Preview

The Competitive Advantage of Ikea

Powerful Essays
Open Document
Open Document
9726 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Competitive Advantage of Ikea
DEPARTMENT OF TECHNOLOGY AND BUILT ENVIRONMENT

The Competitive Advantage of IKEA and IKEA in China
Zhi Li June 2010

Master’s Thesis in Logistics and Innovation Management

Master of Science in Logistics and Innovation Management

Supervisor: Lars Steiner

Abstract
Title: Author: Supervisor: Purpose: The competitive advantage of IKEA and IKEA in China Zhi Li Lars Steiner The main purpose of this master thesis is to describe the IKEA concept and discuss the application in China. After research the history of IKEA, interview with the manager of IKEA store, and find the information from the web and thesis, use the theory of competitive advantage to describe the IKEA concept and the competitive advantage which is the way that IKEA used to get the success. Secondly, discuss the application in China and give IKEA the suggestions to develop the competitive advantage in China market.

Methods:

Because IKEA is not a public company, I cannot get too much data. I browsed the official website of IKEA to get much information about the introduction of IKEA’ corporate culture, strategies, copartner, history and the data of IKEA financial and work group. I find some English and Chinese books, thesis and reports try to find more data and more good ideas of Chinese scholars. Visit and observe the IKEA store and note my questions. I tried to have an interview with IKEA store in china, but failed. Fortunately, I got an interview with Hans Karlsson which is the logics manager of IKEA store in Gavle. He explained the competitive strategy of logistics, the competitive advantage about IKEA and the next step IKEA may do in china. Try to analysis the different culture and other problem that IKEA have to face. Analyze all the data and the idea I have got and use the theory of Michael Porter to finish this thesis. IKEA should have many innovations to adapt to the China market. “At IKEA our vision is to create a better everyday life for the many people. Our business idea supports this
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Best Essays

    Crowesl M3 A2
    • 2324 Words
    • 7 Pages

    Crowesl M3 A2

    IKEA is a Swedish company that dominates in the furniture industry and is very successful with their sales and marketing strategies. They are also very conscience about the external environment. They have been in the foreign market since 1973, they currently have stores in over 37 countries and are continuing to grow (most recently Asia). By following the traditional pattern of globalization, first operating in countries with similar cultures and then expanding to the foreign market, they were able to have great international success (Burt, Johansson & Thelander, 2011). We will discuss in detail why IKEA strategies are so effective and why other organization should learn from their current success.…

    • 2324 Words
    • 7 Pages
    Best Essays
    Read More
  • Good Essays

    ASSIGNMENT INSTRUCTIONS
    • 1367 Words
    • 6 Pages

    ASSIGNMENT INSTRUCTIONS

    This assignment requires you to demonstrate your knowledge and understanding of the planning issues surrounding the entry of IKEA into CHINA. You are required to examine and evaluate the environment (competitive and politico economic), and to evaluate the marketing strategies and business model of IKEA, and their suitability to the…

    • 1367 Words
    • 6 Pages
    Good Essays
    Read More
  • Powerful Essays

    Case Analysis: Ingvar Kamprad and IKEA
    • 1558 Words
    • 7 Pages

    Case Analysis: Ingvar Kamprad and IKEA

    Our group will illustrate IKEA’s general development in chronological order. We analyze its’ different strategy in corresponding stage, and look into IKEA’s future development.…

    • 1558 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Good Essays

    Case Study Ikea
    • 1919 Words
    • 8 Pages

    Case Study Ikea

    IKEA is one of the most successful furniture retailer’s worldwide. The factors that contributed to this success and distinguished IKEA from its competitors will be monitored in the following analysis.…

    • 1919 Words
    • 8 Pages
    Good Essays
    Read More
  • Best Essays

    Ikea Global Sourcing Challenge
    • 2551 Words
    • 11 Pages

    Ikea Global Sourcing Challenge

    The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in the US. Its unique business strategy has given it its strengths for its success today. However, like all strategies, IKEA’s strategy has its own flaws that can pose as weaknesses. IKEA also has a lot of opportunities in the marketplace such as expansions of their company and threats such as competitors in the same industry.…

    • 2551 Words
    • 11 Pages
    Best Essays
    Read More
  • Satisfactory Essays

    IKEA case study
    • 440 Words
    • 2 Pages

    IKEA case study

    IKEA’s view of value creation and delivery assists customer loyalty by creating a strong brand culture. Nowadays, people are becoming brand conscious thus helps IKEA in retaining more customers. The company is customer oriented which make its products based on consumer needs. IKEA sells stylish furniture at such a low price that is really affordable and more people buys it, which in turn increases sales and customer loyalty. Customer loyalty is all about attracting the right customer, getting them to buy, buy often, buy in higher quantities and bring you even more customers. IKEA started as a pure Scandinavian furniture seller with a standard product but latter on get mixed with local culture of country and life style as in case of China. In addition, convenience of going to IKEA stores is another contributing factor to customer loyalty. The stores are near to public transport places and shoppers view furniture on the main floor in scores of realistic settings arranged throughout the cavernous showrooms (Wild et. al., 2007). IKEA has started a home delivery service and assembly service to make it more convenient for the customers. Not only this people who are very busy in life and cannot go to the brick store, they can also order through World Wide Web for the furniture and IKEA will deliver it to their doorstep (IKEA, 2012). Also, the company started additional services such as food outlets, food market and Kid’s corner to entertain its customers who comes for shopping.…

    • 440 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Strategic Management and Ikea
    • 720 Words
    • 3 Pages

    Strategic Management and Ikea

    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?…

    • 720 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Ikea Case Study
    • 963 Words
    • 4 Pages

    Ikea Case Study

    Given the SWOT analysis presented in the case, IKEA definitely has some key competitive advantages. All of the strengths mentioned in the case are very beneficial but the strongest I feel are the low cost structure, do-it-yourself approach, and the added amenities. The low cost structure benefits both IKEA as a company and the customers. IKEA is able to maintain low cost because they design their products around a target price. Also, the strong relationships IKEA has with their vendors is another way that enables the low costs. The do-it-yourself approach ties in with the low cost structure. In addition, the do-it-yourself approach makes the shopping experience at IKEA unique. Customers are able to go into IKEA, get what they need, and then get out without having to deal with sales people. In today’s world time is everything to people and IKEA recognizes this and it is shown through their method of the shopping experience. The added amenities are a huge competitive advantage to IKEA. No other furniture retailer has such amenities. Continuing with the whole time concept the amenities help to solve many problems. Some solutions that IKEA offers is a restaurant in the store if customers are hungry, a child care service so parents can take their time shopping knowing their children are being looked after, and rents racks for customers cars so they can transport the bigger bulky items to their home.…

    • 963 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Ikea Case Study
    • 580 Words
    • 3 Pages

    Ikea Case Study

    IKEA by American standards is a very unique store, and it is known around the world for its stylish, quality, and low-cost furniture and home furnishings. Based in Sweden, IKEA's stores have a strategy of operational excellence in productions, supply chain operations and marketing. IKEA wants to penetrate the US market but the US market is a different market and IKEA would have to adapt to penetrate such a market. We will examine IKEA's competitive advantages and look how it should go about penetrating the US market. We will look at strategic alternatives and we will look at possible outcomes for the penetration of the US market.…

    • 580 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    IkEa
    • 4890 Words
    • 17 Pages

    IkEa

    The selected company for discussion is IKEA group where company is renowned for their D.I.Y concept which makes them the sovereign furniture retailer in the industry. In this report, the first scope of the discussion will be accentuating on the segmentations and target market segments on how IKEA is based according to their company standards with different approaches and ways of adopting the concepts.…

    • 4890 Words
    • 17 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Ikea Strategic Plan
    • 6109 Words
    • 25 Pages

    Ikea Strategic Plan

    IKEA is a company established in the early 1940s. The company has 140 stores spread over 30 different countries. IKEA is a retailer that sells furniture, home furnishings and house wares. IKEA has a clear mission: selling a wide range of furniture and accessories at a reasonable price so that most people can buy them. IKEA is mainly active in Europe and the US. 78 percent of IKEA’s income derives from these markets. The customers are mostly youngsters or families. Currently IKEAs strategy is the cost leadership strategy. By employing the self-serving method IKEA managed to keep the prices low. Since the financial crisis the demands of the population has changed to low budget furniture. Many companies have also started to focus on cheaper prices because of this, although IKEA is still cost leader in their market segment. IKEA is one of the biggest furniture companies but not widely present in areas around Europe and America. In order to enter those markets and fill other gaps IKEA has to change to the transnational strategy. This will introduce cultural awareness connected to low cost furniture. Although competition is raising and IKEA is mostly present in a concentrated area IKEA is one of the…

    • 6109 Words
    • 25 Pages
    Powerful Essays
    Read More
  • Good Essays

    IKEA Case
    • 2818 Words
    • 9 Pages

    IKEA Case

    The following report delineates the furniture retail market in the US, a brief starting point assessment of IKEA, the issues facing IKEA in expanding its current business to the U.S. Market and its strategic alternatives. As expected when a company ventures to new markets, it has to determine how it will satisfy the demands of local customers. IKEA has to find a way to satisfy US consumers. To do so it might have to leverage its brand equity, adopt a product development strategy before it opens new stores or change its current self-service business model and adopt a customer-oriented approach. After consider its strategic priorities I suggest a two-fold strategy: product development coupled with leveraging brand equity.…

    • 2818 Words
    • 9 Pages
    Good Essays
    Read More
  • Powerful Essays

    IKEA Case analysis; Hill & Jones
    • 5855 Words
    • 24 Pages

    IKEA Case analysis; Hill & Jones

    This analysis detailed the history of IKEA Company since its establishment by Ingvar Kamprad in 1943 to the world wide expansion and future it faced in 2008.…

    • 5855 Words
    • 24 Pages
    Powerful Essays
    Read More
  • Good Essays

    Ikea's Future Market Strategy
    • 2476 Words
    • 10 Pages

    Ikea's Future Market Strategy

    The purpose of this report is to discuss the IKEA’s current market situation, suggest new market strategy and evaluate the option of further penetrating the US market considering the present market conditions. In this report we also provide an alternative market, which can be explored in near future, for the further growth and expansion opportunity to the company. SWOT analysis is taken as the basis given in the case study and compared to the present condition and taste of customers in the US to logically bring out the facts to support the further expansion in the US market. Matching the different methods, marketing and products policies of IKEA to the economic conditions and customer’s buying behaviour Mexico is suggested as the alternative market for the company and rationally discussed bringing and comparing the relative facts.…

    • 2476 Words
    • 10 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    A Case Study on Globalization of IKEA
    • 435 Words
    • 13 Pages

    A Case Study on Globalization of IKEA

    IKEA which may be the world’s most successful global retail has grown into a global cult brand with 230 stores in 33 countries that host 410 million shoppers. To achieve global success, IKEA took some actions, for example, in order to avoid the costs associated with shipping the product all over the world. IKEA works with suppliers in each of the company’s big market and IKEA had to adapt it offerings to the tastes and preference of consumers in different countries. Besides, globalization of market and production are also an important factors of IKEA’s achievement.…

    • 435 Words
    • 13 Pages
    Satisfactory Essays
    Read More

Related Topics