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Ikea Case Study
Transcript of Ikea Case Study
*Swedish home products retailer
*Once a “a one man mail order company”(94).
-Regional, not global 4 basic areas:
-Today 9,500 products
*Supply & Retail *From matches to furniture
*Competition within Sweden? IKEA’s reaction
*Assemble-it-yourself was not always the case
-Employee’s fear changes packaging forever Uniqueness behind IKEA Diversifying IKEA Is Ikea an MNE? *Over 50% sales located in home region (Europe)
*287 stores located in 41 Countries
*Suppliers located in 53 countries Firm Performance *Gross Margin decreased to 44.2%
*Net Income increased by 10.3%
*Plan to invest EUR 3 billion in stores, factories, and retail centers in 2012 Internationalization
Process *Low-cost Supply:
-Sought help from Polish manufacturers in ‘50s and ‘60s
-Today suppliers located in 53 countries
*Reductions in Logistics
-IKEA builds stores around central warehouses
-Example: Entered US market with 4 stores in Philly/DC/New Jersey area *First international store in Norway opened 1963
*Focused on Europe in 1960s and ‘70s
*First American store opened in 1985 Internationalization Ikea & The Triad Ikea is a Home Triad Region Company Regional versus
Global Strategies Firm Specific Advantages -Liability of Foreignness
-Using Internal Strengths for improvement
-Improved Problem solving
-Adaptation Case Study: Questions 1. What are the core competencies?
2.Recommendation for Diversification
3. How did Ikea expand internationally? *Product variety & geographic expansion
*New materials & designs
-E.g. OGLA chair
*Food products & restaurants
*Adaptability to foreign markets
-U.S. preferences vs. Swedish designs