Ikea Case Study Essay

EXAMPLE ANALYSIS: IKEA

In Incomplete Fulfilment

Of the Requirements for the Course

TACTICAL MANAGEMENT ( BA 111-A)

1st Semester, AY 2013 – 2014

I. Qualifications

IKEA is among the most powerful global merchants in the world today. It is an international organization that patterns and sells ready-to-assemble pieces of furniture and low-rpiced elegantly designed merchandise such as beds, ergonomic chairs and home decors. It truly is found in Laxa, sweden in 43 by Ingvar Kamprad, merely only 17-years old at that time. The company's identity is an acronym composed of the inventeur of the founder's name, Ingvar Kamprad; Elmtaryd, the brand of their family members farm; and Agunnaryd, the name of the village in which he grew up.

Although IKEA has been generally successful in the year 1950s, IKEA ongoing to encountered several problems until the 1970s. Problems like the changing in the milk truck's route, prohibition of IKEA during the Furniture Fair, the rumors regarding IKEA's low-quality products and finally in Stockholm, when they experienced longer lines and slow customer service. In 1985, IKEA opened in Philadelphia, United states of america. This was to find out whether a Western retail store just like IKEA can succeed in a massively diverse market. The consumers in the united states had a different preference. IKEA was then simply able to solve the problem by redesigning the furnitures, trasnferred their locaitons to reduce costs and they listed their products from Kronor to U. T. Dollars.

In eighties, IKEA extended to enter new markets world wide. Stores had been opened in the Canary Islands, Portugal, Iceland, Arab saudi, Belgium, Kuwait, United Kingdom, Hongkong and Italy. In terms with thei business structure, IKEA's target audience is the youthful, mobile global middle category who are searching for attractively nevertheless low prices furnitures. Although the prices are low, IKEA ensured that the quality of its products is not being sacrificed.

The groups of companies that form IKEA are all handled by INGKA Holding., a Dutch firm, which in turn is definitely controlled with a tax-exempt, not-for-profit Dutch

foundation. As of October 2011, IKEA provides 332 stores in 38 countries. In fiscal yr 2010, this sold $23. 1 billion dollars worth of products, a six. 7 percent increase above 2009. In mid-August 2012, the company declared that it will be creating a chain of 100 overall economy hotels in Europe.

II. Concerns and Conversations

Culture

IKEA needs to adjust the lifestyle of region. In their circumstance, they opened up their 1st store in the united states in 1985. Unfortunatley, the European-style would not appeal for the American traditions. Americans got different linen sizes, seat sizes as well as the preferences overall. Therefore , IKEA have to be usually flexible in terms of customer preferences. This is very important because different culture have diffrent trends and necessities. A traditional design in Eurupe is probably not attractive inside the Asian or Northern American countries. Egalitarianism

The company IKEA developed a culture of Egalitarianism in their company. Therefore they all treat each other evenly. Kampard's managing style was informal, nonhierarchical, and team based. Egalitarianism has an benefit of having distributed equality reputation. Each individual staff member is responsible for personal and group tasks with out a chain of authority. This can be good for the corporation because it stops confusion. In IKEA's case, there are not any special advantages for mature managers and pay is not as high. Nevertheless , having an Egalitarianism traditions has a lot of downfalls. The business will have not enough leadership. There will eventually become no power figures to take control. Low-Cost Products

Although the model encourages low prices it is identified there exists an connected low level of customer service which will couples this kind of suggesting we have a need to focus on service to ensure a complete purchasing experience and be sure repeat business within the existing customer base. Too strong of the emphasis on cost-saving could lead to trimming corners and...



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