A PRESENTATION ON

Presented By:- Jitender (AB9022) Rank Mayur(AB9036) Sumanto Sharan (AB9040)

Type : PrivateGenre : Retail (Specialty)Founded : Almhult, Smaland, Sweden (1943)Founders : Ingvar KampradHeadquarters : Delft, Netherland.Area Served : WorldwideKey People : Mikael ohlsson (president) Hans Gvdell (President Inter IKEA Group)Products : Self-assembly FurnitureRevenue : €22.71 billion (2009)Employees : 127800 (2008)

Stands for…..

I - Ingvar

K - Kamprad

E - Elmtaryd (The Name of Family Farm)

A - Agunnaryd (The name of the Village)

“To create a better everyday life for the

many people”.

VISION

PRODUCTS

PRODUCTS

IKEA Global Success Strategy

IKEA key Selling Point

Low cost

Crazy commercials

Social and ethical responsibility

Unique brand identity (blue-and-yellow buildings)

Fair quality

Voucher promotions

Large inventory & parking space

Impulsive shopping experience

Family experience

IKEA Strategy

– Self assembly feature cuts operational & transportation cost

– Concentrate on individual marketing rather than mass marketing

– Limited warranty and service model after that.

– Opening small retail store and segmented marketing

– Diversity in business

– Country specific management style

– Standardized retailer selection

IKEA Product positioning

Concentrate people with blue collar jobs

Cultural strategy (use of Swedish flag & style)

Michael Porter argues that an organization can enhance its competitive positioning by performing key internal activities in the value chain at a lower cost and better than its competitors.

The value chain approach identifies two major activities- primary and secondary. Primary actives include production, marketing, logistics and after-sale functions. Secondary activities, on the other hand, are identified as support processes to primary activities.

IKEA Modified Value Chain

Social Responsibility

Low price but not at any price

IKEA wants to create products with a minimum impact on the environment and make sure they are manufactured in a socially responsible way

IKEA home furnishing stores may be the first major company in the country to take a stand against the ubiquitous waste. The Swedish manufacturer will no longer be offering customers free plastic bags.

Every plastic bag at every IKEA store in the U.S. will cost five cents. The proceeds from the campaign will go to American Forests, the nation's oldest nonprofit citizens conservation organization, to plant trees to restore forests and offset CO2 emissions.

As an alternative, and to influence customer habits in an environmentally responsible direction, IKEA is reducing the cost of its reusable 'Big Blue Bag' to 59 cents, from a dollar.

Corporate Strategy will ask you to answer fundamental questions such as "Why are you in business?" and "Why are you in this particular business?". This may appear to be a strange starting point but unless you can answer these type of questions you cannot produce vision statements and mission statements that have any real meaning.

Corporate Strategy

IKEA’s Corporate Strategy is…

Provide functional well developed furniture.

At price so low

That as many people as possible will be able to afford them.

Creating a better every day life for the many people

Porter’s Generic Strategy

Business Strategy

IKEA follows the focused cost leadership strategy. Young buyer in search of stylish and fashionable furniture and household accessories at low cost are IKEA’s target market segment.

Although a cost leader, IKEA also provides some differentiated features that appeals to it target customers including in-store playrooms for children, wheelchair for customers use and extended hour.

IKEA’s customers are actively involved in the shopping experience. The IKEA concepts relies on the choose, collect, transport and assemble IKEA products themselves. Customers involvement contributes to IKEA low price. That is the idea behind: “You do your part. We do our part. Together we save money.”

Cont….

Strengths

Cost efficiency Special perks (café) Store layout Variety of products

Assembly service offered Brand name equity Large inventory Value priced furniture Scale of economies Large supplier chain – 1800 located in 50 different countries Delivery service – Infrastructure system place

Weaknesses

Limited number of styles (not everyone likes contemporary-modern) Customer has to assemble the product Product may not be as durable depending on who assembled it Low customer service available on retail store floor Customer has to pick furniture up from store

SWOT ANALYSIS

Cont….

SWOT ANALYSIS

• Threats

– Language barriers

– Counterfeit and substitute products

– Competitors– Copycats (many

local carpenters can make and sell the product cheaper)

– High import taxes

– Risk of economic instability or war

• Opportunities

– Joint ventures– Collaboration with

other companies– Collaboration with

Unicef– Huge market

potential– Western ideas

and products valued by Indians

– More apartments and housing leases– especially among younger generation

Free delivery service should be continued.

Customization should be done in tune with local suppliers.

Franchisees should be given to local people .

Promotional strategy should be in accordance of the tastes of local people.

They should come to untapped Indian market and other developing countries.

Develop premium products for higher class people for developing niche market.

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THANK YOU !