Transcript: Lower costs (electricity, employees, rent) Increasing sales: the world is the marketplace Decreasing inventory costs > just in time inventory control Downloadable 3D modelling application Online account, personalized shopping lists Management IKEA experience LIMITATIONS North America: E-selling - established conventional retailers, $150 billion a year for Internet sales of home furnishings Europe: preserve IKEA stores and new store locations with high accessibility, but review delivery policy Implement more promotion through social networks and viral marketing Consumer IKEA at a glance: FY 2010 In the hyper competitive world of retailing, can IKEA reach its growth and revenue goals focusing only on the in-store experience without online sales? SUGGESTIONS Consumer Make redundant existing stores Website maintainance More complicated post-purchase services Against IKEA's culture Competition with existing e-retailers Annual sales figures in billion Euro BUSINESS IDEA BENEFITS Limited selection of products Can't see/touch/try No in-store experience (food) No human interaction Potential lack of security and fraud Management 24/7 shopping Less travelling Empowerment - not uni-directional Direct links to customer reviews Delivery service "To offer a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them." Real choices at IKEA Sales per region 1. WEBSITE/COMMERCIALS 2. CATALOGUE: 70% of annual marketing budget - 61 different editions in 21 languages for 26 countries 3. STORE: "lifestyle" themes, "everything under one roof", most of it available for immediate take away 4. IKEAFANS.COM IKEA group stores worldwide
Transcript: 1. Designers 2. Field Technicians 3. Packaging Technicians Works Cited Admin. “Ikea Marketing Strategy.” Just Great DataBase, 14 Sept. 2017. “About the IKEA group” Ikea. 2016. “DEMOCRATIC DESIGN.” Ikea. 2016. Gillies, Trent. “As Brick and Mortar Retailers Retrench, IKEA Sticks to Basics—and Commits to US Growth.” CNBC, CNBC, 16 Jan. 2017 “IKEA Group Approach to Sustainability” Ikea. 2011. Ikea group yearly Summary FY 08- FY 16. Ikea official, retried on 22 Oct. 2017. “Ikea on the Forbes World's Most Valuable Brands List.” Forbes, Forbes Magazine. “IKEA UK Business Results 2016.” IKEA Jurevicius, Ovidijus. “IKEA SWOT Analysis 2013.” Strategic Management Insight, 16 Feb. 2013. Lee, Dami. “Ikea Place Is an AR App That Lets You Put Furniture on the Street.” The Verge, The Verge, 20 Sept. 2017 Lu. “Ikea Supply Chain- How Does Ikea Manage Its Inventory.” Tradegecko. 23 Apr. 2014. Perry. “Ikea: Cutting Costs, Creating Value.” Technology and Operations Management, 5 Dec. 2015. Rosenberg, Eli. “Ikea Recalled Millions of Dressers That Were Killing Toddlers. This Family Found out Too Late.” The Washington Post, WP Company, 20 Oct. 2017. Roy. “Ikea Supply Chain Management.” LinkedIn. 28 Aug. 2015. “Sustainable Development Goals.” United Nations, United Nations, www.un.org/sustainabledevelopment/sustainable-development-goals/. “The IKEA Group Approach to Sustainability.” Ikea, 2011. Times, The Irish. “Factbox: IKEA’s Complex Structure.” The Irish Times, The Irish Times, 15 Apr. 2016 Turula, Tom. “IKEA Is Transforming into a Full-Fledged Tech Company – Starting with Its New Apple and Amazon Partnerships.” Business Insider, Business Insider, 9 June 2017 Walgrove, Amanda. “How Ikea Became Kings of Content Marketing — The Content Strategist.” The Content Strategist, 7 Nov. 2014. - Organic foods - Water consumption - Recycling in production - Traditional Swedish dining experience - Småland -In-store logistics personnel -Others Product Design - long term contract - Minimize material Agenda Logistics System (Customer service) Background Marketing Financial Competition Growth Strategy Conclusion Q&A Inventory -Distribution centers Doncaster, UK -“High flow vs Low flow” automatic vs human Marketing Prices kept low with great value due to: Strong supplier relationships Lack of Delivery Flat Box Assembly Packaging Sustainable Resources Branding - Held by INGKA - HQ: Leiden Netherlands - Retail and factories -Large stores: 9500 products -Realistic room -Self-served “cost per touch theory” A n d r e w, E m m y, S e l i n a, T e d d y “Forbes Magazine ranks Ikea at #41 for the most valuable brand in the world, with a value of 13.5 billion dollars.” Huge Stores with interactive displays Childcare Providers Swedish Dining 409 Stores in 49 countries - Strength: Target Market -Weakness: Reputation -Opportunity: e-Commerce Push to sell on Ecommerce sites testing begins in 2018 Apple collaboration Vision Conclusion Environmental Policy Q & A Traditional Sale, Coupon, Membership Advertising 300 page Catalog produced in 28 countries Home Design App Pinterest Boards - CEO - Peter Agnefjäll - CFO - Alistair Davidson - COOS - Steve Howard Structure Financial Introduction SWOT Analysis Company History - Mid 70s, branched out - Europe, North America, Asia - Now over 400 stores Apple Partnership "Ikea Place" Place Equality half of the management roles are held by women Dresser recall full refund/anchoring kits Retailing Increasing Storefronts Brand of its own Similar customers inexpensive furniture Company Growth C-Suite Restaurant and Kids Play Area Promotion “Alarcón & Harris - Press Releases - Comunicados De Prensa.” Alarcón & Harris - Press Releases - Comunicados De Prensa, www.alarconyharris.com/_prensa/allison_transmission/_allison_indexeng.htm. “Amazon.” Amazon, advertising.amazon.com/ad-specs/en/policy/brand-usage. cdn.thepennyhoarder.com/wp-content/uploads/2017/07/10140000/IkeaFood0011.jpg. charlottebusinessresources.com/event/latin-american-chamber-of-commerce-of-charlotte-small-business-expo/?instance_id=6265. www.cnn.com/2017/04/19/style/balenciaga-ikea-bag-trnd/index.html. “Design Indaba.” Design Indaba, www.designindaba.com/tags/ikea. Fingas, Jon. “Engadget.” Engadget, 12 Sept. 2017, www.engadget.com/2017/09/12/ikea-place-augmented-reality-app/. “Haiku Deck: Presentation Software and Online Presentation Tools.” Haiku Deck: Presentation Software and Online Presentation Tools, www.haikudeck.com/educ-514-photo-shots-education-presentation-BpeXHXLnis#slide9. Head, Sleepy. “Pinterest.” Pinterest, 17 Dec. 2015, www.pinterest.com/pin/67976275603732590/. “Home Goods.” Home Goods, newsroom.homegoods.com/media-gallery/logos/. “IKEA FI/FI.” IKEA FI/FI, www.ikea.com/fi/fi/catalog/categories/departments/living_room/tools/coli/roomset/20171_cold01a. “IKEA.com – International Homepage – IKEA.” IKEA.com – International Homepage – IKEA, www.ikea.com/ms/zh_CN/virtual_catalogue/online_catalogues.html.
Transcript: shop for middle-class people IKEA is... ''long way'' low prices + flat pack 1948-started furniture business 212 THANK you for your attentIon! IKEA DUKTIG (meaning: good, well-behaved) is a line of children's toys OSLO is a name of a bed BILLY (a Swedish male name) is a popular bookcase farm, where he grew shops in % bln euro per year the economy must be economical IKEA's success are = 44 low price IKEA growth of sales by Headquarters K IKEA is... Garden furniture: Swedish islands, Bedlinen, bed covers, pillows: flowers, plants, Bathroom articles: Scandinavian lakes, rivers and bays Beginning of success E ,last name countries employees 7,7 44 % SpecIal namIng system: ELMTARYD LOGO KAMPRAD AGUNNARYD is a GREEN company IKEA is... 1926 year I INGVAR sales low cost Beginning of success CHEAP or it must be cheap 9000 more Delft, South Holland By Kseniya Proskuryakova is a charitable organization % 1943-the 1st IKEA was founded 100 000 furniture A domestic accessories beginning of the story and birth of the founder IKEA is... 24,7 titles of goods small village near farm CONVeNIENCE 56 ,first name
Transcript: As his business grew, he expanded to selling fish, seeds, Christmas decorations and eventually, pencils and ballpoint pens which were a new phenomenon in 1935. In 1943, with a gift from his father, he established his business, using his initials, Ingvar Kamprad, the name of the farm on which he was born, Elmtaryd and the village nearby, Agunnaryd for the acronym. By 1945, the first advertisements for IKEA began showing up in local newspapers and he had developed a catalog. It wasn't until 1951, that he began to focus only on furniture, and discontinued all other products from the IKEA`s product range. October 7th 1953. The first mobile IKEA opened in 1953, in Almhult, Smaland. In 1956, IKEA began testing the concept of flat pack to reduce costs through reduced transportation expenses, lowered storage space requirements, decreased transportation damage and reductions in labor costs. The first IKEA furniture catalog was published that same year. Germany remains IKEA's largest market today. In 2008, Ikea made 285 stores in 36 countries, with an additional 26 stores to be opened in 2009 and is the world's largest furniture manufacturer. October 7th 2009. IKEA had 267 stores in 25 countries. October 7th 2011. The biggest IKEA opened in Canada. IKEA Oct 7 1920. IKEA was originally founded in sweden by Ingvar Kamprad. In the 1920's,(when he was 7) he would go around and sell toys, this was when he first started his career.
Transcript: IKEA: Ingvar Kamprad Elmtaryd Agunnaryd IKEA’s Partnership with UNICEF “The more we learned, the more we understood we had to tackle child labor as a much larger problem.” -Marianne Barner, IKEA’s children’s ombudsman Changing mind-sets of whole communities, not just the behavior of our suppliers. Working in partnership with experts on community involvement Working Through its suppliers "No Child Labor" clause to all of its supply contracts Factory visits/audits The Initial Problem, the Initial Response: 1994: Some of its rugs using child labor Amend its purchasing contracts with supplies worldwide Any evidence of using child labor would lead to immediate contract termination Reject an invitation to join the Rugmark Consortium Furniture Cooking accessories Home decor Tools and hardware Lamps and lighting Appliances Children's toys Food In-Store Restaurant Daycare Centers Store-to-Home Delivery New Level of Commitment Beyond Control, Toward Prevention Funding to allow UNICEF to significantly expand its effort to get children into schools as part of a broader attack on poverty in the carpet belt. IKEA’s bringing credibility and influence on the major buyer of carpets in the region. The objective: give children the opportunity to obtain an education Setting up alternative learning centers (ALCs) designed to act as “bridge shools” Launching the idea of self-help groups among women What is Child Labor? Problems with Child Labor This refers to a type and intensity of work that hampers children's access to education, damages their health, their development within their families, and deprives them of their childhood or their self-respect. Implementing the Program Solutions? Journalists who want simple answers and quick responses Within the company - invite to send two representatives for a 10- day educational tour of the company’s Indian suppliers “Inter IKEA Systems B.V. - Welcome”, IKEA Franchisor Information. 2003. Accessed 21 Feb 2012. <http://franchisor.ikea.com/index.asp>. “Home furnishings, kitchens, appliances, sofas, beds, matresses - IKEA” IKEA Homepage. 2011. Accessed 21 Feb 2012. <http://www.ikea.com/us/en/>. "Business and Child Labour Management Primer”, Shell. <http://www.shell.com/static/envirosoc-en/downloads/management_primers/business_and_child_labour_primer.pdf>. Bartlett, Christopher A., and Paul W. Beamish. Transnational Management: Text, Cases & Readings In Cross-Border Management. sixth. New York: McGraw-Hill/Irwin, 2009. 1943: Ingvar Kamprad founds IKEA in his hometown of Agunnaryd 1945: First IKEA ad 1948: Furniture added to IKEA's products 1951: First IKEA catalog 1956: Self-assembly flat packs introduced 1958: First IKEA store opens in Almhult 1961: Contracts begin with Polish distributers 1963: First store opens in Norway 1965: First store opens in Stockholm 1973: First store opens outside of Scandinavia, in Spreitenbach, Switzerland 1985: First store opens in the U.S. Job 9: to take responsibility for our suppliers, their co-workers, and for the environment IWAY: set IKEA’s expectations of its suppliers regarding environmental responsibilities and working conditions Upgrading auditing and compliance process to enforce IWAY - More regional auditors - Using third-party external auditors - Frequent full IWAY audit Strict rules on using child labor Bonded labor Poor enforcement of labor laws Poor data on child labor statistics Working in the home Any Questions? Financial Limit offshoring production to countries that have had a record of child labor violations. Nature and Causes of Child Labor The Reaction: Doubts and Questions References Red: Almhult, location of the first IKEA Blue: Agunnaryd, Ingvar's hometown “To create a better everyday life for the many people.” Products Locations History Allowing Rugmark and associated foundations to investigate factories for child labor violations and sell only approved goods Hiring outside agencies to investigate factories Case: Indian Rugs and Child Labor Thank you for listening! 80% of the unschooled children now attending primary school all of remaining 20% attending one of the 103 ALCs
Transcript: Secondary Research Brazil: Government policy, market structure, competitors, trends, market share India: Local sourcing, infrastructure, market share of competitors Qualitative Individual Interviews Brazil: In Portuguese, 50 respondents India: In English, 50 respondents Quantitative Survey Administered by Interviewers Brazil: In Portuguese, 2500 respondents India: In English, 2500 respondents More Analysis Product Specific Barriers to entry; Consumer attitudes and opinions; Competitive advantage in these markets; Potential target markets. IKEA requires information regarding market conditions as well as consumer attitudes and behaviours. Brazil: No DYI culture Custom furniture India: Family hierloom furniture Market Size, Trends and Dynamics Phase 2 India Research Methodology Brazil: Custom and traditionally constructed India: Big retailers moving into the market PEST Analysis Not many other large scale furniture retailers in Brazil Growth 20-30% annually New home construction Hospitality growth Shifting attitudes of new generation Growth More research required Frequencies, Segmentation, Extreme Reactions Secondary data will further add to data collected to date Primary data will assess specific attitudes towards IKEA and IKEA's business model this will be used to inform final decision and for future marketing initiatives partnerships with reputable research firms, strong methodology will help ensure validity verified through comparison to secondary data Phase 3 Brazil: Qualitative Secondary Data describes current situation information can be used to prepare primary research important to ensure validity of future data evaluated based on reputation and compared to other sources Current Data Collection Methods Background Data planned for collection: Agenda Small and Medium sized enterprises Proposed Analysis By Ruth Davy Opportunities Social and Cultural Quantitative Continue with Research Plan to gather more information Focus more on India, as research thus far indicated opportunities in India are stronger Investigate altering standardization model in order to expand business into these markets Discourse analysis, Quotes, Uncover Potential Problems Problem Statement Relevance, Reliability and Currency of Data Collected Brazil: more research required India: Imported furniture represent 15-20% of organised sector Imports sourced from Europe and Asia India IKEA was founded in 1943 and currently has more than 300 stores in over 38 countries Standardized corporate culture, business model and marketing plan Customizes price and promotion media for each location Stores generally located outside major centers Target market women 20-49 with children Market Infrastructure Furniture consumption in selected Middle and Low Income countries, 2000 and 2010 Brand recognition and identification among urban high income earners Technological Political Background Research Methodology Proposed Analysis of Data Collection Market and Competitive Intelligence Opportunities Recommendations Recommendations Mystery Shopping Base Basket of Products Customer Satisfaction Index Brazil: Import tax and VAT up to 35% More research required India: FDI – Sourcing Clause Customs Import tax – 10% Data found to date: Research Plan Interior design as a service model Potential to be low cost - economies of scale Phase 1 Brazil This area needs further research Vehicle ownership - store locations TV becoming centre of home Use of technology and products different in different cultures This area requires more secondary research Both economies are growing fast Middle-class growing and becoming more wealthy Overall increase in market size in last ten years Competitors Brazil India: Objectives New Markets Economic Nine Forces Analysis
Transcript: -People would like to see the actual product first before they buy it -People make their purchases based on information and reviews on the Internet -Buying or not buying the product depends on the quality of the after purchase support -Customers are complaining of the self assembly, so they want easy instructions -People are spending most of their time on their mobile to find the best offers - With decoraters from IKEA Group 17 Thats it, whole house is from IKEA Problem Statement - Stock is not enough - Online store - Loss of buying power - Negligible switching costs Main conclusion: not brand loyal Current segmentation Age 18 - 65+ higher educated students LACK of IKEA service -Ikea will hire salaried decorators Similarity IKEA segment = Change “The only thing constant in life is change” - François de la Rochefoucauld So we invented the 'MY-IKEA- APP' AUGMENTED REALITY Objectives Customers will get higher service by after purchase support when having issues Delivery service with specified conditions The rise of smartphones is creating smarter consumers so we want to create more opportunity by smarter marketing Problem statement - Direct communication with the customer service What are the competitors doing ? With streaming video in the app, self assembly has never become so easy According to our research, IKEA forgot the fact that millions of users now search on their phone FIRST before making a buying desicion A catalog is not enough! No customer loyalty within the house furnishing market. - No shortcuts in the shop Kim Burgers 608550 Mike Wolma 601650 Burak Aydin 658968 Burak Talbu 608556 In the offers section users see immidiatly the products that are in sale Target group Every smartphone user above the age of 18 The concept Now people will see the product first in their home with IKEA has products suitable for every age - Online store - Decostyler option - Fast delivery service Building customer relationships so the customer will be a loyal customer - Upload a picture of your room and let you inspire by tips from others - The ability to see furniture of IKEA live in your own house - Customers save more time The aim of our project -The whole furniture is from IKEA Segmentation IKEA defines her customers by dividing the ‘many’ people into three life cycles: -Living alone -Living together -Living with children Objective & what about competitors? Customers will not spend more time than necessarry and they experience customer service at a high level The Ikea customer is: - Cost-aware - Practical - Simple Welcome to our presentation of IKEA Segmentation - Shops are in the city Just call IKEA Human Life Cycle Every life stage reflects the type of home and furnishing of a house IKEA has a wide range of products CONCEPT! Current IKEA products can be replaced by new IKEA products Ikea want their customers to feel as if they were at home; “it is perfectly fine to lie on a bed or to try out a sofa” - Online store Users of the app can read comments & reviews of people that already bought the product with the new interactive catalog Consumer characteristics drivers of this loyalty program - Delivery service with POSTNL The current IKEA products will be valued and this value counts as a discount for the new purchased IKEA products Benefits: - Thank you for LISTENING Ikea wants to have a bigger pie of the home furnishing market Segmentation -Leisureless people -Employees and employers -Anti-shoppers -Mass shopers IKEA cannot afford to neglect this incredible marketing medium The buying behavior process in 2012
Transcript: Low prices and strong brand identity helped IKEA weather the storm during the economic downturn. IKEA visions and values are communicated everywhere in the stores, and that allow customers being completely engaged with its culture. Ikea was founded in 1943 by 17-year-old Ingvar Kamprad Ten years later, the first forniture showroom was opened in Almulth, Scandinavia. In 1955-56 Ikea begins designing its own forniture and testing flat packages In 1958 the first Ikea store was opened In 2002 ikea group was the world’s top forniture retailer operating in 22 countries and serving 286 million customers a year our suggestion to obtain a better fit between IKEA and the US market is to improve the range of product-related services, available by paying an additional fee. this way the prices of the goods are kept low, but at the same time the customers which have no time or do-it-yourself inclination can enjoy these services and improve their overall IKEA experience this could lead also to enlarging the market segment of IKEA: in fact, by adding a complete range of services, the positioning of the products can totally change according to the type of customer. a particular kind of price discrimination. they should add other services like: -- the possibility to have the items assembled by ikea's personnel directly at your house -- the possibility to have an interior designer consultant no pressure to shop: make yourself at home HISTORY restaurants and amenities Americans are notorious for their reluctance to buy new furniture: “they change their spouse as often as their dining room table, about 1.5 times in a lifetime". wide dichotomy between low-end and high-end retailers In one sentence they should remain consistent with their brand image, while giving more options to their customers. How they faced the challenges cost efficiency and quality! within a couple of years there is the possibility that the furniture should be replaced by new ones they gave the possibility to the customers to deliver at home their purchases, by adding a little transportation fee. all these factors lead to a Americans' reluctancy to buy new furniture. all they expect from an item is to last a lifetime. key strenghts of shop experience: a real competition between suppliers and even an internal one to select designers The new product development process is overseen by a product-strategy council made of senior managers that establish priorities, based on consumer trends that they analyze globetrotting around the world IKEA’s engineers decide what materials should be used to make the product, focusing on cost efficiency as well e.g. choosing better materials for the surfaces and chipboard for the internal parts. children centres: you shop, kids play Many customers have notices that Ikea’s furniture looks really nice transport their own purchases The low prices that IKEA sets for its products are due to a specific cost efficient strategy: high quality materials on items’ surface ( what is visible to consumers) and low quality materials inside them. Moreover a stylish design is achieved thanks to competitions between the designers within the company that means, as a result, always choosing what it is best for its customers. many Americans could find this solution difficult. This occur mostly in big cities where people used to have all they need delivered at home (even food) and, in many case, don’t even have a car. Guerrilla Marketing Bondi's Beach, Sydney, Australia Partnership with the customer exactly the contrary of IKEA's selling proposition! constant to satisfy customer needs. Francesca Capo Federica Martella Giulia Massoli Taddei Costanza Sebastiani Ingo Sigulin Product strategy IKEA Case Study almost all furniture retailers offered high-level product-related services: from the delivery service, to the home assembly of the item to the carting away of the old furniture and even an interior design service! design items at a "democratic" price nice stores, focus on customer experience (restaurant, child park) and it would possibly end up with harming the customer experience in the stores, which is one of the main competitive advantages of the brand. Wide style: same product is offered of different colors or materials to appeal different customers The products are modern not trendy so they are practical enough for everyday use and they don't go out of fashion easily. they have no salesman who is going to try and pressure you to buy something. This is a self service type atmosphere, but you're not alone. People are there to help you and answer questions, but not to pressure you into a sale they are giving consumers a look at what model homes could look like with their products. This lets the consumer look and see how they can fit these ideas into their own home. They do not stop there though as many rooms are also designed in a way to let your imagination grow by showing what can be done in such a limited space Design & Production WINNING
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