Copy of IKEA

Internal Analysis

External Analysis

Threshold Resources

Threshold Competences

STEEPLE-C - Scandinavia

Porter's Five Forces

Potential Entrants - Low

Competitive Rivalry - High

Designing

Selling/Marketing

Producing

Investing

Stores

Staff

Products

Capital

Owner

Supplier Power - Low

Social:

• Furniture has aesthetic purposes as well as functional
• Strong cultural attachment to Scandinavian Products/Services.

Legal

• Employment law changes and trade barriers

Economical:

• Stable economic climate compared to rest of Europe
• Fluctuations in exchange rate against rest of Europe
• High consumption power amongst consumers
• Felt the ripple effect of the economical crisis.

Competition:

• Economical recession intensifies competition

• Market saturation
• High variable and fixed costs in production

• Fragmented market
• Customers are switching from premium to more cheaper brands
• Supermarkets selling more furniture and in-house accessories

• IKEA has the purchasing power
• Nevertheless, IKEA encourages long-lasting relationships with suppliers.

• Customers have a wide range of companies to choose
• IKEA controls this by a growth strategy

• Not many products substituting furniture and home appliances.
• People tend to spend their money on other things rather than furniture.

Buyer Power-High

Implications of STEEPLE-C

Threat of Substitutes - Medium

Scandinavian preference for domestic brands combined with recession and saturated furniture market identifies a demand for new low cost but high value products, services, and experiences.

Core Competences

Unique Resources

Management of Value Chain

Corporate Culture

Brand

Core Competence

• Management of Value Chain

Thank you for your attention

VRIO

Yes

Value?

• Has the ability to attract more customers
• Can meet the increasing competition and handle a possible decrease in sale and still have profit

Rarity?

• The form and complexity of the value chain is unique for IKEA

Inimitability?

• Has taken years to create their value chain into the complex competence it is today. For another company to replicate this, there would be large costs, difficulties and time consumption.

Organization?

• IKEA’s value chain is already well incorporated within the whole company and company structure and is a large part of the success of the company.
• Controlling the supply chain

Yes

Tips for the future

SWOT/TOWS

• Assign a leader
• Discuss before implementing an idea
• Team leaders is needed in order to take responsibility for encouraging team members
• Channel negative conflicts into task conflict (idea sharing) for the outcome of the project
• Be more time efficient and set deadlines

TOWS Matrix

SWOT

Opportunities

Strengths

Threats

• Strong market presence
• Access to capital
• Control over value chain
• Perceived value of the IKEA shopping experience

• High risk in investment
• Loss of control when Kamprad dies
• Standardized products
• Focused on low price

• Horizontal diversification
• Increased demand for co-branded products
• Recession, demand for less expensive goods

• Prolonged economic recession
• Increasing labour costs in Europe
• Increased costs of production
• Grocery companies increasing their non-food product segments

Weaknesses

Who We Are

Team type:

Task Force Model

Multicultural team members

The Belbin Roles

Elin: Implementer

Jeanne: Completer

Isabel: Implementer

Kristine: Resource investigator

Sunny: Monitor

Simon: Plant

• Mexican
• Swedish
• Norwegian
• British
• American

Elin Karlsson

Jeanne Andreani

Isabel Gonzalez

Simon Stenlund

Kristine Andersen

Sunny Gun

Complications

• Lack of Co-ordinator or Shaper to lead the group
• Lack of Team-worker to solve social problems
• No specific person to motivate and no specific person to work for a good social environment within the group

Having disagreements allowed us to focus on our ideas and communicate better. We were able to perform in a way that we fulfil the objectives of the assignment.

Key Strategic Issues

The previous analysis identified a key threat and weakness to IKEA's Scandinavian Growth Strategy.

Threat: Saturated furniture market

Weakness: Cannot open any more stores in Scandinavia

Therefore, IKEA can use their strong brand to diversify.

Conclusion

Stakeholder Map

SFA

Interest

Option 2: IKEA Hotel with JV/Partnership

Option 1: IKEA Hotel without partner

Suitability:

Medium

Suitability:

Feasibility:

High

Feasibility:

Medium

• The IKEA Experience
• Fragmented hotel market
• Brand recognition

Power

• Sufficient financial capital
• Partner’s experience in the hotel industry
• Quality resources to furnish hotels
• No need to invest time establishing network infrastructure

• Have sufficient internal capital
• Have resources to furnish hotel
• Lack experience in the hotel industry

• Cost leadership
• Low prices
• Brand recognition
• The IKEA experience
• Fragmented hotel market

• A new way to have the IKEA experience
• New source of income for the owners
• Creates new opportunities for employees, management, and suppliers

Acceptability:

High

Acceptability:

• Scandinavian customers want to use/buy domestic products
• New source of income
• Profits will be divided between IKEA and its partner
• Share of costs and risks
• Creates new opportunities for managers

Option 3: IKEA increasing food product range

Suitability:

High

• Identified the threat of non-food products sold by supermarkets
• Loyal customer base

Feasibility:

High

Acceptability:

High

• Sufficient financial capital
• Skills: already sell food items.
• Technology: already have highly efficient stock management systems and fast distribution channel
• Opportunity cost between new food items and existing product shelf space

• Meets customer grocery needs
• Adds to customer experience through the one-stop-shop experience
• Increased revenue