Ikea (Final Ppt)

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Strategies for improvement - Ikea

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Ikea (Final Ppt)

  1. 1. By<br />Rahul Karangutkar (0951826)<br />Parag Jain ()<br />AtoosaZand (0)<br />Trung<br />SeunFayemiwo (0)<br />Amanda (0)<br />
  2. 2. Outline<br />Introduction<br />Vision And Mission<br />Growth<br />Geographical Scope<br />Strategy<br />Attractiveness Of Market<br />Strategic Competencies<br />Strategy<br />
  3. 3. Introduction<br />Ingvar KampradElmtarydAgunnaryd<br />Founded: 1943 in Almhult, Smaland, Sweden<br />Founder: Ingvar Kamprad<br />Headquarters: The Netherlands<br />Parent Company: INGKA Holding<br />Industry: Retail<br />Product: Self Assembly Furniture<br />Chain of Product: Restaurant, Manufacturing, Housing, <br />Revenue: €23.1billion (2009)<br />Employees: 127,000 (2009)<br />Area Served: Multinational<br />316 stores (2010)<br />699million visitors (2010)<br />
  4. 4. IKEA <br />Vision: <br />Mission Statement: Ikea's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them<br />Growth<br />Source: Ikea, 2010<br />
  5. 5. Growth Pattern<br />Started 1943 as a one man mail order company<br />The Ikea concept started in 1950<br />The company started sourcing supplies from other European countries<br />In 1960, the warehouse principle was introduced<br />In 1963, Ikea went abroad, opening in Norway<br />
  6. 6. Geographical Scope<br />SALES BY REGION<br />Europe – 81%, North America -16% and Asia & Australia -3%<br />TOP SUPPLIER COUNTRIES<br />China -18%, Poland- 12%, Sweden -9%, Italy -7% and Germany -6%<br />
  7. 7. Supply Chain (IKEA)<br />Source: Thetimes100.co.uk, 2010<br />
  8. 8. Business Strategy<br />Segmentation<br />Middle-class population, All age group.<br />Advanced Economies – Europe, USA, Australia<br />Emerging Markets – China<br />Positioning<br />Cost Leadership<br />Differentiation<br />
  9. 9. Business Strategy<br />
  10. 10. Value chain of IKEA <br />CUSTOMERS<br />SUPPLIERS<br />DISTRIBUTION<br />
  11. 11. Resource Based View (IKEA )<br />
  12. 12. Resource Based View<br />
  13. 13. PORTER’S DIAMOND MODEL: IKEA<br /><ul><li> Suppliers
  14. 14. Technology</li></ul>FIRM STRATEGY, STRUCTURE & RIVALRY<br /><ul><li> Low cost  low price strategy
  15. 15. Low bureaucracy
  16. 16. Rivalries:
  17. 17. British “B&Q”
  18. 18. Germany </li></ul>DEMAND CONDITIONS<br />FACTOR CONDITIONS<br /><ul><li>Labour force: low cost
  19. 19. Infrastructure: </li></ul> poor => good<br /><ul><li>Government policy
  20. 20. Population: 1.3 billion
  21. 21. The raising of Middle class
  22. 22. Cheap furniture demand</li></ul>SUPPORTING INDUSTRIES<br /> INTERNATIONAL BUSINESS STRATEGY (SMM 206) PRESENTATION<br />(Porter, 1990)<br />
  23. 23. Transnational Strategy<br />Pressure for global Integration<br />Standardising whenever possible<br />90% of product line is similar across in more than 12 countries<br />IKEA’s marketing is centrally developed at headquarters<br />Pressure for local responsiveness<br />Adapting when necessary<br />Modification of its furniture to suit individual countries e.g longer hangers in Italy and deeper wardrobes in USA<br />Implementation of local adjustments in marketing to suit language and catalogue.<br />
  24. 24. Comparative Advantage<br />Supply from China<br />Low cost labour<br />Labour skill<br />Raw material accessibility<br />Sales in EU, North America<br />Very Large middle class group<br />
  25. 25. Conclusion<br />Since IKEA’s target consumers are the middle-class, they should extend their retail services to Emerging Market Economies where Middle class population is rapidly increasing.<br />IKEA should increase sourcing its supply from emerging markets, which are characterised by low cost labour to sustain its competitive advantage.<br />
  26. 26. REFERENCES<br />Baraldi, E.(2008) “Strategy in Industrial Networks: Experiences from Ikea” Carlifonia Management Review, 50(4), 99 – 126.<br />Beard, B. (2006) “IKEA facing competition on furniture row” Arizona Business Gazettes, available online at: http://www.azcentral.com/abgnews/articles/0824abg-tr-emerald0824.html , accessed 01/12/2010<br />Boscor, D., and Bratucu, G. (2009). “Transnational strategies adopted by furniture manufactures- case study:IKEA” ProLigno, 5(3): 55 – 61.<br />Datamonitor (2008). “Ikea Group”<br />
  27. 27. Thank You !<br />

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