Strategic Management and Ikea

1) How has IKEA succeeded in expanding across the world employ a mensuration range of mathematical products and a standard outline in the home furniture and furnishings industry, in which divergent cultural influences argon prob equal to(p) to be at their crockedest? First of tout ensemble, seems reductive say that IKEA provides a standard range of products having regard to the incredible width of this range (which allows, at that placefore, to scissure galore(postnominal) vari adapteds of many types of heterogeneous products in this way is al virtually completely bypassed the line traditionally connected with the offer diverse depending on the country of destination).In fact, the product range is so vast (The IKEA products on offer Exceed 12. 000 items in number) to allow a lack of diversification for export commercialize place alwaysy type of consumer that is part of the target audience can invite products of his choice, ignoring the others (which will be desir able-b odied by other consumers focused on other features). In this way this strategy exceeds its traditional limit.As it is written in the text under consideration IKEA has achieved the impossible, to bring about a range of products winning to consumers everywhere, in countries with very several(predicate) cultures, and to apply a formula for demonstration and sale of those products which reinforces the attractiveness . With regard to the standard strategy used by IKEA in my side its success relies on a few points easily described in the oblige. First, the target is hearty defined (and wide, and in all countries without exception). It may sound corny but the self-proclaimed focus of IKEA is young heap of all ages. In reality the market is primarily young people, who ar well educated, liberal in cultural values, white collar, but with hold in means because of their stage of career and family cycle, and in the process of setting up or expanding their homes because they are havin g children. The second successful point of the unitary strategy of the ac bon ton is the interest to achieve and maintain a cost reward (in light of the removes of the target, of course). This cost and damage lead is achieved by a combination of strategies large-quantity purchasing, the push to discover ever-cheaper suppliers in ever-cheaper markets (sourcing in developing economies has uprise from 32% to 48%), affordable logistics, store location in relatively cheap suburban areas, and a do-it-yourself approach to marketing and distribution. broken costs are translated into low costs as IKEA pursues a deliberate price leadership strategy.In addition to this, the Distribution and Promotion system is un warningd and inexpensive and easily replicable and acceptable to consumers around the world. So, everything in IKEA works to create a great opportunity, overcoming (as al jell said at the beginning of my answer) the limits of the non-diversified offer per country and cult ure in this particular industry sector, characterized by strong cultural differences. 2) Is there a limit to this expansion? Does IKEAs taradiddle illustrate the nature of such a limit?I call up the main limit to the expansion of the business of IKEA is cultural and, therefore, be able to contain ware costs, while continuing to adapt its products to markets other than those served right away. The example of the American market is helpful in this regard. On that occasion, IKEA had to wait a long time before being accepted in the get together States, producing profits. That was a very risky investment, yet the American market in that commodity sector has its own characteristics, presumably, very well known and different from European ones.The entranceway into the U. S. market, to be profitable, had to wait an meaning(a) adaptation activities never do before. I think in this case when it comes to expansion it is done in a geographical sense (and non profits), so an entry into o ther markets to IKEA today seems to be quite complicated (making reference completely to markets and economies very different from those faced up to date) for the reason just expressed.America is a huge market, strategic and inviting for which is undoubtedly good to do what IKEA decided to do (invest with the initial losses, if necessary adapting their products), but I doubt that this can be repeated for other markets less strategically important than the American. From the point of view of the enlargement of the volume of business and profit, I have no association to be able to express with certainty, however IKEA in the text is move at the senior high schoolest levels of Globality and Added Value, therefore I do not think there are great possibilities of strong growth even in this sense.The most important thing is to keep their volumes trying to increase it as a great deal as possible. 3) How has IKEA managed to creatively combine the benefits of slew consumption and mass la bor with the desire for style and modernity of product? IKEA is able to take skilful advantage of the cost benefits of mass production (carefully selecting its employees and suppliers are able to match stringent quality standards at very competitive set from IKEA) and mass consumption because the citizens of all the world, belonging to the target specified by the company and reported above, and have an idea of odernity and style quite comparable, therefore the need to adapt its products to different markets is quite limited in this field (happened solitary(prenominal) for America). However, the need for fashion and modernity today is constantly evolving. A company structured differently from IKEA would have difficulty to be continuously ready to offer something desirable. Instead, IKEA, through a work of upgrading its products (however, wherever standard) can not only meet the needs of customers, but also to anticipate them IKEA makes low-cost trend. This is amazing.At this poin t it is clear and understandable as reported in the article IKEA has combined the cost-reducing benefits of mass production and consumption with attention to the style inevitable to persuade consumers to buy items which will be on display and in the eye of the purchaser for many years, unlike the humble hamburger or cup of coffee which are consumed quickly and as quickly forgotten. In short, like Harley-Davidson, it has created a global brand. It has managed to innovate and respond to Continuously changes in the world, continuing to convey a sense of excitement and modernity. Most important is the contribution of the catalogue of the Swedish firm, which has become something of a design picture imitated by competitors from around the world. 4) Has IKEA chosen a strategy of cost/price leadership or one of product differentiation? We could say that IKEA has incorporate the two strategies in a single large successful director. At initiative glance, without a careful study of the phe nomenon IKEA, it would seem easy to secern the choices made by the company as cost and price leadership helped by a not differentiated offer.But in answer to the first question, I have already explained how, for me, one can not tell of a lack of differentiation. It is absolutely not possible to speak of a strategy or the other in the case under study. IKEA has been able to be innovative in all aspects product and design, mass production delocalized and strongly supported, distribution channel, promotion type, location of stores and their structure. Thus, it has managed to combine the two strategies in a single strategy that brings together and makes something completely new.In other answers I have given a part of my interpretation of what is required in this question, but I think the best summary is that given by the authors of the article IKEAs strategy has been described as a focused cost leadership strategy, focused because it is targeted at a particular market niche, those who want style at low cost. However, this oversimplifies the approach adopted and underplays the complexity of the product, with its packaging of different services. If it were true that the strategy was no more than a form of focused cost leadership, it would be difficult to understand wherefore IKEA has been so successful.Rather it is the combination of low price and high quality which attracts the consumer, which is not an unusual situation. The attributes of the product offered by IKEA differ markedly from those of other retailers. glaring accessibility, customer participation in value-adding, the combination of low cost and high quality all mark the product out as incomparable and therefore as carrying a competitive advantage, one which is continuously renew as products are improved and renovated. IKEA is eternally ready to innovate. ) How out-of-the-way(prenominal) do you think that IKEA can look into the future in frame in its strategic anxiety? I believe that this mod el of strategic management is winning. It is and it will be due to the fact that creates something new from what is already well known to everyone. What is even more important and that bodes well for the future of IKEA is that it has always been the first mover. Being first means being able to thread the benefits from it. Be consistently first mover means being able to store the successes and failures of the past, learning from heir mistakes and their victories better and more quickly than your competitors are able to do by copying you. Achieve great results and be always ready for change (in fact, promote it ) is a symptom of a far-sighted and enlightened strategic vision. Follow this structure means continue in a context that is the company itself to manage and, presumably, to command. The key word today is not to sit on themselves. I think that IKEA is not ever sat on.