Case study Ikea
Questions:
1. What are the core competencies and end products of IKEA? How are they linked with each other?
The core competencies of IKEA are the “assemble it yourself” products and the “space friendly packaging”. Because of this they save costs on employees. The employees are not needed to collect and build the furniture, because the costumers do this by them selfs. The end product of IKEA is high quality design furniture, and the in-house products that complete the interior.
The core competencies and the end products are strongly linked together, if one of these goes away the whole concept/system collides.
2. How did IKEA diversify?
IKEA diversified as well with product variety as geographical expansion, this started right after the founding of the IKEA. Not long after the founding of the IKEA the competition in Sweden made them look for other manufacturers, they found them in Poland. The quality remained but the prices went down. They also started to expand to other countries in Europe and later on also in Australia, Canada, the USA and China. Their products started to change to the needs and demands of the host countries, new materials and new designs were introduced and internationally they introduced the children design, children friendly stores and even the restaurant menu gained children meals.
3. How did IKEA expand internationally? How has the firm maintained a focus on core competencies while simultaneously adapting in local needs in host countries?
They started to expand in 1963 (first abroad store was in Norway), with a focus on the European market. But also further abroad in Australia and Canada stores popped up. In Europe they maintained the same operational formulas. However, this did not work out in the USA. The demand coming from this market preferred other products. IKEA chose to redesign a fifth of its product and its routines. This all changed but they kept their low-price focus.
In Poland an other problem occurred, it was too
1. What are the core competencies and end products of IKEA? How are they linked with each other?
The core competencies of IKEA are the “assemble it yourself” products and the “space friendly packaging”. Because of this they save costs on employees. The employees are not needed to collect and build the furniture, because the costumers do this by them selfs. The end product of IKEA is high quality design furniture, and the in-house products that complete the interior.
The core competencies and the end products are strongly linked together, if one of these goes away the whole concept/system collides.
2. How did IKEA diversify?
IKEA diversified as well with product variety as geographical expansion, this started right after the founding of the IKEA. Not long after the founding of the IKEA the competition in Sweden made them look for other manufacturers, they found them in Poland. The quality remained but the prices went down. They also started to expand to other countries in Europe and later on also in Australia, Canada, the USA and China. Their products started to change to the needs and demands of the host countries, new materials and new designs were introduced and internationally they introduced the children design, children friendly stores and even the restaurant menu gained children meals.
3. How did IKEA expand internationally? How has the firm maintained a focus on core competencies while simultaneously adapting in local needs in host countries?
They started to expand in 1963 (first abroad store was in Norway), with a focus on the European market. But also further abroad in Australia and Canada stores popped up. In Europe they maintained the same operational formulas. However, this did not work out in the USA. The demand coming from this market preferred other products. IKEA chose to redesign a fifth of its product and its routines. This all changed but they kept their low-price focus.
In Poland an other problem occurred, it was too