IKEA case study.docx

IKEA case study.docx

《IKEA case study.docx》由会员分享，可在线阅读，更多相关《IKEA case study.docx（11页珍藏版）》请在冰豆网上搜索。

IKEAcasestudy

TableofContentsPageNo.

ExecutiveSummary2

IntroductionandSummary3

CaseStudyAnalysis

IKEA’ssuccesswithitsstandardizedproducts4

AdaptationstrategyinChinesemarket6

Youngpeopleofallages7

TargetMarket7

IsIKEAdestinedtosucceedinChina8

HowcanIKEAadapttolocalconsumerbehavior

InordertobesuccessfulinChina9

Conclusion9

Recommendation10,11

Reference12

ExecutiveSummary

Background

IKEA,theworld’slargesthomefurnishingsretailchain,wasfoundedin1943byaSwedishentrepreneurIngvarKamprad.IKEAoffersstandardizedproductsworldwidethatareScandinavianindesignworldwide.Theuniqueideaofthisfamousbrandistooffertheoptionofassemblingproductstocustomers.Thedesignofthefurnitureisverymodernandlightasitismadeofparticleboard.Theproductsareofcontemporarydesignandfunctionwiththeconceptthatisbasedonlowprice.Highquality,convenience,affordability,consistency,functionalityandgooddesignaretheessenceofthisworldclasshomefurnishingretailer.

Challenges

IKEAfacedmanychallengesintermsofcultureandbusinesspracticesaswellassocio-economicandpoliticalconditionsinChina.Thebiggestchallengeswerepricing,copycatproducersandcheaplaborcostforassembledfurniture.

Alternatives

TomakethepricemoreaffordableforChineseconsumersIKEAhasdevelopedmanufacturingunitsinChinaandcollectsrawmaterialslocally.DuetocountryspecificenvironmentIKEAchosefranchisinginChina.BecauseofcheaplaborcostofChineseassembledfurnitureIKEAoffersreasonablefee-basedassemblingservices.IKEAhasbuiltitsstoresnearpublictransportationlinesinsidecitiessinceonly20%ofcustomersowncarsinShanghai.

Recommendations

IKEAneedstofindmorelocalsupplierstokeeppricelower.Tounderstandlocalcultureandpurchasinghabit,thecompanyshouldcarryoutextensivemarketresearch.Toattractmoremiddleclassconsumerhugeadaptationisnecessary.Extensivetrainingfortheemployeesandbettersupplychainmanagementwillsolvecustomerserviceandout-of-stockproblemsforIKEA.

Introductionandsummaryofthecasestudy

IKEAisafamousSwedishfurniturecompanythatplaysthebestplayerinthehomefurnishingmarket.Itenteredtheglobalmarketwithanethnocentricviewofglobalmarketingwiththeirproducts.

TheproductsofIKEAarestandardizedwithanassortmentthatisuniversallyaccepted.ThecostleadershipstrategyofIKEAissecuredbycontractmanufacturers.Thecompanytakestremendouscaretomatchmanufacturerswithproducts.IKEA’smissionistodeliverhomefurnishingswithgooddesignandfunctionsatverylowpricesothatpeoplefromallwalksoflifecanaffordtobuythem.BecauseoflongtermcontractsIKEA’ssuppliersmanufactureexclusivelyatlowpricesforIKEAwheredesignersandsuppliersworktogethertobuildsavings-generatingfeaturesintoproduction.

Consumers’relationshipwithIKEAisadesignertouserrelationshipwhereconsumersbecomepro-sumersi.e.halfproducersandhalfconsumers.Herecustomersarealsosuppliersoftime,laborinformation,andtransportation.Do-it-yourself（DIY）conceptiswhereconsumerssavemostbyassemblingthefurniturethemselves.DeliveryservicesareprovidedbyIKEAatanextrabutreasonablecost.ThelargesizeofIKEAstoresenablesthiscompanytoincludebaby-sittingareasandcafeteriaswhichinturnprovidesthevalue-seeking,car-borneconsumerswithacompleteshoppingdestination.Bynotsellingthroughdealers,thecompanyhearsdirectlyfromitscustomers.

Chineseconsumersrefrainfromcomplainingbecauseoftheirculturalbackgroundandpurchasingbehavior.Iftheyarenotsatisfiedwithanyproducttheywillstopbuyingtheproductorstopvisitingtheshop.IKEA’sideatodirectlyconnectwithcustomeristogetfirst-handreactionofthecustomeraboutaproduct.

InChina,HongKongandtheUnitedArabEmirateswheremarketisrelativesmallorwhereuncertaintymayexistastotheresponsetotheIKEAconcept,franchisinghasbeenusedbyIKEA.

IKEApricesareatleast30to50percentlowerthanfullyassembledcompetingproductsbecauseoflarge-quantitypurchasing,low-costlogistics,storelocation,andtheDIYapproachmarketing.Theprofitlevelhasbeenmaintainedverysuccessfullyalthoughthecompanyhascutpricessteadily.

IKEApromotesitsproductusingcatalogwhichisuniformexceptforminorregionaldifferences.Thecompany’sadvertisinggoalistogenerateword-of-mouthpublicitythroughinnovativeapproaches.

IKEA’sstrategicpositioningandvalue-addeddifferentiationsetsitapartfromitscompetitions.AlthoughIKEAofferslimitedcustomerassistanceitcreatesopportunitiesforconsumerstochoose,transport,andassembleunitsoffurniturethatnootherfurniturecompanyoffers.

IKEA’ssuccessfulculturemadeitsexpansionpossibleintovariouscountries.ButintheUSA,IKEA’sstandardizedconceptionwasnotacceptedverywell.Americanshavedifferenttastesinfurnitureandtheircultureisalsodifferent.Moreover,morecompetitionandchangesinSwedishlawsonfurnituremadeexpansionintotheUSAverydifficult.IKEAhadtochangeitslayoutswheretheyhadtoaccommodatenewcashregistersintheUSA.Moregenerousreturnpolicyandfasterdeliveryservicehavebeenintroducedthere.ThisexperiencehastaughtIKEAtoadoptamoreadaptedculturewhileexpandinginothercountries.

Source:

Czinkota,MichaelR.,Ronkainen,IikkaA.,InternationalMarketing

Casestudyanalysis

IKEA’ssuccesswithitsstandardizedproducts

ThestrategytooffervalueformoneyisthemosteffectiveapproachthatallowedIKEAtobesuccessfulgloballyevenwitharelativelystandardizedproductandproductlineinabusinesswithstrongculturalinfluence.

IKEAfocusesoninvolvingitscustomersinassemblingthefurniturethatisveryconvenienttouseandfirminstructure.GloballythiswasabighitespeciallyintheUSAwherepeopleareverygoodatplumbing,fixingfurnitureandrepairingtheirhome.

ThequalityofIKEAfurnitureisofveryhighstandard.Thecompanymaintainsthequalitycontrolineverycountrywhereithasitsoutlets.

TheoriginalformulaofIKEAissuccessfulworldwideforthefollowingreasons:

∙Anewformofshoppingexperiencewithhugerangeofhighqualityproductsataffordablepriceforthecustomerstotakehomeandassemblethemselves

∙Standardizedproductsthatcanbeboughtbymanydifferentpeople,withdifferentwaysoflife

∙Anewformvaluewherecustomersarealsosuppliersoftime,laborinformationandtransportation,andsuppliersarealsocustomersofIKEA’sbusiness,andtechnicalservices

∙IKEA’sspecialeffortstoadaptitsactivities,especiallyfortheUSandChinamarkets

∙Promotionadaptation:

differentslogans,differentimages,differentchannelsetc.

ExperienceofshoppinginIKEAisverydifferentfromshoppinginnormalfurniturestores.Consumershavefunhereandtheyarefreetodowhattheywant.Salespersonsarelaidbackwhodonottrytopersuadeorinfluencetheshoppers.Customerscanenjoythemselvesintherestaurantswhileshoppingorjustrelaxinmassiveshowrooms.Thisexperiencechangesthewholeconceptofshoppingintheretailingenvironmentwhereconsumersneedtohavefunandtimetorelaxandfeelcomfortable.

IKEAisassociatedwiththe“warmest,mostemotionalfurnitureintheworld”.

ThestrongpointsofIKEA’ssuccessgloballyaretheircontinuousinnovationwithnewproducts,newstyles,marketingstrategy,toolsandadvertisementsandthemodifiedvaluechainapproach.

IKEA,withitscompetitiveadvantage,itssizeandresources,haschangedtheglobalmarkets.WiththestrategyofadaptationapproachintheUSA,IKEAhasbeenabletoexpanditsactivityintointernationalmarkets.

Source:

GlobalMarketing-IKeaCase-sensex,nifty,market,retrievedMarch6,2010,from

AdaptionStrategyinChineseMarket

Price:

IKEAenteredChinain1998withitsfirststoreinShanghai.ThestorefacedseveraldifficultiesandchallengeswhileenteringtheChinesemarket.Themainfactorwereassociatedwiththeeconomicalandculturalenvironment.AlthoughIKEAfurniturewasconsideredaffordablebypeopleinEuropeandNorthAmerica,inChinaitwasaluxuryfurniturebrand.Chinesepeoplelikedthefurnitureverymuchbutcouldnotaffordit.ForthefirstseveralyearsthisbecameanobstacleforIKEA.

TheeffectivestrategyofIKEAwastomanufactureproductsandcollectrawmaterialslocallytocutdownthepricesmore.IKEAhasnowbuiltmanufacturingfactoriesandlocalsuppliersofsomematerials.IKEAhasrepositioneditsimageinChinaandthestorepricesnowareconsideredasmid-rangeinShanghai,BeijingandGuangzhou.

Countryspecificfactor:

IKEAchoseadifferentinvestmentmethodinChinaduetocountryspecificenvironment.IKEA’smainlandstoresbelongtotheIKEAgroupandoperateasfranchisorsinChina.

CulturalEnvironment:

Chinesepeoplespendmostoftheirtimeintheirlivingroomwheretheyentertaintheirguestsandshowofftheirpossessions.Theirlivingroomcontainsdiningtableaswell.Becauseofthis“show-off”psychology,IKEAoffersabroaderrangelivingroomfurnitureinChina’sstores.

IKEAhasrecentlywitnessedanenormousdesiretobuybedroomfurnitureinChinaespeciallyinShanghai.Therefore,IKEAisplanningtotargetcompletebedroomfurniture.

Assemblingservice:

IKEAhadtoadaptitslocationandDIYassemblyconcepttoChina.IKEAhasbuiltitsstoresnearpublictransportationlines,offerslocalhomedeliveryandlon