This website uses cookies to ensure you have the best experience. Learn more

Ikea Case Essay

688 words - 3 pages

IKEA’s competitive advantage is its unique designs of products. Products are designed to reflect the clean Swedish lines. These designs although may appear simple, but are IKEA’s trademarks. They are hard to imitate, and they are unique to the company. IKEA tries to differentiate its product from competitors’ by offering unique designs and high qualities, but at a lower price. Its designs are not everybody’s favor, but IKEA has been successful to identify and target a segment of the market who are interested in its designs.

One of the company’s strengths is its strategy to design a product, after surveying the market and finding the right suppliers. That enables the company to know in advance at what price point it is going to release a product, how much margin the company should have and forecast a cost. Therefore when the company is looking for suppliers, it knows about the type of suppliers, and where it should be looking for. That is one of the strengths that gives IKEA ...view middle of the document...

The other weakness is the company’s resistance to become a public company. Their ration is that the stock market imposes short-term pressures on IKEA and would not be good. IKEA thinks that stock market prevents the company from taking bold decisions. A public company has access to more capital, and its existence is more guaranteed comparing to a company that is being held private. To solve its existence dilemma, IKEA has implemented an unusual corporate structure. The effectiveness of such an unusual approach is not clear. Although the founder of IKEA has resigned from day-to-day control of the company, but he is still working as a consultant to IKEA. The leadership and future advancement of the company could be in jeopardy.

IKEA’s strategy is to lower the cost. The company’s attempt to establish priorities for product lineup, and survey the competition to set a price point that is 30% to 50% below that of rivals, and eventually find the right suppliers who can provide medium to high quality material at a lower price, indicates that the company has a strategy to increase its margin by lowering the cost.
It appears that IKEA devotes a considerable amount of time to research and development. It researches the market, set priorities, and surveys the competition. All of these activities are to design a product which is distinctive and unique, and its price is lower than those of competitors. IKEA outsources more than 90% of its production. Therefore, production is not a focus point for IKEA. The company’s strategy to open its own retail stores is part of its strategy. It gives its customers the chance to see the full lineup of its products in one place. By organizing and decorating its stores in a distinctive style, mostly colored in blue and yellow, which imitate the Swedish flag, indicates that marketing and sales is one of IKEA’s strategies and it is an important part in the company’s value chain. Customer service does not appear to be an important part of the chain value for IKEA. Most of its products are self-assembly, and they are intended to be replaced more often, comparing to traditional style furniture that usually last longer and sometimes are passed down as a heritage.

Hill, C. W. L., & Jones, G. R. (2010). Strategic Management. (9th ed., pp. C333-C340). Mason, OH: South-Western Cengage Learning.

Other Papers Like Ikea Case

Ikea - Case Study

1098 words - 5 pages Case Study: IKEA’s Global Strategy: Furnishing the World By John Rubas Embry Riddle University Worldwide MBAA 514 November 15, 2012 IKEA’s Global Strategy: Furnishing the World IKEA is a Swedish furniture store chain known for its low priced home products and sells ready to assemble furniture. With IKEA’s successful choice of inexpensive products and its unique marketing strategy, the company has been able to expand

Ikea Case Study

1530 words - 7 pages | IKEA Child Labor Case | | | | | | Situation IKEA, a fashionable furniture store was recently noted for using children, as young as five working to produce the hand knotted and hand woven carpets that are being sold in Hong Kong. As a result, local watch dogs for the child labor laws are urging shoppers to no longer shop the IKEA stores until all inks to child labor are removed. SHEENA, once of the exporters for

Ikea Case Answer

1393 words - 6 pages  director of the documentary film as well as pursuing the same goals of eradicating child labor. It could turn the baffling problem around by showing its gratitude to the director for helping spot the child labor at the company’s manufacturing and could never to be too emphasize that the company is going to study the case thoroughly.   Furthermore, what Marianne Barner should point out is that as the IKEA’ s philosophy goes: Anyone can make mistake

Ikea Case Study

1960 words - 8 pages Case study : How IKEA adapted its strategies to expand & become profitable in China Executive Summary: IKEA is known globally for its low prices and innovatively designed furniture. In China, however, it faced peculiar problems. Its low-price strategy created confusion among aspirational Chinese consumers while local competitors copied its designs. This case study analyses how IKEA adapted its strategies to expand and become profitable in

Case Study of Ikea

760 words - 4 pages Case Study of Ikea • How does IKEA generate customer loyalty? As we leaned, Customer loyalty is a deeply held recognition for a company, they re-buy or re-patronize a preferred product or service by the company. IKEA obtains customer loyalty successfully by constantly maximizing customer price and minimizing customer costs. Firstly, Ikea offer a unique value proposition to their consumers: leading-edge Scandinavian design at extremely

Ikea Case Study

3435 words - 14 pages Case Study Analysis Table of Contents Case 1: How IKEA Designs its Sexy Price Tags Introduction ………………………………………………………………………………….. 3 Company background ……………………………………………………………………….. 3 Competitive priorities ……………………………………………………………………….. 3 Process for developing new

Project Management Case Studies: Ikea and Timbuk2

3414 words - 14 pages Project Management Case Studies: IKEA and Timbuk2 Table of Contents Case I: IKEA Design and Pricing 3 Case Summary: 3 Key Terms: 3 Case Questions 5 Conclusions 9 Case II: The Tao of Timbuk2 9 Case Summary: 9 Key Terms: 10 Questions: 11 Conclusions: 15 Bibliography 16 Case I: IKEA Design and Pricing Case Summary: IKEA is a Swedish retailer that dominates the home market in 32 countries and is currently expanding in

Ikea Case

1717 words - 7 pages FOR IMMEDIATE RELEASE Countdown to the 2013 IKEA Catalogue! Petaling Jaya, 16 August 2012 – Let your imagination run wild with the infinite possibilities of making your precious moments at home come true as we count down to the launch of the much awaited 2013 IKEA Catalogue. In anticipation of the arrival of the new catalogue on 30th August, drop by the IKEA store between 21st to 29th August to visit the larger than life IKEA Countdown Room

Ikea Case

552 words - 3 pages Mike Birkenhauer Management 10/22/14 Cultivating Innovation at IKEA As the manager of the IKEA store I have been instructed to change the layout of my store. Corporate headquarters has instructed to me that the change must be “dramatic”. I will use several steps in order to make sure that these changes are in the best interest of IKEA. First, I will form an analysis of opportunities and identify what it is that I want to do. I will then

Case Summary - Ikea

383 words - 2 pages Situation Analysis  IKEA vision “To create a better everyday life for the many people” truly reflects corporate philosophy of this value-driven company with a passion for life at home. Started by 1st generation entrepreneur Ingvar Kamprad , In 2002 IKEA was world’s top furniture retailer with 286 million customer, $12 Billion sales and 154 stores in 22 countries. Even though IKEA was founded in 1943 , the self service store journey started

Ikea Case Analysis

762 words - 4 pages EXECUTIVE SUMMARY จาก Vision ของ IKEA ที่ต้องการให้ผู้บริโภคสามารถออกแบบเฟอร์นิเจอร์ของตนเองได้อย่างอิสระ และเฟอร์นิเจอร์นั้นยังมีราคาถูกและสวยงามอีกด้วยจาก Vision ดังกล่าวจะสามารถกำหนด Mission ของ IKEA ได้ดังนี้"We not only build you furniture, but we build you home for your better everyday life.” IKEA ใช้กลยุทธ์ Penetration Pricing นั่นคือการตั้งราคาสินค้าต่ำกว่าคู่แข่ง 30% ถึง 50% ซึ่งราคาที่ต่ำกว่าของ IKEA ก็ถือว่าเป็น Competition

Related Essays

Ikea Case Essay

2451 words - 10 pages from Poland as opposed to Sweden they had an opportunity to increase margin and profits.  The fact that they instead lowered the price of their products and passed the savings onto the customer demonstrates that IKEA lives their vision and business idea. The case describes the nine cornerstones of IKEA culture and his vision statement, “To create a better everyday life for the many people.”   The testament nine cornerstones were as follows

Ikea Case Study 1037 Words

1037 words - 5 pages IKEA Case 1) IKEA’s vision to “create a better life for the many people” defined IKEA as a company and separated them from their competitors. In the early years of the company, IKEA faced many hardships from the cartel of furniture manufacturers who controlled the Swedish industry to keep prices high. To counteract these hardships, IKEA created a unique business model that was different from competitors. This model included key features

Ikea Case Analysis

1816 words - 8 pages . This target market's purchase decisions were based on prior visits to the store, visits to other stores, and the IKEA catalog. Comparison of Traditional and U.S. Customers Before entering the U.S. market in 1985, IKEA did not conduct thorough market research on U.S. consumers or U.S. buyer behavior. IKEA assumed that U.S. customers would embrace its way of doing business and the products offered. That was not the case, as IKEA’s furniture

Ikea Case Study 1199 Words

1199 words - 5 pages Obs: don`t forget to answer the questions in the end of the case study. 1. History (Explain) 2. IKEA is considered one of the success stories. How have they achieved this success? What barriers have they overcome? 3. What is the basis of IKEA´s differentiation strategy? 4. What the best practices IKEA uses as it pursues differentiation? 5. How does work IKEA´s distribution system? How important this system is for IKEA international success