Mba505 Ikea Slowly Expands Its Us Market Presence
Jones International University
MBA 505: Marketing Management
Module 4: Product/Service Positioning
Assignment 4.2: IKEA
By: Cheryl Tomlin
For: Dr. Terrance Cusaac
September 29, 2013
Procedure
1. Read the case study.
2. In a Word document, respond to the following:
a. 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? From its low cost structure to its corporate culture (“The IKEA Way”) to the do-it-yourself approach (replete with measuring tapes, paper, and pencils available in-store) plus its strong brand image (representative of high quality, low-cost ,trendy, modern and fashionable furniture), the added amenities it provides (carracks, childcare, restaurants, design consultants), and its strong focus on sustainability (from product design to disposal) IKEA is well able to avail itself of current market opportunities (the weak state of the U.S. economy, demand for convenience, sustainability issues) to leverage its competitive advantages. To this end IKEA employs a strategy of operational excellence (OE) to focus on efficiency of operations and processes. OE is a competitive advantage: it translates to increased production flexibility, improved customer responsiveness, and cost minimization involving all aspects of business operations. OE streamlines functions and optimizes performance (www.deloitte.com). OE isn't achieved overnight. It is the systematic management of safety, health, environment, reliability and efficiency which takes constant, deliberate efforts to build and sustain a culture over time (www.chevron.com). IKEA has developed relational advantages (long-term relationship with supply chain partners/ability to offer them financial assistance, local trading offices); legal advantages (tax advantages, NPO corporate ownership); organizational advantage (culture); human resource
MBA 505: Marketing Management
Module 4: Product/Service Positioning
Assignment 4.2: IKEA
By: Cheryl Tomlin
For: Dr. Terrance Cusaac
September 29, 2013
Procedure
1. Read the case study.
2. In a Word document, respond to the following:
a. 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? From its low cost structure to its corporate culture (“The IKEA Way”) to the do-it-yourself approach (replete with measuring tapes, paper, and pencils available in-store) plus its strong brand image (representative of high quality, low-cost ,trendy, modern and fashionable furniture), the added amenities it provides (carracks, childcare, restaurants, design consultants), and its strong focus on sustainability (from product design to disposal) IKEA is well able to avail itself of current market opportunities (the weak state of the U.S. economy, demand for convenience, sustainability issues) to leverage its competitive advantages. To this end IKEA employs a strategy of operational excellence (OE) to focus on efficiency of operations and processes. OE is a competitive advantage: it translates to increased production flexibility, improved customer responsiveness, and cost minimization involving all aspects of business operations. OE streamlines functions and optimizes performance (www.deloitte.com). OE isn't achieved overnight. It is the systematic management of safety, health, environment, reliability and efficiency which takes constant, deliberate efforts to build and sustain a culture over time (www.chevron.com). IKEA has developed relational advantages (long-term relationship with supply chain partners/ability to offer them financial assistance, local trading offices); legal advantages (tax advantages, NPO corporate ownership); organizational advantage (culture); human resource
References: Ferrell, O.C. and Michael D. Hartline. Marketing Strategy: Text and Cases, 6th Edition, 2014, South-Western, Cengage Learning. www.deloitte.com. Retrieved 09/29/13. www.chevron.com. Retrieved 09/29/13. http://businesscasestudies.co.uk. Retrieved 09/29/13. www.biblestudytools.com/asv. Retrieved 09.29.13. IKEA 2014 product catalog published Sept 2013, accessed 09/29/13.