Ikea Case Studfy

SUBMITTED BY:

Usman Nisar

2093148

BBA (Hons)

Assignment # 2nd

SUBMITTED TO:

Tariq Mahmood

Q#1: What are IKEA's firm specific advantages? Country specific advantages?

Answer:

The furniture industry has long been localized with most players from the industry concentrating on the domestic market only. Swedish furniture industry boasted of the best player in the market IKEA who for the first time decided to go global. They decided to go in for an ethnocentric view of global marketing with their products being shipped after un assembling the parts to bring down shipping costs. Another innovative move by IKEA was the move to involve the customer in its value chain to bring down costs drastically. With IKEA’s products the customer did the assembling himself at home. IKEA also had a very successful culture that facilitated its expansion into various countries. However, this ethnocentric view did not turn out to be successful in the USA where in they ran into a few problems like different tastes in furniture and cultural change. In addition, more competition and changes in Swedish laws on furniture made expansion into the USA very difficult. Longer shipping periods added to the expansion woes and IKEA had to adopt a more adapted culture to enhance sales in the USA.

 IKEA’s most important company specific advantage was its value for money. IKEA used this advantage for its expansion plans all over the world. IKEA when they failed in the USA had to highlight this specific advantage to bail them out of the financial crux they had gotten into.

 Convenient to use and rigid in structure was another company specific advantage that IKEA could have looked at as IKEA focuses on involving customers in the assembling process. This advantage could be a big hit in markets like the USA where each person has the basic expertise in home working such as plumbing and fixing furniture.

 One more company specific advantage that IKEA has is its legacy of quality in...