Strategic Management and IKEA
IKEA assignment 1. 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? – I think that the Ikea’s key competitive advantages are, their lower cost products, everyone is looking for a good deal and if they are able to buy a chair for $50 instead of $100 and assemble is easy I think people will buy the $50 chair. Also another advantage is the customers in store experience, I do not know of many stores, that offer in store child care and the way they design the store so that it is in easy to find something.
Now that everyone is on a time restraint and people want to get in and out of the store fairly quickly having the store arranged in circle design helps this. I think what Ikea needs to focus on is getting there web site running better, so people can order products online and do not have to go into the stores. Now a day in the United States people look for convenience and ordering online is one convenience that defiantly draws customers. So Ikea needs to get a team together to work on getting their web site up and running for ordering products on line I think this will help them to expand into the US. 2.
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What factor is the biggest reason for IKEA’s growth and popularity: value or image? What can IKEA do to sustain growth after it loses some cache ?? * The biggest reason for Ikeas growth and popularity is because of the product value; their products come completely unassembled and are assembled by the consumer. This saves the company transportation costs, warehousing costs and space on the store floor, which makes their products more profitable. In addition they use quality hardware, they test their construction, use hardwoods where it is necessary for durability and they design furniture that is functional, with a simple design.
After Ikea loses some cache’ they would need to come up with a new product and diversify were they launch this new product. With a new product and it is market correctly and to the correct customers could bring Ikea back. I always think of Apple they originally was not that popular but they introduced the IPhone and IPod’s and now everyone wants one. So I think if Ikea thinks of a new way to design a table and chair this will bring them back up to them being one of the top furniture companies 3.
What strategic alternatives would you suggest IKEA employ to further penetrate the U. S. market? – I think some strategic alternatives that Ikea should employ to penetrate into the US market are they should introduce their type of shopping as a “fun shopping experience” and Ikea has to start thinking out of the box when it comes to expending in the US market because furniture marketing I do not think cannot be standardized globally, the US has specific characteristics, such as how they promote.
Their commercials are to controversial to be on US TV so they will need to recreate new ones and they need to make their presence on the internet more known. 4. Speculate on what will happen at IKEA stores as they are adapted to fit local tastes. Is the company’s trade-off of service for low cost sustainable in the long term? I think that Ikea will succeed as long as they do adapt to fit local tastes. With the way the economy is everyone is looking for a good deal so as long as they still offer the lower prices and the same amenities as the other stores, daycare, restaurants and easy to get around.
I think Ikea will become popular in the US. If you question what about putting things together I do not think Americans will have a problem with that , there are so many things we have to put together, if you order from the internet or from target or Wal-Mart you have to put their furniture together also. So I think if Ikea keeps doing what they are doing by not expanding too big to fast and adjust to the different cultures they will succeed in the US.