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Ikea Case Study

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?
6. Which ones are IKEA´s main global competitors?
7. Explain IKEA business model?
8. How does it work the manufacturing process? Where does production take place?
9. Is product adaptation related to IKEA strategy? Explain.

10. What is IKEA ...view middle of the document...

They ensure beneficial after sales services by ensuring the consumers have the know how for construction of furniture, the right tool, and most importantly, access to customer service if problems arise.

12. How does IKEA brand its products?

IKEA works for a quality, yet affordable brand. It reaches consumers with this brand through high quality catalogs showcasing their new products, word of mouth from consumer to consumer, and careful store location (i.e. near universities and young parts of cities).

13. What is IKEA entry strategy for the Brazilian market? What are its main barriers and challenges faced by IKEA in Brazil?

IKEA has approached entering the Brazilian market in a very similar manner as they have with most of the other new markets they have entered. They have, and will continue to, established connections with the local suppliers of furniture and furniture parts. This not only helps decrease the competition from the local suppliers, but also gives IKEA the necessary market knowledge to succeed in a country like Brazil. The main barrier that IKEA faces when entering the Brazilian market is the harsh import climate that implements high taxes on materials sent to distribution centers. This limits the minimization of costs greatly. Also, to reach the largest target market, IKEA has to effectively place retail centers in more urban settings, which exponentially raises the rent and space necessary for the size of an IKEA store. Finally, IKEA faces tight competition from local and national suppliers and investments in furniture production, due to the wood industry in Brazil.

14. Is IKEA International Strategy successful? Explain.

IKEA’s International Strategy has been extremely successful. They have been able to use comparative advantage on all levels of production by utilizing local supplier’s market knowledge and establishing necessary connections around the world. While some worry about the seeming impossibility of keeping bureaucratic nuisances to the minimum, IKEA has shown that it can, and does, work. Even with the recent economic instability in their markets, IKEA has been able to rise above the recessions in a sustainable fashion. IKEA’s brand and prices will continue to prevail and will prove to be a successful business model going forward.

15. Until now IKEA international marketing strategy has been tightly and centrally controlled by corporate headquarters. However, high local' pressures emerging due to demographic and cultural differences might force the local IKEA shops to take strategic initiatives to respond to local market needs. In this connection discuss the regional headquarters and transnational organization (presented in Chapter 12) as hierarchical...

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