Ikea Global Strategy

International Business

Group Assignment – Group E

Report prepared by:

Submitted to:

IGSB, UniSA, MBA Program, International Business

Words counted (3000 words, executive summary, reference and appendix not included)

Table of Contents

1. EXECUTIVE SUMMARY 4

2. INTRODUCTION 5

3. IKEA’s COMPETITIVE ADVANTAGES 5

4. IKEA CORE COMPETENCIES 6

4.1 Cost Driven Strategy 6

4.2 Brand Equity 6

4.3 Marketing Strategy 6

4.4 Product Innovation 7

4.5 Corporate Social Responsibility 7

5. IKEA KEY ISSUES & RECOMMENDATION 7

5.1 Threats on Market Penetration 7

5.2 Potential Risk on Operation 9

5.3 Organizational Management 12

6. ACTION PLAN 13

7. CONCLUSION 14

8. APPENDIXES 15

Appendix a) China’s store figure 15

Appendix b) BrandFinance Global 500 (100) 16

Appendix c) IKEA – SWOT Analysis 17

Appendix d) IKEA – PESTEL Analysis 18

Appendix e) Philippe Starck 19

Appendix f) Ten Corporate Strategies Handing Piracy 20

Appendix g) Action Plans 21

9. REFERENCE 25

EXECUTIVE SUMMARY

“As the world’s largest furniture retailer, Ikea is famous for its ready-to-assemble furniture selling model and modern architectural designs on kinds of appliances and furniture. Although it has been continuously implementing low-end business strategy around the world, Ikea re-positioned its image to be stylish in China in order make visitors feel they have a fashionable taste for choosing house decoration stuff” (Olivier, 2013). After IKEA entered China, hanging around at Ikea furniture mall is an exciting and leisure activity and become a trend emerged amid young generations in Chinese.

Despite having customers visit their store from time to time. These customers are not loyal and IKEA cannot truly distinguish themselves from their competitors. This leads to problems such as losing market share, customers buying copycat products at a lower cost and the IKEA China not being able to contribute to the growth of IKEA group. Moreover, the IKEA management style being...