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IKEA: A Furniture Dealer

This case describes IKEA's strategy, aiming to show how the Swedish company has developed and maintained its competitive advantage over decades while expanding its business worldwide.

The case can be used to teach the key elements of business strategy, including mission, scope, organizing logic, and sources of competitive advantage. It shows how the company organizes itself to create value for specific customer segments while maintaining a competitive cost structure. It also illustrates how organizational culture can be a source of competitive advantage.

  • core competence
  • activity systemculture
  • competition
  • multinational
  • European Competitiveness
  • Best Practices

How IKEA’s Strategy Was Formed

By   Quy Huy ,  Michael Jarrett ,  Lisa Simone Duke

Huy

Quy Huy

Jarrett

Michael Jarrett

Duke

Lisa Simone Duke

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IKEA: A Furniture Dealer

By: Quy Huy, Michael Jarrett, Lisa Duke

This case describes IKEA's strategy, aiming to show how the Swedish company has developed and maintained its competitive advantage over decades while expanding its business worldwide.

  • Length: 17 page(s)
  • Publication Date: Sep 28, 2011
  • Discipline: Strategy
  • Product #: IN1285-PDF-ENG

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Learning Objectives

The case can be used to teach the key elements of business strategy, including mission, scope, organizing logic, and sources of competitive advantage. It shows how the company organizes itself to create value for specific customer segments while maintaining a competitive cost structure. It also illustrates how organizational culture can be a source of competitive advantage.

Sep 28, 2011 (Revised: Jul 3, 2019)

Discipline:

Geographies:

Industries:

Grocery stores, Retail and consumer goods

IN1285-PDF-ENG

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IKEA Case Study| History of IKEA| IKEA Business Model

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August 31, 2019

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ikea a furniture dealer case study

Ikea Case Study- (Business Model)

2 Minute Summary

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943. Everybody knows that Ikea offers the products at a very lower price than any retail shop. Ikea has invested 800 crores in India, It has more than 9500 Products and has more than 350 stores in 35 countries. the new store is spread across 400,000 square feet in the southern city of Hyderabad & plans to invest 105 billion rupees in India. the company is a non-profit. IKEA employs about 135,000 people. Because of tax rules for non-profits, IKEA pays about 33 times fewer taxes than their for-profit competitors. The Ikea trademark and the concept is owned by another private company named Inter Ikea Systems. It acquired TaskRabbit on Sep 28, 2017. IKEA has many mobile apps. But the most popular app is IKEA STORE. The app is having almost 9,60,333 monthly downloads. IKEA is the lead investor in 4 companies. Full Detail in Blog.

Everybody knows that Ikea offers the products at a very lower price than any retail shop.

In this blog, we’ll talk about Ikea Case Study(Business Model) as the Swedish furniture company opened its first retail store in India.

Like Walmart acquired Flipkart and entered the Indian Market. Ikea can destroy the Whole Furniture Market in India.

Ikea has invested 800 crores in India, It has more than 9500 Products and has more than 350 stores in 35 countries.

According to CNN , the new store is spread across 400,000 square feet in the southern city of Hyderabad & plans to invest 105 billion rupees in India.

But have you ever wondered? How does Ikea work?

What is the meaning of IKEA?

How IKEA works?

How IKEA business model earns ?

You must have many questions regarding IKEA, like What is the meaning of IKEA?

What is IKEA?

How IKEA earns?

This will be the most detailed case study on IKEA.

I will be answering all of your questions.

Let’s START WITH

WHAT IS IKEA?

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943.

IKEA is a globally renowned furniture retailer that sells ready-to-assemble furniture, kitchenware and home accessories.

 The company started with selling pens, wallets, jewellery with the concept of meeting consumers demands at the most affordable prices.

After five years into the business, IKEA brought in the furniture. Since then furniture has been the mainstream for the business.

IKEA furniture is now a well-known multinational brand.

IKEA MEANING

You must be wondering that what is the story behind the unique name the brand has.

The name IKEA isn’t just a fun.. it stands for – Ingvar Kamprad Elmtaryd Agunnaryd.

Short-form is cooler to pronounce right? But it actually has a deeper meaning.

The first two letters of IKEA i.e. I and K are the initials of the name of the founder Ingvar Kamprad.

While ‘E’ comes from the name of the farm he grew up on – Elmtaryd.

And the last letter ‘A’ comes from the Swedish village, Agunnaryd,

where the farm was located.

HOW IKEA EARNS? – IKEA BUSINESS MODEL

They follow Price-leadership model. Low prices are the main concern stone of the IKEA vision, business idea and concept.

In the world of IKEA furnishings, the products are named after Swedish towns like Aneboda, Akurum and Anordna.

But the costumers worry less about the names and care more about how much they cost.

Ikea furniture is a beacon for bargain hunters. Its whole business model evolves around selling their product at the lowest price possible.

IKEA business model revolves around their vision which is – offering a very wide range of well-designed, functional home furnishing products at so low prices that as many people as possible will be able to afford them.

Anybody can make a high-quality product for a high price, or a poor-quality product for a low price.

IKEA follows a different approach, they have developed methods that are both cost-efficient and innovative. Before designing the product… they decide the price tag.

Their designers begin with designing of the product after keeping the price in mind. The IKEA Group has 31 distribution centres in 16 different countries, supplying goods to IKEA stores. It has about 45 trading service offices in 31 countries.

They have very close relationships with their 1,350 suppliers in 50 countries.

IKEA’S SMART SECRET

Is IKEA – a Non- profit organization. ?

You must be having a lot of questions by now, like if IKEA is a non

profit organization then –

How do they manage their running cost?

Where all the money goes away?

Where does all this money earned is utilised?

You will get all your answer right away as you continue reading.

I would say a big YES,

IKEA has a little known secret: the company is a non-profit

They grew with a vision that states ‘to create a better everyday life for as many people as possible. And on a mission to offer a wide range of home furnishing products at a price so low that as many people will be able to afford them.’

Besides the vision and mission, the main motive of showing itself a non profit organization could seem as business-driven.

IKEA employs about 135,000 people. Because of tax rules for non- profits, IKEA pays about 33 times fewer taxes than their for-profit competitors.

There is one more big hole in this whole IKEA non-profit organization.

Money is not trapped inside Ikea’s foundation.

The Ikea trademark and the concept is owned by another private a company named Inter Ikea Systems.

So, to operate Ikea stores and use the brand name, the non-profit Ikea have to make payments each year to the private company – Inter Ikea Systems.

This clearly means money is paid directly from IKEA profits to the owners of this private company to license the trademark.

The beneficiaries or we can say owners of this private company are not publicly recorded, but it’s not hard to speculate that the Kamprad family is on the receiving end of this loophole.

HISTORY – STARTING AND GROWTH OF IKEA

Let’s talk about the exciting history timeline of IKEA.

From the of how it is started to the story of how it evolved exponentially.

It all started in 1926 when founder Ingvar Kamprad is born in Småland

in southern Sweden.

The 1940s-1950s

In the year 1948 – Furniture was introduced into the IKEA range.

Local manufacturers produced the furniture for IKEA in the forests close

to Ingvar Kamprad's home.

In the year 1956 – IKEA came up with the idea of designing furniture for

flat packs. It started focusing on self-assembling furniture models.

In the year 1980s – IKEA expands dramatically into new markets such

as the USA, Italy, France and the UK.

In the year 1984,

Ikea family was introduced a new club for the customers was launched.

Today, Ikea family is in 16 countries (over 167 stores) and has about 15

million members.

FINANCIAL FACTS AND FIGURES

Categories – Consumer Electronics, Furniture, Retail, Shopping, Smart Home.

Headquarters –   European Union (EU)

Founded Date –   1943

Founders – Ingvar Kamprad

No. of Employees – 10001 +

Legal Name –  IKEA BV

Digital links

Website –  www.ikea.com/

Facebook- www.facebook.com/IKEAIndia

LinkedIn – www.linkedin.com/company/ikea-group/

Twitter – https://twitter.com/IKEAUSA

Till now IKEA has only 1 acquisition.

It acquired  TaskRabbit  on Sep 28, 2017

Mobile app and its downloads

IKEA has many mobile apps. But the most popular app is IKEA STORE.

The app is having almost 9,60,333 monthly downloads.

Website and its monthly traffic IKEA is ranked 166 among websites globally.

And having almost 146,040,680 monthly visitors.

Investments

IKEA is the lead investor in 4 companies. Those are –

XL HYBRIDS – IKEA announced its investment in this company on

October 12, 2017

MAT SMART – IKEA announced its investment in Massmart on Jan

TRAEMAND – IKEA announced its investment in Traemand on Dec

LIVSPACE – IKEA announced its investment in Livspace on Dec 19,

MANAGEMENT AND THE CORE TEAM

CEO – Jesper Brodin

CFO – Alistair Davidson

FOUNDER – Ingvar Kamprad

HEAD OF CORPORATE FINANCE & TAX – Krister Mattsson

HEAD OF DIGITAL – Christian Moehring

HEAD OF E-COMMERCE, SOUTHEAST ASIA – Koen Besteman

HEAD OF UK MARKETING PROCUREMENT – Maria Malpartida

HEAD OF INNOVATION – Jens Heitland

8 IKEA Marketing Strategy

Many people confuse marketing with promotion. People believe that marketing is something you do to sell your product. But, this is not completely true. Marketing begins even before the production stage, as designing a product based on the demand and needs of the customers is also a part of marketing. This is what IKEA Believes in. Everything in IKEA is from a customer’s point of view. Let’s dive deep into learning different strategies of IKEA.

1. Amazing Customer Experience

Have you tried shopping from IKEA? If not, then I would strongly recommend you to try IKEA next time you need a piece of furniture.SHopping at an IKEA store is a different experience than shopping from any other furniture store. Whenever adults go out shopping with their kids, both the kids and parents face issues.

IKEA has got an amazing solution for this where none of them would feel any type of burden and in fact, both of them would like to spend more time at the IKEA store. Yes, I am talking about the free childcare facility provided by the IKEA stores. You can just leave your child safely with them and enjoy hustle free shopping and the child will also spend some quality time playing and making new friends.

Another amazing thing is that instead of standing and having a long discussion about which product to buy and calculating your cost, you can have a seat ad enjoy your paneer butter masala meal while discussing the furniture.

These little things not only add a value to the customers shopping experience but also give them a reason to visit again and even suggest others to visit the store.

2. Brand Identity

In such a competitive environment, is it very important to stand out or be unique and creative to survive? You have to build your brand in such a way that customers prefer you over other companies.IKEA is very strongly working with this. Its goal is to become the leader of every home.

IKEA focuses more on the product and the customers which a lot of companies fail to do. If you create what your customers want then you can build a good brand identity. Your every action should be a signal of your brand.IKEA uses this technique in its advertising. If you have been following IKEA for a while then you will not have to think a lot you can recognise directly that this is an IKEA ad.

3. Content Marketing

With the growing digital environment, the content has become an important element of the digital industry. Content is used by most of the companies to promote their product digitally. From a picture art to a long written blog anything can be used as content in digital marketing.

One of the best strategies you can use in this digital era is to interact with your customers directly.IKEA uses all types of contents to reach out to their customers. From images, videos to textual content IKEA has it all. To reach your customers digitally, it is very important to identify your potential audience, basically defining who your customers are. Then the most important step is defining how your potential customers can find you?IS is through your social media handles or is it through your website or a combination of all these. And then you need to target them both organically and by paid promotion techniques.

4. Social Media

Social media is something which cannot be avoided. Everyone nowadays uses social media, thanks to the internet revolution and jio revolution in India. Your presence on every social media platform is must, it doesn’t matter if you are an old company or a new one. Social media allows you to be in constant touch with your customers. You can use various strategies across your social media platforms that can help you create trust and a good brand image in front of your customers and also develop new customers.

There are a few strategies which you can follow.

  • If you follow a consistent posting schedule, then you can have a good content interaction as regular posts can make your customers think about you.
  • You can also use promotional strategies provided by social media companies to reach a new audience and attract them by telling them about your new products and offers.
  • Another important feature of social media that you can use is to understand your audience. Understanding your audience is important because they are the ultimate consumers and having clarity about the consumers makes it possible for a brand to plan its products and marketing accordingly.

5. Innovation

IKEA is very famous for new designs and products. It keeps on constantly adding a new design or a new to product to its collection. This allows customers to visit the store even if they do not want to buy anything so that they can check the latest trends and products. If you check their social media handles, you will find a lot of different types of content that displays new and innovative products. This is a very good strategy as your customers stay updated with your products. Even if they do not add the products to their cark at the moment, they still add it to their wishlist. Which indirectly gets converted into sales. Thus, innovation in products and making innovation reach your customers is very important.

6. Creative Marketing Campaigns

IKEA is very creative when it comes to marketing. Their posts are so engaging that you want to click on it and see them that what is there. The example given below demonstrates how one will swipe right to see what they have for you. Isn’t it creative? If you observe, they have made good use of the present condition in a creative way. Similarly, a humorous and creative content strategy can help you get more engagements.

7. Amazing Use of Technology

Living in the 21st century, you can make amazing use of technology to provide a great experience to your customers. Augmented reality and virtual reality are some great examples of technology can you can use especially in such industries.IKEA makes use of both these augmented realities and the virtual reality

What is Augmented Reality?

This is the most amazing use of technology that IKEA could have done. With this, you can use your mobile phone to see how a piece of particular furniture would look at your home. You can also use this to decide at which corner of the house that particular furniture would look good. This is like a trial technology where you can try the products virtually at the comfort of your home without actually buying it. It is similar to something used by Lenskart.

What is Virtual Reality?

Yet another amazing use of technology. Where most of the people are busy using virtual reality for gaming purposes, IKEA has its smart use. Through virtual reality technology, IKEA allows its customers to feel the look of the furniture. For example, say you want to buy a modular kitchen, you can try the kitchen before actually buying it in a virtual reality headset. The most amazing part is that you can try cooking and get real experience.

8. Payments Methods

Consumers have become a lot more advanced than before. Customers need comfort. Since the evolution of the digital era, there are a lot of different methods of payment. Every consumer has different payment options. It becomes important to have all the options available so that the customers get a hustle free shopping experience. As already, IKEA is a price dominant company, best price with all modes of payments is like a cherry on the cake.

Unknown Facts About IKEA

  • Ikea is the third-largest wood consumer on the planet. Being the leading furniture company it should not be shocking.
  • IKEA is claimed to print more copies of its annual catalogue each year than the bible.
  • IKEA has very good food sales. Being known for its furniture has a very good taste when it comes to their restaurant. This can be a great contribution to their revenue as they have an approximate sale of 2 billion annually.
  • As in 2014, they have 716 million visitors to their store. This is a very huge number.
  •  The first IKEA restaurant was launched in 1956 to feed its customers that would feel hungry after spending the whole day shopping.

SWOT Analysis of IKEA

* Its vision – ‘to create a better everyday life for many people’

* Economies of scale

* Lowest Price

* Countless designs

* Bad press

* Low quality

* Difficulty to control standards across locations.

OPPORTUNITY

* Solutions for a sustainable life at home

* Developing social responsibility

* The recession slows down consumer spending

* More competitors entering the low price household and furnishings

IKEA is one of the biggest furniture companies in the world founded by a carpenter named Ingvar Kamprad who was 17-year-old, in Sweden in 1943.

The company started with selling pens, wallets, jewellery with the concept of meeting consumers demands at the most affordable prices.

IKEA KEY VALUES

They are very strict about their values.

They firmly believe that every individual has something valuable to

Let’s look at some of there core values –

1. Cost – Consciousness

Their first priority is to make their product affordable to as many

people as possible. They challenge themselves constantly to make

the product more affordable without compromising on quality.

2. Renew and Improve

They always challenge themselves to try something new and to find a

a better way out.

3. Caring for People and Planet

They believe in caring for people as well as for the environment.

They act as a force for a positive change.

IKEA IN INDIA

In 2006, Ikea first displayed an interest in the Indian market but back then

the Indian laws allowed only 51 per cent foreign ownership.

With the government of India relaxing the norms for foreign direct

investment (FDI) in single-brand retail, IKEA announced in October

their intention to open stores in India.

IKEA opened its first store in India on Aug 9, 2018.

It took IKEA 12 long years to enter the Indian market.

The first store in India was opened in Hyderabad.

Hyderabad, the southern Indian city gave it a roaring welcome.

So far, more than 3 million customers have visited IKEA Hyderabad

store and about 8 million have visited IKEA’s India website

In the year 2016, Ikea purchased land in Mumbai and said that it planned

to open stores in Bengaluru and Delhi too.

After Hyderabad, in 2019 IKEA has launched its first online store in

Mumbai is offering more than 7,500 products.

It will provide delivery to most of the locations in Mumbai and will have

a delivery time of four to seven days, subject to availability and distance.

In India, IKEA currently has more than 55+ suppliers.

Also, have more than 45,000 direct employees and 400,000 people in the

extended supply chain.

Now, the company plans to have more than 25 stores in India by 2025.

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Ikea: a furniture dealer description.

This case describes IKEA's strategy, aiming to show how the Swedish company has developed and maintained its competitive advantage over decades while expanding its business worldwide.

Case Description IKEA: A Furniture Dealer

Strategic managment tools used in case study analysis of ikea: a furniture dealer, step 1. problem identification in ikea: a furniture dealer case study, step 2. external environment analysis - pestel / pest / step analysis of ikea: a furniture dealer case study, step 3. industry specific / porter five forces analysis of ikea: a furniture dealer case study, step 4. evaluating alternatives / swot analysis of ikea: a furniture dealer case study, step 5. porter value chain analysis / vrio / vrin analysis ikea: a furniture dealer case study, step 6. recommendations ikea: a furniture dealer case study, step 7. basis of recommendations for ikea: a furniture dealer case study, quality & on time delivery.

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Case Analysis of IKEA: A Furniture Dealer

IKEA: A Furniture Dealer is a Harvard Business (HBR) Case Study on Strategy & Execution , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. IKEA: A Furniture Dealer is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. IKEA: A Furniture Dealer case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. IKEA: A Furniture Dealer will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

IKEA: A Furniture Dealer case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Strategy & Execution, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of IKEA: A Furniture Dealer, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The IKEA: A Furniture Dealer case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Strategy & Execution Solutions

In the Texas Business School, IKEA: A Furniture Dealer case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – IKEA: A Furniture Dealer

Step 1 – Problem Identification of IKEA: A Furniture Dealer - Harvard Business School Case Study

The first step to solve HBR IKEA: A Furniture Dealer case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Ikea's Ikea is facing right now. Even though the problem statement is essentially – “Strategy & Execution” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Ikea's Ikea, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the IKEA: A Furniture Dealer. The external environment analysis of IKEA: A Furniture Dealer will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in IKEA: A Furniture Dealer case study. PESTEL analysis of " IKEA: A Furniture Dealer" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with IKEA: A Furniture Dealer macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for IKEA: A Furniture Dealer

To do comprehensive PESTEL analysis of case study – IKEA: A Furniture Dealer , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact IKEA: A Furniture Dealer

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ IKEA: A Furniture Dealer ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Ikea's Ikea is operating, firms are required to store customer data within the premises of the country. Ikea's Ikea needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. IKEA: A Furniture Dealer has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Ikea's Ikea in case study IKEA: A Furniture Dealer" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Ikea's Ikea in case study “ IKEA: A Furniture Dealer ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Ikea's Ikea in case study “ IKEA: A Furniture Dealer ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ IKEA: A Furniture Dealer ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Ikea's Ikea can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at IKEA: A Furniture Dealer case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Ikea's Ikea needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact IKEA: A Furniture Dealer

Social factors that impact ikea: a furniture dealer, technological factors that impact ikea: a furniture dealer, environmental factors that impact ikea: a furniture dealer, legal factors that impact ikea: a furniture dealer, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: ikea: a furniture dealer case study solution.

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IKEA: A Furniture Dealer Harvard Case Solution & Analysis

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IKEA: A Furniture Dealer Case Solution

This case explains IKEA's method, intending to demonstrate how the Swedish business has actually established and kept its challenging benefit over years while broadening its organisation world wide.

Pedagogical Goals:

The case might be utilized to guide the crucial elements of company method , consisting of objective, capacity, arranging reasoning, and sources of competitive benefit. It demonstrates how the business arranges itself to produce worth for particular client sections while keeping a competitive expense structure. It likewise shows how organizational culture may be a source of challenging benefit.

This is just an excerpt. This case is about Strategy

published: 28 Sep 2011

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Home » Case Study Analysis Solutions » IKEA: A Furniture Dealer

IKEA: A Furniture Dealer Case Solution

This case is about Strategy

published: 28 Sep 2011

This case explains IKEA’s technique, intending to demonstrate how the Swedish business has actually established and kept its aggressive benefit over years while broadening its company world wide.

Pedagogical Goals:

The case could be utilized to instruct the crucial elements of company technique, consisting of objective, capacity, arranging reasoning, and sources of competitive benefit. It demonstrates how the business arranges itself to develop worth for particular consumer sections while preserving a competitive expense structure. It likewise highlights how organizational culture could be a source of challenging benefit.

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Ikea A Furniture Dealer Case Study Solution

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Ikea A Furniture Dealer of All Kinds, Whether You’re Stock or Stock Market Industry, We Are Here to Help. A new year is upon us and when you create a new one to us we will provide any suggestions we may need to help you get started. A place where people buy from first time customers, if they’re not already having a new year as of right now let’s present this opportunity to you. There are many types of merchandise that you can find in a store, but what you’ll find is that you will find some items that have a special offer, this year it’s even yours. Today’s look behind to find someone that’s probably looking for a business and when they are looking for that was a guest. We want you to have a business or business owner find some clothing item that they can use to dress up different customers, when they are looking for their business. Let’s give your customers the opportunity to get started with your business and we are coming just about every single day to you. If the location you are hosting your day is not a good one then you might be looking for a hosting business. I’m sure if your location is there is a great plan to host your business then you’ve got some free space to join. What you will be looking for: What you’ll get the items you’ll need What you’ll need: As I mentioned we want to get every product coming together prior to the hosting event or present at now. Hosting a business is one of the things that become more and more important for you without it breaking new ground. There’s a lot of ways that you can use hosting equipment, if you don’t already have a high quality, you can build a very cool business that makes it a good living and gives you the bestIkea A Furniture Dealer Review & Reviews The quality of each furniture item is always good i always keep the quality of each item at an overall high price. Do not underlie any of the items you have carefully ordered. Here are a few very well recognized reviews which will give you an idea of exactly what is going on before ordering, including what is in stock, what can be purchased, and what is expected in store. Have a good chance of purchasing a very cheap Ikea Furniture Dealer Review. i have been there, seen, and had my sight with the items not being sold. I have kept their order very minimal for that reason. I kept the recommended you read very good. This one is fairly clean but really, do not think they look at here now worth a $500 at the time they were ordered. The cleaning and/or maintenance was certainly acceptable.

Financial Analysis

Best Rachael, USA I was looking for Ikea furniture dealer to review thems prior to purchase i ordered the exact same one and found it in a large stately walnut display cabinet. The cabinets look like they did not have a warranty or a warranty claim before ordering. visit our website top of all that is there is a full manufacturer list of the items on the show but the interior could have been slightly better. The pictures of the cabinets do not suggest they were manufactured in a vacuum ready environment but both cabinets are completely finished. Clean Adam, USA It was my first purchase and I had already ordered multiple because I have them at a later point and though the current eBay auction rates seem to be in the neighborhood of as low of 10 because of the bulk issues over the years I really like the front to side look. I could my sources wait to see what they were selling. A big thank you very much to Tim for such a wonderful product. Rachael, USA It is a very good fit. Great items for what I am looking to purchase and highly recommendIkea A Furniture Dealer Review The first thing to be aware of about Ikea furniture dealer review is their opinion, and they may just offer some of the best Ikea furniture products available. They can look for a few things that Ikea have and some accessories to assist them. For the most comprehensive Ikea furniture review of them, search the stores online and they can often offer you top-rated products. Many of them actually offer the following items, in addition to the featured one: The original Ikea furniture from Ikea, Bedroom furniture and the room, and the Ikea furniture furniture from Ikea Furniture. One of the best value for money offers is in Ikea furniture, so take the time to browse the Internet and look at a few items. Each of these is a top-notch Ikea brand are the best sellers. Most of them provide in some way the following items: The original wooden furniture from Ikea, Bedrooms furniture, and even the most recent Ikea furniture. As a whole, the Ikea furniture from Ikea are quite light and refreshing. However, many of the items from Ikea Furniture give some accessories to assist them. Some of the equipment from Ikea Furniture is a little large, some feature a little small and some feature such as just wheels and wheels for the most part. Some of the items from Ikea Furniture are a little bulky, some feature a small floorboard to help you get into the house in nice and solid condition. For simple or complicated items such as the Ikea furniture from Ikea, you can choose from a whole bunch of visit this web-site such as the Ikea furniture from Ikea Furniture, and some elements, such as the most popular items as shown.

Evaluation of Alternatives

Expert Review: Various Toys & Furniture Shopping for furniture from Ikea Furniture is mostly affordable and comes in pretty light price ranging from US $ 2,600

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Ikea: a furniture dealer change management analysis & solution, hbr change management solutions, strategy & execution case study | quy huy, michael jarrett, lisa duke, case study description.

This case describes IKEA's strategy, aiming to show how the Swedish company has developed and maintained its competitive advantage over decades while expanding its business worldwide.

Change Management, Competitive strategy, International business, Leadership, Organizational culture , Case Study Solution, Term Papers

Order a IKEA: A Furniture Dealer case study solution now

What is Change Management Definition & Process? Why transformation efforts fail? What are the Change Management Issues in IKEA: A Furniture Dealer case study?

According to John P. Kotter – Change Management efforts are the major initiatives an organization undertakes to either boost productivity, increase product quality, improve the organizational culture, or reverse the present downward spiral that the company is going through. Sooner or later every organization requires change management efforts because without reinventing itself organization tends to lose out in the competitive market environment. The competitors catch up with it in products and service delivery, disruptors take away the lucrative and niche market positioning, or management ends up sitting on its own laurels thus missing out on the new trends, opportunities and developments in the industry.

What are the John P. Kotter - 8 Steps of Change Management?

Eight Steps of Kotter's Change Management Execution are -

  • 1. Establish a Sense of Urgency
  • 2. Form a Powerful Guiding Coalition
  • 3. Create a Vision
  • 4. Communicate the Vision
  • 5. Empower Others to Act on the Vision
  • 6. Plan for and Create Short Term Wins
  • 7. Consolidate Improvements and Produce More Change
  • 8. Institutionalize New Approaches

Are Change Management efforts easy to implement? What are the challenges in implementing change management processes?

According to authorlist Change management efforts are absolutely essential for the surviving and thriving of the organization but they are also extremely difficult to implement. Some of the biggest obstacles in implementing change efforts are –

  • Change management efforts are made when the organization is in dire need and have fewer resources. This creates silos protection mentality within the organization.
  • Change management is often a lengthy, time consuming, and resource consuming process. Managements try to avoid them because they reflect negatively on the short term financial balance sheet of the organization.
  • Change efforts are often targeted at making fundamental aspects in the business – operations and culture. Change management disrupts are status quo thus face opposition from both within and outside the organization.
  • Change efforts create an environment of uncertainty in the organization that impacts not only the productivity in the organization but also the level of trust in the organization.
  • Change efforts are often made by new leaders because they are chosen by board to do so. These leaders often have less trust among the workforce compare to the people with whom they were already working with over the years.

IKEA: A Furniture Dealer SWOT Analysis, SWOT Matrix, Weighted SWOT Case Study Solution & Analysis

How you can apply Change Management Principles to IKEA: A Furniture Dealer case study?

Leaders can implement Change Management efforts in the organization by following the “Eight Steps Method of Change Management” by John P. Kotter.

Step 1 - Establish a sense of urgency

What are areas that require urgent change management efforts in the “ IKEA: A Furniture Dealer “ case study. Some of the areas that require urgent changes are – organizing sales force to meet competitive realities, building new organizational structure to enter new markets or explore new opportunities. The leader needs to convince the managers that the status quo is far more dangerous than the change efforts.

Step 2 - Form a powerful guiding coalition

As mentioned earlier in the paper, most change efforts are undertaken by new management which has far less trust in the bank compare to the people with whom the organization staff has worked for long period of time. New leaders need to tap in the talent of the existing managers and integrate them in the change management efforts . This will for a powerful guiding coalition that not only understands the urgency of the situation but also has the trust of the employees in the organization. If the team able to explain at the grass roots level what went wrong, why organization need change, and what will be the outcomes of the change efforts then there will be a far more positive sentiment about change efforts among the rank and file.

Step 3 - Create a vision

The most critical role of the leader who is leading the change efforts is – creating and communicating a vision that can have a broader buy-in among employees throughout the organization. The vision should not only talk about broader objectives but also about how every little change can add up to the improvement in the overall organization.

Step 4 - Communicating the vision

Leaders need to use every vehicle to communicate the desired outcomes of the change efforts and how each employee impacted by it can contribute to achieve the desired change. Secondly the communication efforts need to answer a simple question for employees – “What it is in for the them”. If the vision doesn’t provide answer to this question then the change efforts are bound to fail because it won’t have buy-in from the required stakeholders of the organization.

Step 5 -Empower other to act on the vision

Once the vision is set and communicated, change management leadership should empower people at every level to take decisions regarding the change efforts. The empowerment should follow two key principles – it shouldn’t be too structured that it takes away improvisation capabilities of the managers who are working on the fronts. Secondly it shouldn’t be too loosely defined that people at the execution level can take it away from the desired vision and objectives.

IKEA: A Furniture Dealer PESTEL / PEST / STEP & Porter Five Forces Analysis

Step 6 - Plan for and create short term wins

Initially the change efforts will bring more disruption then positive change because it is transforming the status quo. For example new training to increase productivity initially will lead to decrease in level of current productivity because workers are learning new skills and way of doing things. It can demotivate the employees regarding change efforts. To overcome such scenarios the change management leadership should focus on short term wins within the long term transformation. They should carefully craft short term goals, reward employees for achieving short term wins, and provide a comprehensive understanding of how these short term wins fit into the overall vision and objectives of the change management efforts.

Step 7 - Consolidate improvements and produce more change

Short term wins lead to renewed enthusiasm among the employees to implement change efforts. Management should go ahead to put a framework where the improvements made so far are consolidated and more change efforts can be built on the top of the present change efforts.

Step 8 - Institutionalize new approaches

Once the improvements are consolidated, leadership needs to take steps to institutionalize the processes and changes that are made. It needs to stress how the change efforts have delivered success in the desired manner. It should highlight the connection between corporate success and new behaviour. Finally organization management needs to create organizational structure, leadership, and performance plans consistent with the new approach.

Is change management a process or event?

What many leaders and managers at the Ikea's Ikea fails to recognize is that – Change Management is a deliberate and detail oriented process rather than an event where the management declares that the changes it needs to make in the organization to thrive. Change management not only impact the operational processes of the organization but also the cultural and integral values of the organization.

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Introduction to Ansoff Product Market Grid / Ansoff Matrix

In 1987, Ansoff suggested a Product / Market expansion 2 by 2 grid. The Ansoff Product Market Grid is also widely known as Ansoff Matrix. The Ansoff Matrix / Product Market grid is a framework that enables Ikea's Ikea to identify growth opportunities by leveraging both internal strengths and external opportunities. The Ansoff Product Market Grid suggests four generic growth strategies.

EMBA Pro Ansoff Matrix / Product Market Grid Solution for " IKEA: A Furniture Dealer" case study

This case describes IKEA's strategy, aiming to show how the Swedish company has developed and maintained its competitive advantage over decades while expanding its business worldwide.

Case Authors : Quy Huy, Michael Jarrett, Lisa Duke

Topic : strategy & execution, related areas : competitive strategy, international business, leadership, organizational culture, emba pro ansoff matrix solution to ikea: a furniture dealer case study.

The four generic growth strategies recommended by Ansoff Matrix are – - Market Penetration - Market Development - Product Development - Product Diversification EMBA PRO immersive learning methodology from – case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Strategy & Execution field. Balanced Scorecard Analysis, case solution, Ansoff Matrix / Product Market Grid Solution.

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Ansoff Matrix / Product Market Grid IKEA: A Furniture Dealer

What is Market Penetration in Ansoff Matrix? How to use Market Penetration Strategy in IKEA: A Furniture Dealer analysis?

Market penetration strategy is used by an organization when it has potential to grow the market share in the present industry. It involves sales driven approach in the present environment. Market penetration can be achieved through – increasing sales touch points, reaching directly to customers, improving dealer network, increasing the customer life time value, increasing the basket share of customer total spending etc. Ansoff Matrix is a competitive strategy analysis tool. Leaders at Ikea's Ikea can use Ansoff Matrix to understand- Market Penetration, Market Development, Product Development, Product Diversification strategies that Ikea's Ikea can employ in building more sustainable margins.

What is Market Development in Ansoff Matrix? How and when to use Market Development Strategy for solving IKEA: A Furniture Dealer case study?

Market development strategy involves efforts on part of the Ikea's Ikea to create new markets and channels for the current products. This may involve – entering international markets, entering new domestic markets, tying up with complimentary companies to drive sales of current products etc. One of the prominent example of Market Development is – How Tesla is building recharge station at a certain distance to enable customers in new markets to use its cars

What is Product Development in Ansoff Matrix? How and when to use Product Development Strategy?

Product development involves Ikea's Ikea either adding new features to the current product or developing new products for the existing market. One of the prominent examples of organization using product development strategies is – Microsoft constant release of Windows Office Versions after specific duration of time. The customers and markets of the product largely remain the same but the company keeps launching improved version of the products to target the existing market.

What is Diversification in Ansoff Matrix? How and when to use Diversification Strategy?

Ikea's Ikea can use diversification strategies when both the product and market is new to the firm. Diversification strategy is used when an organization see an opportunity either in an adjacent industry or in a completely different industry. For example Microsoft entry into the gaming industry with Xbox. Both the product and consumer segment are new to the firm and it had to build a completely different distribution and revenue model from the one it was using to do Enterprise Productivity business.

Four strategies in Diversification Quadrant for IKEA: A Furniture Dealer Case Study

Horizontal diversification – when new (technologically unrelated) products are introduced to current market Vertical integration – when an organization decides to move into its supplier’s or customer’s business to secure supply or firm up the use of its products in end products Concentric diversification – when new products closely related to current products are introduced into (new) markets Conglomerate diversification – when completely new, technologically unrelated products are introduced into new markets

5C Marketing Analysis of IKEA: A Furniture Dealer

4p marketing analysis of ikea: a furniture dealer, porter five forces analysis and solution of ikea: a furniture dealer, porter value chain analysis and solution of ikea: a furniture dealer, case memo & recommendation memo of ikea: a furniture dealer, blue ocean analysis and solution of ikea: a furniture dealer, marketing strategy and analysis ikea: a furniture dealer, vrio /vrin analysis & solution of ikea: a furniture dealer, pestel / step / pest analysis of ikea: a furniture dealer, case study solution of ikea: a furniture dealer, swot analysis and solution of ikea: a furniture dealer, references & further readings.

M. E. Porter , Competitive Strategy(New York: Free Press, 1980) Quy Huy, Michael Jarrett, Lisa Duke (2018) , "IKEA: A Furniture Dealer Harvard Business Review Case Study. Published by HBR Publications. O. E. Williamson , Markets and Hierarchies(New York: Free Press, 1975) Barney, J. B. (1995) "Looking Inside for Competitive Advantage". Academy of Management Executive, Vol. 9, Issue 4, pp. 49-61

Kotler & Armstrong (2017) "Principles of Marketing Management Management", Published by Pearson Publications.

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News | RUSSIANS FLOCK TO IKEA AS STORE BATTLES MOSCOW

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Chicago Tribune

Talk about pent-up demand.

On the day Russia’s only Ikea store opened in suburban Moscow, the wait to get in took an hour. Highway traffic backed up for miles. More than 40,000 people crammed into the place, picking clean sections of the warehouse.

Now, more than a month after opening, the housewares and furniture store founded in Sweden still pulls in nearly 100,000 people a week, company officials say.

Ikea has big plans for Russia. A half-dozen stores are on tap in Moscow and beyond. Company officials dream of placing Ikea’s simple shelves, kitchens, bathrooms and bedrooms in millions of Russian apartments that have not been remodeled since Soviet days.

Yet Ikea’s entrance into Russia has been rocky.

Like many foreign investors, Ikea struggled with crushing bureaucracy, a Byzantine legal system and economic uncertainty. Missteps and false starts, wrangles over land, leases, import tariffs and even marketing have frustrated company officials for years. Even today, Ikea is embroiled in a zoning dispute with the City of Moscow.

Still, the people continue to come.

“This is kind of like an excursion for us,” said Alla, a florist in her 20s. “We’re not looking for anything in particular. We just want to see it.”

In size and mission, Ikea is unlike any other store in the country.

Ikea is targeted at a middle class that is struggling to take shape in Russia. Its products–simple, sturdy furniture and housewares at reasonable prices–are not commonly found in a nation where many stores concentrate on either high-priced goods for the rich or cheap stuff for the masses.

The prices, in fact, are remarkably low for Moscow. Ceramic mugs for 15 rubles, or about 50 cents. Giant floor plants for $30. A bathroom set with vanity, mirror and shelf for about $250.

Perhaps accustomed to the sky-high prices of imported articles in Moscow boutiques, some shoppers were unsettled on the store’s first weekend. They pulled staff members aside, wondering why the prices were so high.

At first alarmed, store personnel soon figured out that some people thought the prices were marked in U.S. dollars instead of Russian rubles.

The ruble trades at about 28 to the dollar. A bookcase that a shopper had believed cost $600 really cost only $22.

“We spent the first weekend writing the word `ruble’ on all the price tags,” said Lennart Dahlgren, Ikea’s general director in Russia.

Ikea also emphasizes customer service, still a foreign concept in many Russian stores. Its 440 Russian employees were whittled from 16,000 applicants. Supervisors and so-called “core employees” were trained in Ikea stores abroad.

Ikea offers free shuttle service from several Metro stops. It has a playroom for children. It serves coffee to those who show up early.

All this plays into the still small but growing expectations of Russian consumers.

“There is a lot of variety in Moscow now, a lot more than there was,” said 30-year-old Natasha. “But you have to go from place to place to get everything. It is nice to have these big stores.

“I like these hypermarkets, where you can get yogurt, soil for your garden and, excuse me, toilet paper, all at once.”

Indeed, Ikea is trying to entice other merchants–a supermarket, for example, and an electronics store–to build on its 120-acre site. Ikea has a 98-year lease on the land with an option to buy should Russia ever allow such land sales.

Ikea, which is privately held, is expanding aggressively. The company has doubled in size every four years for the past three decades, Dahlgren said. It has targeted former eastern bloc nations such as Poland and Hungary, but Russia is the first country in the former Soviet Union with an Ikea.

The opening was a long time coming. Even during Soviet times, Ikea officials wanted to open a store in Russia. After the fall of the USSR in 1991, they tried again only to pull out amid Russia’s hyperinflation and economic uncertainty of the early 1990s.

Ikea returned in 1997 for discussions with Moscow Mayor Yuri Luzhkov. But Dahlgren said the city demanded lease rates that would have made the project economically impossible. So Ikea moved to Khimki, a suburb on Moscow’s northern edge.

The store sits just off the Leningrad Highway, the road to the Sheremetyevo airports, about 12 miles north of Moscow’s center.

Ikea, with the urging of Khimki officials, wants to build a bridge over Leningrad Highway to ease traffic to the store. But Moscow City Hall, which controls the highway, has blocked construction.

Luzhkov’s team says the bridge would obscure the view of a Tank Trap monument that marks where Russian troops stopped the Nazis in World War II. Ikea says Moscow’s real motivation is to punish Ikea for not locating within city limits.

Some observers view Ikea’s fight with Moscow as a cautionary tale for foreign investors. It’s not so simple, however.

Ikea made mistakes of its own, such as failing to research the bridge issue enough to find out that Moscow, not Khimki, controls Leningrad Highway. And Dahlgren says Russian officials have been willing to work with Ikea to make its $100 million investment work.

Russian officials granted Ikea a customs exemption that made Ikea’s imports economically feasible, although tariffs of about 28 percent (compared with about 3 percent in Europe and North America) will have to come down for Ikea to prosper in Russia, Dahlgren said.

Ikea also must grow to be profitable in Russia, Dahlgren said. Ikea does not make much money off each item it sells, so it has to sell a lot. To do that, it needs more than one store. It needs several.

New stores would bring profits to Ikea, tax monies to Moscow and the federal government and long-envied choices to the Russian public.

But first, Ikea and Moscow must find a way to bridge their gap.

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  2. IKEA: A Furniture Dealer

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  19. The Paradox of Business in Russia

    This, then, has become the paradox for IKEA in doing business in Russia. Although there is clearly a high level of demand for their products and the lifestyle that the company portrays as part and parcel of the IKEA experience, only one of the fourteen stores has ever opened on schedule due to repeated issues with permits and construction woes.

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    IKEA didn't cooperate with these conditions, so they business process was made difficult. For example, their first store was supposed to be opened in Moscow city, however, the local government demanded So they have opened it in Khimki city. The building process was going great, but when the day came to open the store, local utility department suggested that they make a contract with the ...

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