MAN3503-Strategic Management IKEA Case Study Sharleen Suwaris-SUSND11 Sharleen Suwaris Executive Summary The following is an analysis of the IKEA case study found in the Strategic Management Text book. This analyses the strategies used by IKEA to gain competitive advantage in markets outside its original area. The report begins by providing a background into IKEA. It studies International Business Level Strategy and the three international corporate level strategies. The case study
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MANAGERIAL ECONOMICS Subject assignment’s: IKEA Model Professor: Terence Tse CONTENTS Abstract 3 Introduction 4 Part 1: Microeconomic analysis 5 I/ THE 5-FORCES APPLIED ON IKEA 5 1. Internal rivalry/competitors
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INTRODUCTION IKEA is a Swedish company registered in the Netherlands which was founded in Sweden in 1943 by Ingvar Kamprad, that designs and sells ready-to-assemble furniture (such as beds, chairs and desks), appliances and home accessories. Since its inception, the IKEA company Vision has been “To Create A Better Everyday Life for the People†by offering a wide range of well-designed, functional home furnishing at prices so low that as many people as possible can afford them because IKEA believes
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Historical Background: 3 IKEA Viaion and Mission: 3 Production Strategy: 4 Promotion strategy: 4 IKEA Expansion worldwide 5 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
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Case Study – IKEA 1. History (Explain) IKEA was founded in 1943 by 17-years old Ingvar Kamprad in Sweden. First two letters IK of IKEA were taken out of the founders name and last two letters EA symbolise the name of Kamprads parents farm ‚Elmtaryd’ and the village ‚Agunnaryd’ where the farm has been located. First the company sold various consume good such as pens, watches and wallets. In 1947 Kamprad started also selling furniture via distribution, especially to the poorer farmers in Sweden
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Background: IKEA was founded by Ingvar Kamprad who embedded his strongly held values and beliefs in IKEA’s culture. IKEA was created out of Kamprad’s family kitchen selling goods such as fountain pens, cigarette lighters and binders that later turned into a catalog business operations selling furniture. In developing IKEA’s furniture retailing business model, Kamprad was confronted with a cartel of furniture manufacturers that kept prices high by controlling the Swedish industry. This issue later
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IKEA was founded in 1943 by Ingvar Kampard and focuses on stylish but inexpensive Scandinavian furniture targeted at low to mid income families. In 1956, IKEA adopted the concept of self-assembly by opening a self-service open warehouse. Internationalisation began in 1973 and now IKEA is operational in 22 countries with 178 stores, having over 70,000 staff under employment. IKEA is able to maintain low-cost without sacrificing quality and offers great design to keep customers coming back. Instead
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List the various ways in which IKEA has managed its global environment over time. IKEA was founded by Ingvar Kamprad in 1943. Today IKEA is one of the largest furniture chains in the world with three hundred and fifteen stores operating in twenty seven countries. IKEA has managed its Global Environment in the three major ways which has contributed to its great success. These ways are as follows: 1. Ingvar Kamprad was able to identify the changing trend in consumer wants and adapted his products
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Krishna Burberry: Burberry moved manufacturing work overseas to China (offshoring). This involved the closure of their factory in Rhondda, causing 300 jobs to be lost in Rhondda. Consequently staff were crying when given the news and protests were held, causing the reputation and brand image to worsen in the short-term of Burberry as a result of making such an unethical move. This was a large concern as Burberry provided well-paid, quality employment, so the 300 job cuts in Rhondda meant a sad
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IKEA case study 1. Firm specific advantages IKEA has a variety of firm specific advantages since its business approach appeared to be very unique for the furniture industry. First, IKEA’s most important specific advantages were its good value for the money. IKEA used this advantage for its expansion plans all over the world. IKEA when they failed in the USA had to highlight this specific advantage to bail them out of the financial difficulty they had gotten into. Second, the most innovative decision
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