (1992) is: the process of planning, implementing and controlling the efficient, cost-effective...
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...company is a specialty store but rather the breadth of their product offering. If a company could be considered an expert in a certain type of good, it is a specialty store. (www.educationportal.com) Company Introduction IKEA is one of the best private furniture based companies in the world which started in a small village of Agunnaryd in Sweden. A company which has the experience of working for more than 6 decades around the globe, which currently is operating in 40 countries around. IKEA is a company which has always focused itself towards creating a better future for the people by producing reliable furniture at a low cost. The basic concept of the company is based on southern Sweden which has thin soil and poor people and they use their hard work to survive. The genius behind the company made sure that all these values were transferred to the company and its core values were designed around the basic inherited values. IKEA is a privately-held, international home products retailer that sells flat pack furniture, accessories, and bathroom and kitchen items in their retail stores around the world. The company, which pioneered flat-pack design furniture at affordable prices, is now the world's largest furniture retailer. IKEA was founded in 1943 by 17-year-old Ingvar...
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...the university Name of the college Teacher’s name Date Names of the group Table of content: 1.0 ………………………………………………………….Introduction 2.0……………………………………………………… SWOT analysis 2.1 Strength 2.2 Opportunities 2.3 Weakness 2.4 Threats 3.0 ……………………………………………………………….Product 4.0 …………………………………Product/Market Expansion Grid 5.0 …………………………………………….Environmental Analysis 6.0 ………………………………………The New Development Plan 7.0 …………………………………………………………...Conclusion Introduction: IKEA was founded in 1943, by 17 year-old Ingvar Kamprad in Sweden, the company is named as an acronym comprising the initials of the founder’s name, the farm where he grew up (Elmtaryd), and his home parish (Agunnaryd, in Smaland, South Sweden) . From the heart of the Swedish mountains, the idea of IKEA developed in a way to establish a relationship between its customers and everyday living environment. After its success, the company has opened 253 stores in 24 countries in 2008. Today IKEA is the world’s largest home furniture retail shop; they have a different concept for shopping. While families are choosing their own home designed furniture, they could rest in one of IKEA’s restaurant that serves Swedish food, or just buy the groceries from the designated shop in IKEA. Their concept differs from the usual idea of shopping; it combined an affiliation between economy and environment, to have the most suitable prices matching the daily lives...
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