Case Study IKEA: Expanding through franchising to the South American market? Introduction This report is made by four, fourth year IBMS students for a marketing course. This report is based on a case from the book Global Marketing, by Svend Hollensen. The basis of this report is the international operating company IKEA. The main question that will be answered in this report is: Should IKEA expand further through franchising to the South American market? To answer this question the current situation of IKEA will be taken into account in this report. Next to this also other aspects like a SWOT analysis and other theoretical information will be used to come to conclusion, recommendation and possible implementation. Table of …show more content…
SWOT As describe in the current situation IKEA is doing well, and their concept is working worldwide. But as every company, IKEA also has weaknesses and threats also come along IKEA’s path. A good way of making an overview of not only the internal, but also external situation of IKEA, is by a SWOT analysis. In this chapter IKEA’s strengths and weaknesses, as well as the companies opportunities and threats will be shown in a SWOT analysis. IKEA’s Strengths Strengths are company resources that represent competitive assets. Next to this strengths are very important for a company’s competitiveness and ability to succeed within a market. IKEA’s strengths can be defined as following; * IKEA’s strong, and worldwide known brand * IKEA’s strong concept and vision * IKEA`s partnerships with suppliers (long-term and high quality) * Economies of scale IKEA`s Weaknesses Weaknesses are the opposites of strengths, and therefore a company’s competitive liabilities. IKEA’s weaknesses can be defined as following; * IKEA’s rapid growth and worldwide of activities (centralized startegy) * Keep the information flow to customers and stakeholders up-to date IKEA’s Opportunities A market opportunity is an opportunity for the company is the company’s strengths can be used to gain from the situation. Opportunities for IKEA can be defined as following; * Continue developing (even)
This worksheet is a complement to the study guide for both the MKT1. The purpose of this worksheet is to help you think about and apply important marketing concepts to Company G. By working through the exercises and matrices introduced in this worksheet (Section A, Section B, and Section C), you are laying the foundation for your marketing plan required in this assessment. This worksheet should be completed before you write your Marketing Plan, for which a template is provided.
Some of these strengths include great core values, their human and social capital, they carry a wide variety of products that have a strong brand name, and their expansion through global expansion and investment.
A company’s strengths are found within their own company and members. Depending on how well and to what extent a company uses its resources determines just what its strengths are. These strengths may be what they do better than other companies, what they do different from other
These are the strengths within your organisation. What exactly is it about you and your business that is better than the competition? Examples might include quality products, advanced technology, advanced knowledge and a long established business. Identifying the strengths of your current business or a new venture can improve the efficiency of your sales and marketing efforts – it helps you to visualise the unique selling point of your business which helps you write better sales copy, create better sales letters, make more successful sales calls and develop smarter marketing campaigns.
In IKEA’s history two different modes of entry were used. Both were met with big success and allowed IKEA to enter new markets very easily, and in a secure way.
The strengths are its resources and capabilities with which the firm has its advantage over its competitors.
IKEA has adapted to the operations function of a business. This function is the main function of every company. This key function, of which IKEA has adapted to, is the business function responsible for managing the process of creation of goods and services. The operations function is responsible for organising, coordinating, planning, and controlling the resources that are required in the production of goods and services. IKEA has effectively implemented this function by understanding the needs of customers. In particular, this applies to those who have a lower income, and/or, limited space. IKEA’s employees within the product design and product development departments, focus directly on the price and quality, as well as the design and function of products. Elements of the design are typically agreed on within the factory itself, this is where manufacturers and designers work together, to create a product with regard to the greatest use of raw materials and manufacturing opportunities. IKEA’s operations have proved effective as in 2013 it earned $35.5 billion. IKEA has a large amount of suppliers, greater than 1300. IKEA purchases most of their
In august 2008, IKEA had total 253 stores where 560 million people visited. Here the total sales became 23 billion Euros. Considering 20% sales profit here IKEA’s average customer per store and cost per store are given below:
Product – In terms of product, the author will perform an analysis among the IKEA competitors and identify whether this product line is appropriate or not. Is this product line serves the customer expectations? In addition, the author will provide recommendations on the changes should be made in how the products are being handled where applicable and necessary.
Through the use of SWOT Analysis, we will look at some of the Strengths, Weaknesses, Opportunities Threats, to IKEA. This SWOT Analysis gives us insight into some of the things that have hindered IKEA’s successes and failure. It also details how their threats have impacted their vision, and markets to view competitive advantages and areas of weakness.
Extensions are usually introduced as they have more advantages and these can be transferred to a new product, with the same attributes but in a different form.
Everybody has strengths and weaknesses including companies. Bring the focus out on your strength and amplifying that. This will help customers to associate your strength with the business identity. Your strength will become like your brand recognition and that is important when defining yourself.
1. Given the SWOT analysis presented in the case, what are IKEA’s key competitive advantages? What strategic focus should the company take as it looks to further expand into the U.S. market?
Competitive advantage depends on the firms capabilities, which are linked to the firm’s resources. To stand apart and differentiate itself
IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international