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LEE SHAU KEE SCHOOL OF BUSINESS AND ADMINISTRATION

 

MGT B399F
Management Policy and Strategy
Assignment 2 (Group Project)
 

|Name & Student No.: |1. Chan Tsz Yan (07589029) | | |2. Fong Chi Ying (07583720) | | |3. Lam Shuk Man (07588764) | | |4. Yu Yuk Ho (07583989) | | |5. Kong Wing Kit (07588844) | |Tutorial Group No.: |T01 | |Date: |  | | |6 April 2010 | | |  | |Submitted to: |Winnie CHIU Wai Ling |

Table of Content
_Toc258416524
PART I. STRATEGIC DIRECTION OF IKEA3
Vision3
Mission3
Generic strategy3
PART II. OPPORUNITIES AND THREATS3
Opportunities3
1. Rising number of DINKs3
2. Increased supply of small and medium-sized flats3 3. The coming of Internet Generation3
Threat3
1. Degree of rivalry is increasing3
PART III. STRATEGIC OPTIONS AND RESOURCES CAPABILITIES3
1. Furniture design to fit the DINK house3
Resources are needed for product innovations3
2. More in-store home demonstration units3
Resources and capabilities:3
3. Cooperation with the property developers3
Resource and capabilities:3
4. Add value and reduce cost by the use of internet3
Resource & Capabilities3
PART IV. RECOMMENDATION3
Strategic Option 1 is recommended.3
Strategic Option 2 is not recommended.3
Strategic Option 3 is not recommended.3
Strategic Option 4 is recommended.3
References3

PART I. STRATEGIC DIRECTION OF IKEA

Vision
IKEA aspires to create an iconic global brand in furnishing "to create a better everyday life for the many". It offers a wide range of home furnishings with good design and functions at low prices that as many people are able to afford them as possible. (Inter IKEA Systems B.V., 2010)  

Mission
The company’s goal is to provide all consumers with cutting-edge but cost-effective products through innovative design, production, distribution, and sales techniques. Also, IKEA is dedicated to innovation and sustainability.    

Generic strategy
IKEA adopted the cost focus strategy based on low cost to create the sustainable competitive advantage. It concentrates on a narrow buyer segment, i.e. the youngsters who concern about the style and low selling price of the furniture, and outcompetes rivals by offering them the new-designed and trendy furniture at a lower price. Besides, IKEA adopts the automatic selling service and self-assembled furniture to lower the operating cost of the company.   

PART II. OPPORUNITIES AND THREATS
Opportunities
1. Rising number of DINKs
The trend of reducing household size and a growing pool of middle-class double income, no kids (DINKs) families leads to growing market interest in medium-end to high-end boutique apartments. They are usually younger couples (25-34 years old) in the income bracket of HK$20,000 - HKS50,000. Psychographic-wise, they aspire to modern lifestyle and want a higher living standard. (The Chartered Institute of...
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