IKEA was successful at i identifying worldwide suppliers and ii managing quality and iii prices with suppliers, to keep margins low. Established in the s, IKEA is a furniture company that sells a wide range of furniture and related products. From the customer Ikea case discussion questions of view, they were able to buy low cost furniture, however they had to assemble and collect the flat-packed furniture from stores.
It adopted an ethnocentric strategy for going international - where it had standardized products and standardized operations.
This was achieved by a world network of 14 warehouses. Costs increased as a result, but this localization approach was necessary for sales.
The company was able to sell its standardized products across Europe, and as a result Ikea case discussion questions able to build considerable economies of scale into its operations and maintain a price advantage over its competitors.
Do you believe that IKEA would have been open to advice? It has been hugely successful since its origin in as a mail order catalogue featuring locally produced furniture. Can you see any drawbacks with this strategy? It hasemployees. IKEA to was able to reduce costs, as this costly part of the value chain was carried out by the customer.
Its expansion into the US market. As ofwhat strategy is IKEA pursuing? Inventory was stored - and the IT system managed supply and demand to stores, keeping inventory costs low. IKEA has looked towards emerging markets e.
It had excellent supply chain management and utilized the latest IT infrastructure. IKEA had excellent international procurement.
Regardless of how profitable and savvy a company is selling its products in one market, it may encounter problems in another markets unless it fully understands the subtleties of the new market.
Why do you think this strategy did not work as well in North America as it did in Europe? In its initial push to expand globally, IKEA largely ignored the retailing rule that international success involves tailoring product lines closely to national tastes and preferences.
Both markets were looking for well styled, high quality furniture that reasonably priced and readily available. First, what types of services to these companies offer? One way that a company can quickly "come up to speed" on a new market is by retaining the advice of a consulting firm that has expertise in that market.
The concept was furnishing products and house-wares that had wide appeal to a variety of markets and segments, both consumer and the business market exclusively. Does this strategy make sense?
The IKEA brand is associated with simple, low cost, stylish products. This case illustrates an important point. Second, even though IKEA was in experienced international firm, could it have avoided some of the mistakes that it made in its initial push into the North American market by obtaining advice from one of these firms?
Further adaptation to products has been necessary - including pricing strategy. IKEA had to change the model of operating, giving greater ownership to its US subsidiary, to become polycentric - stores in the US had the ability to adapt furniture and customize to suit the local market.
Why or why not? Initially, IKEA did not customize its products to local markets, but kept to standardized products and operations worldwide.
Instead, the company stuck with its initial vision that it could sell the same "essentially Swedish" products around the world. This standardized strategy of internationalizing minimized costs.A Case Study Documenting IKEA’sSuccess and Challenges.
The IKEA Group, a Swedish company founded in with its headquarters in Denmark, is a multinational operator of a chain of stores for home furnishing and house-wares.
View Ikea from ECON A at University of California, Berkeley. Case Discussion Questions: 1. How is IKEA profiting from global expansion? What is the essence of its strategy for creating value by%(2).
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research questions that guided our empirical in-depth case study of IKEA. The third section describes our research methodology leading to the fourth section which reports on the findings from the IKEA. IKEA Case Study: Strategic Marketing & Management – Gaining Competitive Advantage in an International Context.
Published on October 8, View Notes - IKEA's Global Sourcing Challenge case questions(1) from BUAD at University of Southern California. BUAD Strategic Management Case Discussion Questions IKEAs Global Sourcing92%(13).Download