IKEA
Introduction
From early 1940’s IKEA has gone through the history of development from the woods of southern Sweden to a major experience in retails industry in over different parts of the world.The first furniture showroom was open in Almhult, Sweden, in 1953. The founder Ingvar Kamprad was born in a small village in Sweden, as a young boy Ingvar had ideas to develop a business. The key component of its success is finding the right manufacturer for the right product.
Some facts and figures about the company
The Firm specific advantages of IKEA is that when most of the other furniture industries were localized concentrating on the domestic market ,and the Swedish industry crowned themselves as the best in the industry and that is when IKEA entered into the global industry.
• Their products were shipped after un-assembling the parts in order to reduce the cost incurred in shipping. Its cost-effectiveness was used to target the market in US later.
• Another pioneering move was to include customers in the value chain for radically reducing the cost .They did the assembling themselves at home.
• Its expansion in various countries was due to its successful culture.
• It did not turn to be successful in USA because there they ran into a few culture clashes and the tastes of furniture was totally different. Moreover intense competition , Swedish law and Long period in shipment also made expansion into US difficult
SWOT Analysis
STRENGTH
• In the Global market place IKEA has a strong leadership position. It has a very successful marketing strategy.
• The competitive advantage of the company is its competitive prices.
• This cost effectiveness concept is taken into consideration from the beginni...
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...t the best products with competitive prices.
Since market and profit advantages are continuously eroding by time, company has to be innovative and should be continuously competitive.
Always products from countries with a very positive image tend to be evaluated favorably and also vice versa. All these risks should be taken into consideration while developing the strategy of entering the new market. In both these cases both the companies have a strong Brand name and this is a competitive advantage for both the companies while entering a new market but IKEA need to be more innovative and adaptable to the new market trends and develop and market designs accordingly. Same with Sony Rivalry and competition in this industry is very high and they need to be innovative and they need to improve their R&D in order to meets the consumers demand or attract their demand.
While the company is taking the leap into international store chains, the percentage of their inventory made outside the United States remains low.
"The Home Depot NYSE: HD, headquartered in Vinings, Georgia, is a home improvement retailer that aims for both the do-it-yourself consumer and the professional in home improvement and construction. It is the second largest retailer in the United States, behind Wal-Mart; and the third largest retailer in the world, behind Wal-Mart and French company Carrefour. The Home Depot operates about 1,900 stores across North America. The company operates stores in the United States (including the 50 states, Puerto Rico, the United States Virgin Islands), Canada, and Mexico. The Home Depot also operates EXPO Design Center stores in select U.S. markets, providing high-end home design products and services. Its 2004 sales totaled US $73.1 billion. It was ranked #13 on FORTUNE magazine's FORTUNE 500 The Home Depot also owns a chain of higher-end home decorating and appliance stores. The Home Depot employs over 325,000 people."
The management of cross-cultural is another challenge, which have to face during the develop entering into market process. According to (Dong and Liu, 2010, p. 233) mentioned that “Cultural distance between the home and host country can have significant influence on selection, training and performance management system.” When IKEA develop the Chinese market, it affected by different culture background as well. As the case mentioned (China teaches IKEA limits of homogeneity, 2009) that, in other countries, IKEA stores are far away to the city with a lower rental and larger place for the consumers. However, in China, IKEA sets their stores close to the city, where are easier able to arrive by public transportation. Because of the different consumption habits, Chinese customers prefer to choose the methods of home delivery to shop. Furthermore, owing to lacking of DIY (do it yourself) culture, the consumers have a highly demand on the workers of furniture packaging. From the HR managers’ perspective, this home assembled services are more common used in China, thus, they need to adjust the recruitment plan to hire more assembled furniture workers. Meanwhile, it can be acknowledged that “scientific evidence indicates that certain human resource (HR) practices are positively related to organizational performance.” (COMBS et al., 2006) For example, in China, IKEA HR managers
Innovation has rapidly assumed a position of prominence in world competition on a global scale. To compete in this environment, organizations need a level of innovation. As competition becomes more global and time-based, organizations must develop and deliver new and superior products or services in less time. The challenge for modern organizations is to revitalize them so they can successfully and continuously develop newer products and enhance business development.
Ingvar Feodor Kamprad, as we know him the owner the giant home furnishing retail chain IKEA was born in march 30, 1926 on a farm which called near a small village of Agunnaryd, Smaland Sweden. In his teen ages he used to peddled matches, fish, pens, Christmas cards and other items by bicycle as a teenager. He bought matches in bulk from Stockholm and sold them in his town with reasonable prices but he still could make good money.
1. What were the sources of IKEA’s successful entry in furniture retail business in Sweden?
and will work their best to achieve them. With this management style, IKEA can use various methods of communications (see E5). However this type of management style could make decision-making slow and is not appropriate to some businesses such as, manufacturing industries. The organisational structure, culture and the management style of IKEA have to perform successfully so that, together they can achieve the company’s objectives. For example, to increase profitability: the communication within the organisation have to be clear so that, staff can understand what jobs have to be carried out; staff have to be motivated to perform the job; the relationship between managers and staff have to be strong and committing; the organisation have to encourage staff to create new ideas and share them amongst others; democratic managers have to listen and act on the opinions of workforce, democratic managers have to make sure that the workforce is well aware of the objectives of IKEA, etc.
ForIn the past couple of years, IKEA has been deeply involved with the issues of the environment. In the article, “IKEA’s
DataMonitor, 2007. IKEA major retail competition in the US are: Furniture Brands International Inc., Office Depot Inc., Sauder Woodworking Co., Stanley Furniture Company, Inc., and Staples , Inc. This paper will identify the key macroeconomic variables that affect IKEA and the retail industry as a whole. To better understand the effects of such variables upon the industry, two specific variables will be developed further.
The world is developing every day and we continue to discover new and innovative ways to better our quality of life. A trend that everyone seems to be focused on is saving the environment, which is also known as sustainable living. Not only does this apply to our lifestyle and environment, but it also translates into design. Sustainable living is becoming more popular around the world and is a lifestyle using skillful and sensitive design. It eliminates negative environmental impact and requires renewable resources. We each have decided to research different furniture companies to broaden our knowledge of the innovative practices used in each company. Throughout our paper we will introduce each of our companies and the products and practices they use to produce sustainable furniture. Our research will show that sustainable furniture design is beneficial to consumers by allowing them to live a more environmentally friendly lifestyle as their manufacturers develop innovative ways to make renewable furniture.
Another example of IKEA’s international strategy in building good relationships with suppliers is in Asia, especially in Vietnam, where IKEA expanded its own supply base. Vietnam manufacturers offers low cost labor force and not expensive raw materials, while IKEA provides the view of creating a long-term, high-volume business relationship, and advice on finding the best according to the price raw materials, setting up and bulding factories, choosing what machines, equipments
In Domestic, RBA understanding their competitors and their marketing mix, but internationally, RBA have to put more efforts and strategies on competing with other international
Firstly, the history of IKEA International A/S is needed to be described. The company is based in Denmark. It is one of the world’s top retailers of furniture, home furnishings and housewares. The company designs its own items and their items are sold in more than 140 IKEA stores. The store is spread throughout approximately 30 different countries worldwide. IKEA distributes its thick catalogs once a year in the areas surrounding its store locations. Also, it peddles its merchandise through mail order. Additionally, the company offers high-quality items at low prices as their character. Then, the company buys items in bulk, ships and store items to save money for itself and its customers.
E-commerce is available on Ikea’s website to selected countries, and they provide an e-mail address to customers who have queries about their business.
IKEA is more than a furniture store they are a company driven by values (IKEA, 2014). The company seeks to make their consumers lives easier by providing them with modern, innovative, inexpensive products which they use to tackle daily home activities. IKEA Group has 298 stores in 26 different countries (IKEA, 2014). The company’s vision is “to create a better everyday life for the many people” (IKEA, 2014, para 1). Using innovative techniques for creating, producing, and marketing their products IKEA can provide consumers with durable products for reason...