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Ikea Case Study

MGMT 315
by

Suman Dada

on 13 September 2012

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Transcript of Ikea Case Study

Greta, Isabelle, Suman Case Study: Ikea Ikea Basics *Est. 1934
*Swedish home products retailer
-Low-cost provider
*Once a “a one man mail order company”(94).
*Sustainability efforts
*MNE
-Regional, not global 4 basic areas:
*Range strategy
-Today 9,500 products
*Product development
*Production
*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
-Cultural Differences
-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
*Children
*Food products & restaurants
*Adaptability to foreign markets
-U.S. preferences vs. Swedish designs
Full transcript