...Case analysis – IKEA Background IKEA was established by Ingvar Kamprad in Sweden in 1943, by now it has been becoming one of the world’s most well-known global brands. At the beginning, IKEA is the small grocery store until Ingvar started to provide stylish functional but low-priced furniture. At that time, his dream is to sell good furniture with low price so that most people can afford them, which was to become the whole IKEA’s corporate philosophy. In order to lower the assembling price, IKEA designed the self-assembly and flat-packed furniture. As the company growing swiftly, IKEA go down to its international expansion. It has made a set of adjustments to fit to the local market and cooperated with local suppliers to save the cost, until now IKEA has become the classic case in corporate management and internalization. Analysis - essential factors to succeed: The essential factors can be extracted as follows: 1. Low-priced strategy. “to provide the good furniture with low price so that most of the people can afford them”, this is the dream of a young boy in 1950’s, but has become the key feature of IKEA. At earlier time, furniture is very expensive, but the emersion of IKEA changed this situation, IKEA products are much less expensive than equivalent product from other store, there is no doubt that IKEA will be definitely acceptable in middle-class household and the sales began to take off. Low-priced strategy enables the IKEA to gain the majority part of the market...
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... Expansion into Europe: 5 Expansion into North America: 5 IKEA’s Marketing Mix 6 Price 6 Products 6 Promotion 6 Place 7 Environmental Analysis 7 Issue identification, discussion and strategic alternatives 8 Why IKEA wanted to penetrate the US market? 8 Issue identification, the problem IKEA faced in America? 8 What caused these problems? Mistakes that IKEA made while entering the US market: 9 How do some of the American customers perceived IKEA and its marketing strategies? 9 How can IKEA solve its problem? What are the strategic alternatives? 9 Recommendation 11 Alternative Implementation 11 Conclusion 12 Appendixes 12 Executive summary: IKEA is a Swedish company which specializes in manufacturing furniture and selling them throughout the world. It has got large retail stores located on the outskirts of the major cities. IKEA is well known for attracting customers who are looking for modern designs at good value. IKEA is a Swedish furniture chain that has drawn large opening crowds to its stores as it has pushed into Europe, Asia, and North America. It has built something of a cult following, especially among young and price-conscious consumers. But the expansion was not always smooth and easy, for example, in Germany, Canada and USA. Its operations are simply based on a franchise system in the world. In addition, IKEA’s products are well distinguished by blue and yellow labels which reflect...
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...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, the company should carry out extensive market research. To attract more middleclass consumer huge adaptation is necessary. Extensive training for the employees and better supply chain management will solve customer service and out-of-stock problems...
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...Jayson E. I. Problem Statement Given IKEA’s success in the global market, how can it ensure continued success in the business? II. Case Analysis What are IKEA's competitive priorities? Describe IKEA's process for developing a new product. Cost leadership and an exceptional supply chain management are IKEA’s major competitive advantage. With the principle of “low price with meaning” IKEA is able to incorporate cost minimization in every process of developing a product that are modern, functional and a true value for money. What are additional features of the IKEA concept that contribute to creating exceptional value for the customer? Aside from creating chic functional products at a low cost, IKEA is also keen to reducing negative impact of products in the health of its customers and the environment. Inbound and outbound logistics also contributes in making IKEA products affordable and available to its customers. What would be important criteria for selecting a site for an IKEA store? IKEA stores and distribution areas should be close to shipping, rail and truck routes to allow a faster delivery response time which also translates to lower logistics costs. A market study should also be done to align IKEA’s array of products with customer needs. Study may include information about the location, cultural background and market condition of target area. SWOT Analysis Strengths • Strong international brand recognition built upon a unique philosophy...
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...IKEA Executive Summary Founded in 1943 by entrepreneur Ingvar Kamprad, IKEA first began with sales of inexpensive products such as pens, watches, and jewelry. Soon after, IKEA started selling furniture and published a catalog in 1951. With its Scandinavian and contemporary style, IKEA's business model of furnishing simplicity and do it yourself furniture has taken the company from a catalog based company to a multimillion dollar company. The company has grown to over 253 outlet stores in 37 countries and making itself known as a global brand of do it yourself furnishings at a lower cost than most furniture retailers Marketing strategies IKEA’s success is based on principal marketing strategies that remain the same throughout the world, which include a catalogue that is printed in 52 editions in 27 languages and has a worldwide circulation of 200 million copies, and the use of the colors of the Swedish flag blue and yellow in the IKEA logo. This is combined with an emphasis on customer freedom and choice with regard to buying and taking home products, and low prices intended to create a “sale” mentality amongst customers. This aggressive price strategy coupled, with a wide product range catering for every potential lifestyle and life stage of a consumer, can best summarize the company’s recipe for success. The fact that IKEA targets all age groups and households makes it an attractive proposition to a wide spectrum of most countries’ consumers, especially amongst depressed...
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...Scandinavian style. The name IKEA comes from the first letters of IKEA’s founder Ingvar Kamprad and the names of the farm and village where he grew up Elmtaryd Agunnaryd. Although the soil was thin and poor in Ingvar’s village, people had the reputation for working hard making the most out of limited resources. Ingvar applied the lessons learned from his village to the home furnishing market. Nowadays, IKEA’s vision is “to create a better everyday life for the many people by offering a wide-range of well designed, functional home furnishing products at low prices so as many people as possible will be able to afford them”. IKEA had a turnover of 26 billion Euros in 2011 and is present in 35 countries with more than 300 stores. PROBLEM DEFINITION IKEA had faced only successes when expanded from Swedish market in other European countries. The first attempt was in 1973 in Switzerland, followed by Germany in 1974. Since then it expanded across much of Europe with very good results. The issue raised in this case is how a giant like IKEA with a success story all over Europe tries to enter vast markets like the one in USA. So, the problem is how to sustain the corporate culture and brand identity together with the existing cost structure when entering new big markets with the attitude of “feet first”. At the same time, make the next leap in creating customer value and create relationships between the corporate global brand and the local market level activities that is essential for a...
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...|Description of the Organization – good detail |20 | | | Opportunities for Global Expansion – great research |30 | | |Challenges to Global Expansion |30 | | |Expansion Options and Recommendations – team did a great job with the analysis and support |30 | | |APA citations & references page |15 | | |TOTAL |140 | | IKEA in India: An Opportunity for Success IKEA has become one of the most recognized and profitable home furnishing brands throughout the world. The name “IKEA” is representative of its Swedish beginnings. The “I” and the “K” stand for the initials of the company’s founder’s, Ingvar Kamprand, and the “E” and the “A,” respectively, stand for the first letter of the farm (Elmtaryd) and village...
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...Mohammed Hannan Miah Prepared By Group 7 073 003 030 073 004 030 072 105 530 073 016 030 072 779 030 Md. Tareq Rahman Shubro Barua Sanjana Mehnaz M Mazharul Arefeen Bhuiyan Sumayia Hassan Background of IKEA IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories. The company is the world's largest furniture retailer. 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 (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish. IKEA has 300 home furnishing superstores in 35 Countries and was visited by some 583 million shoppers. IKEA’s low priced elegantly designed merchandise displayed in large warehouse stores, generated sales of $21.2 billion in 2008, up from 4.4 billion in 1994. The fledgling company sold fish, charismas magazine, and seeds from his family farm. His first business had been selling matches, the enterprise Kamprad purchased them wholesale in 100 box lots and then resold individually at a higher mark up. Before long, Kamprad had added ballpoint pens to his list and was selling his products via mail order. In 1948, Kamprad added furniture to his product...
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...price in accordance with what competitor sells. In general, the largest 50 companies generate about 40 percent of revenue. In US, Douglas Design LLC would face competition from Hellman Chang, Pottery Barn, Sears, Minimalista, Conran, Cratel & Barrel, Ethan Allen etc. Globally the main competitors are IKEA and Walmart, which sell very low cost and good quality furniture. The competitors offer differentiation in terms of styles and functions. Conran has a low cost strategy; Cratel & Barrel offers higher priced furniture in a box; Ethan Allen targets a more exclusive market; Wal-Mart is classified as less stylish, general store must-have-items. IKEA has proved to be more successful in delivering both high quality at a less price to the customers reflecting on weak competitors. B) Brief Analysis of the Industry Environment: Porter’s Five Forces: It is a framework to analyze level of competition within an industry and business strategy development. It draws upon industrial organization...
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...is an acronym that consists of the initials of Ingvar Kamprad, Elmtaryd (the farm where he grew up), and Agunnaryd (his hometown in Southern Sweden). IKEA is currently the world's largest furniture retailer and arguably the most successful global retailer. Being one of the biggest global retailers, IKEA benefited a lot by the globalization of its business; IKEA’s target market is the global middle class who is looking for low-priced but attractively designed furniture and household items. The company started as a home-furniture retailer in Sweden over 60 years ago. Throughout the years with the use of effective globalization, “IKEA managed to increase its business revenue and profit by selling and making home-furniture in different countries all over the world, and it has over 300 retail stores in more than 30 countries”. Other than that, they sell roughly 10,000 different products, which attract customers from different places all over the world. The basic assumption behind IKEA's global strategy was “one-design-suits-all”. This case “IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor ” is about IKEA’s development from a backyard company to one of the world’s largest furniture retailers, which has to deal with the issues of child labor and how they should behave considering economical issues and the company’s policy. Business Manager Marianne Barner has to face tough decisions on How to effectively enforce their anti-child labor policies while keeping the...
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...ASSIGNMENT SUBMISSION FORM This sheet must be submitted with your assignment. Failure to complete, sign and submit this form will result in a mark of ‘0’ for the assignment. Student Name Mounir TIZI Student ID P1028079 Assessor Name Mr Deji Sotunde Course Title Module Name Date of Submission Systems and Operations Management. 27/01/2015 Plagiarism is presenting somebody else’s work as your own. It includes: copying information directly from the Web or books without referencing the material; submitting joint coursework as an individual effort; copying another student’s coursework; stealing coursework from another student and submitting it as your own work. Suspected plagiarism will be investigated and if found to have occurred will be dealt with according to the procedures set down by the College. Please see your student handbook for further details of what is / isn’t plagiarism. By submitting this form and signing 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...
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...stakeholders, the marketing strategy should be aligned to guarantee that the direction is established (Hooley et al, 2008). Companies that are market-driven display inventive skills in interpreting, collecting, and using information to guide their business and marketing strategies and to achieve competitive advantage (Cravens & Piercy, 2009). The following analysis will focus on Ikea’s target market, the effectiveness of their positioning strategy, and recommended for changes to their targeting and positioning strategy. Ikea Ikea is worldwide home furnishing store that specializes in ready to assemble furniture, home accessories, and appliances. Ingvar Kamprad founded Ikea in 1943, and opened his first store in in Almhult Sweden. Today Ikea operates two hundred twenty six stores globally and hosts four hundred and ten million shoppers a year. Ikea believes in hard work to produce products that meet quality standards at prices that are affordable. These standards are accomplished by building long term relationships with suppliers, investing in highly automated products, and producing in large volumes. Ikea’s vision goes beyond home furnishings, Ikea wants to create a better every day for all people who are impacted by their business (IKEA, 2013). Target Market A target market that is well-defined ensures the ability to create better targeted marketing messages designed to appeal to the company’s specific audience. The better a target audience is defined and...
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...objectives of this study in order to comprehend the matter in more depth as well as a succinct overview of the following chapters. 1.2 – BACKGROUND OF STUDY Human civilization is dependent upon signs and systems of signs, and the human sign is inseparable from the functioning-if indeed mentality is not to be identified with such functioning (Morris, 1938). A brand instead, is a promise of satisfaction. It is a sign as well nevertheless, a metaphor operating as an unwritten contract between a manufacturer and a consumer, a seller and a buyer, a performer and an audience, an environment and those who inhabit it, and event and those who experience it (Healey, 2008). Even so, too often companies think of the brand experience in silos: as an identity, logo, website, advertisement, and so on. To be successful, a brand had to be experienced whole – emotionally and tangibly – telling a consistent and engaging story at every tower point along the way (Astorino, 2011). A successful brand positively and clearly distinguishes a company’s products and services from those of its competitors. Statistics confirm that higher quality brands gain greater market share and profitability than their inferior competition (MacDonald, 2012). As the economy of late capitalism shifted from production to consumption, the economic expectation that were placed on architecture changed with it. Since the emphasis on architecture as a means of increasing production efficiency declined, increasing pressure was placed...
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...companies for a similar product within the category that you selected. The two promotional strategies that will be compared are from IKEA and Pottery Barn. IKEA is a Swedish company that sells a wide range of ready-to-assemble furniture, appliances, and home accessories. IKEA’s home furnishings are of good design and functionality offered at a price low enough to be affordable to most people (IKEA, 2014). Pottery Barn is a specialty upscale American-based home furnishing store that was acquired by Williams-Sonoma in 1986. Pottery Barn was built on the idea that home design should be exceptional in comfort, quality, style, and value (Pottery Barn, 2014). IKEA’s promotional strategy includes a mix of television advertising, sponsorship, newspaper and magazine advertising. The concept of “democratic design” is portrayed in all of these methods, especially in the iconic IKEA catalog. This design features three elements: form, functionality, and low price (IKEA, 2014). With respect to low price, IKEA customers play an important role by driving to the store, selecting the flat-packed product from warehouse, transporting the product home, and finishing by assembling the product themselves. Having the customer complete this labor is all what helps contribute to the low pricing commitment. IKEA has targeted young married couples and first time home owners by marketing a contemporary lifestyle of enthusiasm (Douglas & Craig, 2011). The image branding has become a household signal...
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...A Study on TANGS’ Marketing Strategies in Influencing Buyer Behaviour Theory to the Marketing of Place Introduction C.K. Tang Limited (TANGS) is one of Singapore’s icons of retail, providing consumers in Singapore with the necessities of modern life - from fashion and lifestyle goods, to home products and electrical appliances, through its department stores and boutique shops since 1932. From 1988 to 1995, the store created trendsetting initiatives in Singapore like the first in-store magazines, speciality stores within a store, and its own house brands. It also broke retail boundaries by introducing Tangs Studio – a niche upscale store during the decadent 1990s – to cater to a new breed of well-travelled upwardly mobile individuals or yuppies. Tangs also won several window and store display competitions organised by the Singapore Tourist Promotion Board and Singapore Retailer’s Association. TANGS has come to be regarded as a Singaporean shopping institution along the main shopping-belt of Orchard Road (The Business Times, 2012), along the lines of Harrods in London or Bloomingdales in New York. In late 2013, TANGS completed the internal façade of their 3-year transformation plan its flagship store on Orchard Road to keep up with the ever-changing consumer shopping habits of both locals and tourists like operating on Sundays and introducing marketing strategies to increase consumer choice. This report demonstrates the application of relevant behavioural...
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