Strategic Management and Ikea

1) How has IKEA succeeded in expanding across the world using a standard enjoin of products and a standard strategy in the home furniture and furnishings industry, in which divergent cultural influences are likely to be at their healthfulest? premier(prenominal) of all, seems reductive say that IKEA provides a standard range of products having weigh to the unbelievable width of this range (which al abjects, therefore, to raise many an otherwise(prenominal) variables of many types of heterogeneous products in this look is almost completely bypassed the limit traditionally connected with the offer diverse depending on the country of destination).In fact, the product range is so capacious (The IKEA products on offer Exceed 12. 000 items in number) to al miserable a lack of diversification for export musical scoreet every type of consumer that is role of the scrape audience stack find products of his choice, ignoring the others (which get out be coveted by other consumer s pore on other features). In this way this strategy exceeds its traditional limit.As it is written in the text under friendliness IKEA has get throughd the impossible, to create a range of products attractive to consumers everywhere, in countries with very dissimilar cultures, and to apply a formula for presentation and sale of those products which reinforces the attractiveness . With regard to the standard strategy used by IKEA in my view its mastery relies on a few points well described in the article. First, the target is well defined (and wide, and in all countries without exception). It may sound bromidic that the self-proclaimed focus of IKEA is young people of all ages. In cosmos the market is primarily young people, who are well educated, liberal in cultural values, white collar, but with limited means because of their stage of life story and family cycle, and in the process of setting up or expanding their homes because they are having children. The bit successful point of the unitary strategy of the troupe is the interest to achieve and maintain a price advantage (in light of the take of the target, of course). This greet and price leadership is achieved by a combination of strategies large-quantity purchasing, the push to gain vigor ever-cheaper suppliers in ever-cheaper markets (sourcing in developing economies has risen from 32% to 48%), affordable logistics, store location in relatively cheap suburban areas, and a do-it-yourself approach to marketing and distribution. Low costs are translated into low prices as IKEA pursues a deliberate price leadership strategy.In growth to this, the Distribution and Promotion system is modern and inexpensive and easily replicable and acceptable to consumers around the world. So, everything in IKEA works to create a great opportunity, overcoming (as already said at the beginning of my answer) the limits of the not-diversified offer per country and culture in this particular industry sector, cha racterized by strong cultural differences. 2) Is there a limit to this enlargement? Does IKEAs history illustrate the nature of such(prenominal) a limit?I theorize the main limit to the expansion of the bank line of IKEA is cultural and, therefore, be able to contain work costs, slice continuing to adapt its products to markets other than those served today. The example of the American market is instrumental in this regard. On that occasion, IKEA had to wait a long time in the lead being accepted in the United States, producing profits. That was a very dangerous investment, yet the American market in that commodity sector has its ingest characteristics, presumably, very well known and different from European hotshots.The entry into the U. S. market, to be profitable, had to wait an important adaptation activities never done before. I appreciate in this case when it comes to expansion it is done in a geographical sense (and not profits), so an entry into other markets to IKEA today seems to be instead complicated (making reference only to markets and economies very different from those set about up to date) for the reason just talked.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 slight strategically important than the American. From the point of view of the enlargement of the volume of business and profit, I buzz off no knowledge to be able to express with certainty, however IKEA in the text is placed at the highest 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 nourish their volumes trying to increase it as much as possible. 3) How has IKEA managed to creatively mix the benefits of bay window consumption and mass production with the desire fo r style and modernism of product? IKEA is able to take full advantage of the cost benefits of mass production ( mensurablely selecting its employees and suppliers are able to meet stringent quality standards at very competitive set from IKEA) and mass consumption because the citizens of all the world, belong to the target specified by the caller-up and reported above, and have an inclination of ?? odernity and style quite comparable, therefore the need to adapt its products to different markets is quite limited in this field (happened only for America). However, the need for fashion and contemporaneity 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 point it is clear and perce ivable as reported in the article IKEA has combined the cost-reducing benefits of mass production and consumption with attention to the style required 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 world(prenominal) brand. It has managed to innovate and respond to Continuously spays 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 icon imitated by competitors from around the world. 4) Has IKEA elect a strategy of cost/price leadership or one of product differentiation? We could say that IKEA has merged the two strategies in a single large successful director. At offshoot glance, without a careful study of the phenomenon IKEA, it would seem eas y to classify the choices made by the company as cost and price leadership helped by a not differentiated offer.But in answer to the starting question, I have already explained how, for me, one can not speak of a lack of differentiation. It is short 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, advancement 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. Ho wever, this oversimplifies the approach adopted and underplays the complexity of the product, with its packaging of different services. If it were rightful(a) that the strategy was no to a greater extent than a form of focused cost leadership, it would be difficult to understand why 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. Instant accessibility, customer participation in value-adding, the combination of low cost and high quality all mark the product out as unique and therefore as carrying a competitive advantage, one which is continuously renewed as products are amend and renovated. IKEA is always ready to innovate. ) How far do you think that IKEA can look into the future in framing its strategic management? I believe that this model of strategic management is winning. It is and it will be collect 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 reap 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. view 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.