IKEA
Executive Summary
The following is an analysis of the IKEA case study found in the Strategic Management Text book. This analyses the strategies used by IKEA to gain competitive advantage in markets outside its original area. The report begins by providing a background into IKEA. It studies International Business Level Strategy and the three international corporate level strategies.
The case study goes into informing its target market and pricing strategy, which is already discussed. This case study further says how different people in different parts of the world thinks about IKEA, how elegant their designs are and how affordable for them to purchase IKEA products. Some of IKEA’s main markets are in three of the fastest growing markets such as
Russia, US and China. IKEA store bring out products such as furniture to small product like a scented candle. IKEA has over
1300 suppliers in about 53 countries. They further have 12 full time in- house designers with 80 free lancers and other production workers to identify the correct raw materials and produce products efficiently and cost effectively. Primarily, IKEA produced standardized products however; this international strategy did not work for one of its vital markets that is, US.
Therefore, they had to emphasize on taking corrective actions. The report also analyses the entry methods used by IKEA and its sustainability.
IKEA Case Study
2
MAN3503-Strategic
Management
Table Of Contents
Introduction
4
History
4
I/O model
6
The External Environment
The Industry Environment
The competitive environment
Value Chain
6
7
8
8
International Strategy
10
Strategic Choice
11
International Business Level Strategy
11
Multidomestic Strategy
11
Global Strategy
11
Transnational Strategy
11
Modes of entry
13
China
13
USA
14
Conclusion
14
References
15
Sharleen Suwaris
Introduction
History
IKEA was founded by
The following is an analysis of the IKEA case study found in the Strategic Management Text book. This analyses the strategies used by IKEA to gain competitive advantage in markets outside its original area. The report begins by providing a background into IKEA. It studies International Business Level Strategy and the three international corporate level strategies.
The case study goes into informing its target market and pricing strategy, which is already discussed. This case study further says how different people in different parts of the world thinks about IKEA, how elegant their designs are and how affordable for them to purchase IKEA products. Some of IKEA’s main markets are in three of the fastest growing markets such as
Russia, US and China. IKEA store bring out products such as furniture to small product like a scented candle. IKEA has over
1300 suppliers in about 53 countries. They further have 12 full time in- house designers with 80 free lancers and other production workers to identify the correct raw materials and produce products efficiently and cost effectively. Primarily, IKEA produced standardized products however; this international strategy did not work for one of its vital markets that is, US.
Therefore, they had to emphasize on taking corrective actions. The report also analyses the entry methods used by IKEA and its sustainability.
IKEA Case Study
2
MAN3503-Strategic
Management
Table Of Contents
Introduction
4
History
4
I/O model
6
The External Environment
The Industry Environment
The competitive environment
Value Chain
6
7
8
8
International Strategy
10
Strategic Choice
11
International Business Level Strategy
11
Multidomestic Strategy
11
Global Strategy
11
Transnational Strategy
11
Modes of entry
13
China
13
USA
14
Conclusion
14
References
15
Sharleen Suwaris
Introduction
History
IKEA was founded by
References: intials and the first letters of the farm and village in which he grew up. The company initially sold basic items such as pens, picture frames, table runners, wallets, jewellery, nylons stockings and watches, at a low price("History of ikea," 2010). ("History of ikea," 2010). The vision at IKEA is to “create a better everyday life for the many people”("Ikea," 2011). The main business of IKEA supports this vision, by the manufacture and selling of a wide range of home furnishing products at an affordable price