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IKEA

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Karen Leaf

on 19 November 2012

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Transcript of IKEA

Introduced in Hong Kong in the early 1980s. Mission Statement IKEA IKEA Background The world's largest furniture retailer that designs and sells ready-to-assemble furniture.

Found in Sweden in 1943 by Ingvar Kamprad.

Retailer : More than 267 in 65 countries
Employees : More than 127,000 Hong Kong Market Called IKEA Furniture, and then changed into IKEA Home Furniture in 2010. Three retail stores in Hong Kong:
Shatin, Causeway Bay and Kowloon Bay. Large popularity ; Growing tendency of revenue. Produce various types of appliance and furniture with both modern architectural design and simplified eco-friendly interior design.
Create better life for people. SWOT Analysis Strength Weakness Opportunity Threat IKEA PEST Analysis Political Economic Social Technological Located in more than 60 countries
Have a northern-european background of its design, actual origins of productions are all over the world
Conserving rainforest campaign
Hong Kong: No retail sales tax
Free trade market Cost minimization in production, storage, transportation, and packaging
Cafe and restaurant are located inside the IKEA store(s), providing value meals of price-worthy quality
Discounts/ Low price despite rapid inflation IKEA furniture is stylish, simple yet unique
Family-friendly shopping environment (child-friendly shopping cart, children playground, car park etc)
Products targeting at children -> stuffed toys, colorful eating utensils, home decorations interactive online catalog
IKEA smart phone app (technological marketing)
Interior design online tool -> help customers to decorate home with IKEA furniture
Online shopping 1. IKEA's company culture

2. Product: wide range, reasonable price with relatively high quality and well designed

3. Service: satisfying service; IKEA's completed shopping system (After sale service etc) IKEA Porter's
Five Forces Group 3 - MGNT1020H IKEA Competitors Analysis IKEA Challenges 1.How to manage the increasing cost
while keeping prices low

Labor cost: minimum wage

prices of raw materials

manage the ever-increasing cost. 2.How to better utilize space to display products in Hong Kong

High land cost

utilize space more effectively 4. How to satisfy
eco-conscious consumers

Environmentally friendly products

Improve brand image

Socially& environmentally responsible

positive perception IKEA Strategy
Analysis IKEA Strategy
Plan Q&A Thank You! Group 3 Group 3 1. expand CSR

-> develop new CSR ideas to promote company's image, eg, hire mentally/ physically challenged employees; work with local charities

-> donate furniture to underprivileged families. 2. e-marketing

-> develop full and user-friendly catelogs;
update IKEA mobile app frequently;
develop IKEA games

-> eg, interior designing game/app,
color matching game etc. 3. Open outlet store

-> open IKEA outlet at low-rent locations, eg east Kowloon industrial area/ Taiwai

-> sell outdated, slightly-defected product at very low price. (profits donate to local charities?)

-> easy transportation to major IKEA stores (east Kowloon -> Kowloon bay store, Taiwai -> Shatin store)

-> promote flow of customers. 4. Shopping experience

-> Set up and broadcast "IKEA radio channel"
inside the store
(reference to ParknShop radio at HK)

-> broadcasting
up-to-date discounts, promotions, music etc

-> increase customers incentives. 5. constant staff training

-> upgrade customer service quality

-> helpful + polite + smile

-> create a more delightful shopping experience. Concept and History IKEA :
Create a better everyday life for the many people
Sweden 1943
First Hong Kong IKEA store in 1975 Pricerite:
Style, Quality, Affordability, Practicality
Hong Kong 1986 Franc Franc:
Casual, Stylish
Japan 1992 Markets IKEA: Europe, North America, Middle East, Asia Pacific, Caribbean (IKEA has 267 stores in 65 countries)

Franc Franc: Mainland China, Hong Kong, Japan, Korea, Singapore

Pricerite: Hong Kong IKEA:
Causeway Bay, Shatin, Kowloon Bay

Pricerite:
33 stores in Hong Kong Franc Franc:
Causeway Bay ShopFestival Walk Shop Homesquare ShopFranc Franc La BoutiqueFranc Franc The PostFranc Franc OUTLET Branches in Hong Kong Shop Design IKEA
Maze-liked with furniture
place in different settings

Franc Franc
Funky, colourful and modern designs ,small

Pricerite
Simple, neat and tidy Mainland Market 11 retailer stores located in big cities with growing popularity.

Become one of the most important business growth points in IKEA.

Play a more and more decisive role in the global strategy of IKEA. - Delegating and accepting responsibility
- Dare to be different
- Strive to meet reality
- Cost conciousness Survey
results Inconvenience caused by the tortuous route
Too few shops in Hong Kong, far from satisfied
Unsatisfying location, needing more consideration -Packing in less materials -Giving online tips 1.A growing demand for greener products -Select, pick up ,transport, assemble themselves -Customers: - using leftover materials from the production of one product -using production capabilities from other area -Designers: 2.A growing demand for low priced products 3. The product of mass positioning are more fit for customer demand of the main body of the ordinary people 3.Sharpening the supply chain 2.Impact of economic slowdown in major markets 1.Challeges in creating the local touch Product Pricerite IKEA Franc Franc Product Design Pricerite
$15~20 IKEA Product Price Franc Franc Catalog Online Purchase Facilities IKEA restaurant
Restaurant and café can be found inside the IKEA stores which provide high quality good value healthy meal
Relaxed and casual atmosphere

IKEA Bistro
Bistro is a western snack shop where you can enjoy variety of beverages, snacks at family-friendly prices. Restaurant and Bistro Swedish Food Market The whole range of Swedish traditional specialties can be found in IKEA Swedish food shop
For examples: Chocolates, biscuits, meatballs, pizza slice, potato crisps, frozen salmon, beer, sause……
Swedish food imported directly from Sweden with top-notch Swedish quality IKEA offer a range of games to develop the hand-eye coordination for kids, so they can play while their parents shopping
Free of charge Kid-friendly facilities IKEA has no main competitor in Hong Kong.
In term of brand location, it was found that over 85% participants claimed that IKEA was their first choice when purchasing furniture.
IKEA have a relatively large market share in local furniture industry All in all... Growth Strategy 1. growing retailer stores in expanding range of countries


2. growing range of products covering different areas Cost Leadership Strategy 1. separate “good costs” (productive investments) from “bad costs”(unnecessary expenses).

2.make structural changes
lowering operational costs
reducing administrative expenses
developing a better-functioning supply chain
Higher Cost
- Higher land price
- Greater demand of service, which contradicts IKEA's cost leadership

Lower Demand
- Brand Image Miscarried
- Lower purchasing power
currency exchange + universal pricing IKEA's Market in Mainland China Conclusion - Strong business despite challenges
- A successful top-in-mind image
- High market share - No major competitor
- Should enhance shopping experience and customer service to further expend the business Reference http://en.wikipedia.org/wiki/IKEAStrategy + Business “How IKEA Reassembled Its Growth Strategy” BY DENIZ CAGLAR, MARCO KESTELOO, AND ART KLEINERhttp://library.books24x7.com.easyaccess1.lib.cuhk.edu.hk/toc.aspx?site=MRFQH&bookid=44121http://businesscasestudies.co.uk/ikea/swot-analysis-and-sustainable-business-planning/introduction.htmlhttp://www.jamulblog.com/2006/09/ikea-threat.htmlhttp://www.pricerite.com.hk/http://www.francfranc.com.hk/eng/index.aspxhttp://www.ikea.com/hk/en/Dahlvig, Anders. "Chapter 6 - Creating a Unique Product Range". The IKEA Edge: Building Global Growth and Social Good at the World's Most Iconic Home Store. McGraw-Hill. © 2012. Books24x7.
Dahlvig, Anders. "Chapter 4 - The Environmental Agenda". The IKEA Edge: Building Global Growth and Social Good at the World's Most Iconic Home Store. McGraw-Hill. © 2012. Books24x7. 2.How to better utilize space to display products Challenges of IKEA 4. How to satisfy those eco -conscious consumers Challenges of IKEA Sub-group A:
Jessica,ZOU Yuxi
Karen,Yip Ho Ka
Tim,Yang Yuanhang
Bella,Zhang Boya Sub-group B:
Gloria,Chan Yuhang
Amber,Lin Yan
Jill,Chan Wing yee
Dora,Law Yee Chien Strategy Plan for
Hong Kong Market Karen Karen Karen Karen Dora Dora Dora Dora Dora Dora Dora Dora Dora Dora Dora Dora Dora Jill Jill Jill Jill Jill Jessica Jessica Amber Karen Karen Karen Karen Karen Karen Karen Jessica,ZOU Yuxi Tim,Yang Yuan Hang & Bella, Zhang Boya Tim, Yang YuanHang Tim,Yang Yuanhang Tim,Yang Yuanhang Tim,Yang Yuanhang Tim,Yang Yuanhang Bella,Zhang Boya Bella,Zhang Boya Amber,Lin Yan Amber,Lin Yan Amber,Lin Yan Amber,Lin Yan Amber ,Lin Yan Amber, Lin Yan Amber,Lin Yan Gloria,Chan YUhang Gloria,Chan Yuhang Dora,Law Yee Chien Jill,Chan wing yee Jessica,Zou Yuxi Karen,Yip Ho Ka&Amber,Lin Yan Jessica,ZOU Yuxi Jessica,ZOU Yuxi Jessica,ZOU Yuxi Karen,Yip Ho Ka Bella,Zhang Boya Bella,Zhang Boya Amber,Lin Yan Amber,LinYan
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