Question

Group Case Study Assignment: IKEA

(In 2-3 Pages) answer the following in relation to the company IKEA

-The company we are talking about is IKEA, also –Please cite all sources used.

-For your group assignment, I'd like you to engage in a strategic investigation of

one of the companies listed or your own selection—with instructor’s

approval. First, you will define the larger strategic context, specifically focusing

on the industry and generic strategy. Then you will identify your company’s

core competence.

Finally, you will comment on four potential strategic initiatives that you suggest

your company take to grow their business. In all instances, you will need to

USE FRAMEWORKS (the models we have studied) TO JUSTIFY

YOUR ANSWERS. As you're doing the analysis, please answer the following

questions in a clear, concise and logical approach. Remember, how you

support your answer is more important than the answer itself. Please keep in

mind that grammar and spelling are as important as your analysis.

1. Please use Porter's Five Forces framework to complete a thorough

industry analysis of your company’s industry in general. Is this

industry viable? Growing? Shrinking? Discuss. What are the

competitive forces that squeeze profitability? Second, how might

your company protect itself against those five competitive forces?

Make sure to be explicit when attending to the Five Forces.

2. Define your company’s generic strategy (Cost leadership,

Differentiator, Focused CL, Focused D, SiTM), as well as its major

competitors – who are their competitors? Then, use all components

of the Strategy DNA (OE, positioning, fit, etc.) to make the case for

how your company separates itself from the pack, given that there is

considerable overlap in the market place. BE CONCISE!

3. Next, what is your company’s Core Competence? To get to the core

competence: Begin with your company’s generic strategy, which will

influence its Value Chain. Create a value chain for your company that

reflects its generic strategy. For a model of this, take a look at the text

P71, fig 6.2, Reed’s Value Chain. Technological Development is the

third horizontal item in the Reed’s VC and it reflects Reed’s core

competence. Each item in the VC supports the generic strategy of the

company and its core competence. Keep in mind your company may

more than one core competence or like Best Buy have many with a likely

GS being SITM (in a good way in Best Buy’s case). Once you have

completed the VC, DRAW A CORE COMPETENCE TREE that covers

their End Products, the Business Units, the Core Products, and then

the Core Competence. Work from the top down to hone in on the core

competence. Make sure your tree is clean, compact, and flowing -if

something doesn't align or fit, justify for me why it doesn't. Lastly,

administer the three-part core competence test and comment in

detail on whether your company passes it. Explain why or why not?

Answer 1

1.

Ikea is a very innovative company, as depicted in its name itself, which is the extraction from its owner's name and hometown. Not just the name, Ikea uses innovative ideas and offer beautiful furniture and appliances.

Ikea supplies in the industry which is ever growing and will never stop to flourish. The need for furniture, appliances, and home accessories is always there in every household or business, thus making Ikea a viable brand for all times.

Keeping the factors of buyer and supplier power, competition, a new entrant in the market and substitution, Ikea ahead in the following:

• Ikea has a large customer base. It holds customer loyalty as its key power. Since it offers quality and originality in its products with better delivery and customer service (pre and post-sale), people tend to purchase from Ikea and consider it a trustable supplier.
• Ikea has its competition with companies such as Walmart and Amazon. However, these companies are not specific to products what Ikea offers. Hence, Ikea is the sole seller that focusses on its product line of furniture, appliances, and home accessories, rather than diving into all sorts of products and compromising on the quality and customer service.
• Ikea has formed a brand image in the market and in the minds of the buyer over a period of time. Its strong image and huge customer base are the key factors that any new entrant would not be substituting Ikea in its area of supplies.
• Lastly, the buyer's power of purchasing lies with Ikea. With the regular launch of products in its vast product range, that are durable, highly functional and appealing, the buyer is likely to spend in Ikea products and save their time of researching and purchasing through the market.

Ikea is a growing lead company in its sector. What it needs to plan ahead is on:

• Better customer engagement and relationships
• unmatchable customer experience
• Post-sale customer service; Returns and Exchanges
• Featuring and expanding in market segments
• Growing globally; expanding the market in developing countries
• Introducing a premium range of its products
• Adopting marketing strategies centered around providing maximum customer satisfaction.