Premium Essay

Ikea Proposal

In: Business and Management

Submitted By aoifelora
Words 1857
Pages 8
| |

|Entry Proposal for IKEA |
|International market entry to Puerto Rico |
| |
|International Retailing |
|Tuesday 12th March 2013 |
| |
|Zoe Cole |
|Aoife Hughes |
|Tinuola Omoyele |
| |
| |

Contents
Terms of Reference / Executive Summary 2
Introduction 3
Main Body / Findings 4
References 10

Terms of Reference / Executive Summary

In this report, we propose IKEA expand its international market into San Juan, Puerto Rico, South America as mode of entry.
The purpose of this report is to make a case for the expansion of IKEA into a new market.
The reason we chose Puerto Rico is because the research has already been completed for such a move, and only narrowly missed out to the Dominican Republic as a new destination for the self confessed flat-pack-giants.
Zoe, Tinuola and I hope that our proposal will convince you that Puerto Rico is a good move and hopefully the next move.

Introduction

We propose IKEA go into Puerto Rico, San Juans ,with the hopes of
Over the past number of years IKEA has had great success stories of entering new countries and is now…...

Similar Documents

Premium Essay

Ikea

...IKEA Christopher A. Bartlett and Ashish Nanda With a 1988 turnover of 14.5 billion Swedish kronor (U.S. $1 SKr6 in 1988) and 75 outlets in 19 countries; IKEA had become the world's largest home furnishings retailer. As the company approached the 1990s, however, its managers faced a number of major challenges. Changes in demographics were causing some to question IKEA's historical product line policy. Others wondered if the company had not bitten off too much by attempting major new market entries simultaneously in two European countries (United Kingdom and Italy), the United States, and several Eastern bloc countries. Finally, there was widespread concern about the future of the company without its founder, strategic architect, and cultural guru, Ingvar Kamprad. IKEA BACKGROUND AND HISTORY In 1989, furniture retailing worldwide was a fragmented industry in which small manufacturers and distributors catered to the demands of their local markets. Consumer preferences varied by region, and there were few retailers whose operations extended beyond a single country. IKEA, however, had repeatedly bucked market trends and industry norms. Over three and a half decades, it had built a highly profitable worldwide network of furniture stores (see Exhibit 1). COMPANY ORIGINS IKEA is an acronym for the initials of the founder, Ingvar Kamprad, his farm Elmtaryd, and his county, Agunnaryd, in Smäland, South Sweden. In 1943, at the age of 17, Kamprad began......

Words: 3535 - Pages: 15

Free Essay

Ikea

...Strategy adopted? http://www.oppapers.com/essays/The-Strategy-Adopted-By-Ikea/740556 1 Explain, in details, the strategy adopted by IKEA, and how it successfully did the positioning.  *** At business level strategy Focus Strategies By implementing a cost leadership or differentiation strategy, IKEA choose to compete by exploiting their core competencies on an industry-wide basis and adopt a broad competitive scope.   Alternatively, IKEA can choose to follow a focus strategy by seeking to use their core competencies to serve the needs of a particular customer group in an industry. In other words, IKEA focus on specific, smaller segments (or niches) of customers rather than across the entire market.   Focused Business Level Strategies involve the same basic approaches as Broad Market Strategies.    Focus strategies can be based either on cost leadership or differentiation. Focused Cost Leadership Strategy IKEA that compete by following cost leadership strategies to serve narrow market niches generally target the smallest buyers in an industry (those who purchase in such small quantities those industry-wide competitors cannot serve them at the same low cost).   Global furniture retailer IKEA provide customers with “affordable solutions for better living” through use of the focused cost leadership strategy.   The company offers home furnishings that combine good design, function, and quality with low prices.   IKEA does this by offering low-cost, modular furniture......

Words: 1820 - Pages: 8

Premium Essay

Ikea

...IKEA Analysis Report Your Name Argosy University IKEA’s Marketing IKEA has a unique perspective with the approach they use in marketing. The starting point begins with customers’ needs (IKEA, 2013). The focus is on local marketing versus mass marketing and competitors. This differentiates IKEA from other home good suppliers by anticipating what consumers are seeking and many times providing exactly they desire before they realize they need it. The marketing task is simple, “To build the IKEA brand and inspire people to come to the stores” (IKEA, 2013). The marketing mix is a combination of items that work together; it is often referred to as the four p’s in marketing. Price, Promotion, People, and Process are the four p’s that IKEA has embraced. Price is within their controls, they offer quality home goods at low affordable costs. They are able to keep costs low with designing from within, sourcing raw materials for production, and selling in their own stores. Promotion is achieved with iconic bold blue and yellow colors signifying a brand with value. IKEA uses many forms of media in their promotional marketing strategy; the annual catalogue is the most popular. The catalogue highlights many new home goods and accessories with interior suggestions that are attention grabbing and captivating. The catalogue has become a staple of what is new and trending in the homes of many customers. IKEA’s website is another interactive way it reaches a distinct local market,......

Words: 2093 - Pages: 9

Free Essay

Ikea

...doc. dr. Matevž Rašković ------------------------------------------------- Študijski progam: VPŠ ------------------------------------------------- Študijsko leto: 2012/2013 Seminarska naloga pri predmetu Poslovodenje v mednarodnem okolju IKEA ------------------------------------------------- Študenti: Vpisne številke: ------------------------------------------------- ------------------------------------------------- 1. Žiga Slapnik 19502547 ------------------------------------------------- 2. Miha Majetič 19501188 ------------------------------------------------- ------------------------------------------------- Ljubljana, 24.5.2013 Kazalo vsebine 1. UVOD 3 1.1. OPREDELITEV PROBLEMA 3 1.2. NAMEN 3 1.3. CILJ 3 1.4. METODOLOGIJA DELA 4 3. PREDSTAVITEV PODJETJA 6 3.1. Poslanstvo 7 3.2. Vizija 7 3.3. Poslovni rezultati 8 4. ANALIZA TIPA MEDNARODNEGA PODJETJA 9 5. KLJUČNI VIRI KONKURENČNIH PREDNOSTI PODJETJA 11 6. Opredelitev organizacijske strukture 12 6.1. ORGANIZACIJSKA STRUKTURA PODJETJA IKEA 12 7. POTEK NABAVE 13 8. PREDNOST GLOBALNEGA POSLOVANJA 15 9. IKEIne NAJVEČJE PRODAJALNE PO SVETU 15 10. NAČIN VODENJA 16 11. ORGANIZACIJSKA STRUKTURA IN NJIHOVE SLABOSTI 17 11.1. Pomankljivosti decentralizirane organizacijske strukture: 17 11...

Words: 4574 - Pages: 19

Free Essay

Ikea

...The current issue and full text archive of this journal is available at http://www.emerald-library.com International Marketing Review 16,4/5 406 Strategic consequences of retail acquisition: IKEA and Habitat Department of Retailing and Marketing, The Manchester Metropolitan University, Manchester, UK Keywords Retailing, Acquisitions, Globalization, Market segmentation Abstract Takes an historical perspective, considering the events leading to the sale of Habitat by the Storehouse group to the Swedish furniture retailer IKEA in October 1992. Focuses on the strategic issues involved in the acquisition of an international retailer by a retail organisation that is truly global in its operation. Describes the development of both retailers (with particular emphasis on their international development) and a description of the terms of the sale. Areas for further discussion and analysis arising from the case can include: the future development of Habitat within the global strategic framework laid down by IKEA; analysis of the motives of Storehouse in disposing of Habitat, including the future development of a smaller Storehouse; and issues relating to market segmentation and positioning, with specific reference to retail brands. Gary Warnaby International Marketing Review, Vol. 16 No. 4/5, 1999, pp. 406-416. # MCB University Press, 0265-1335 Habitat ± early development The first Habitat store was opened in Fulham by Terence Conran in 1964. By meeting a demand for......

Words: 5563 - Pages: 23

Premium Essay

Ikea

...IKEA was founded by Ingvar Kamprad. He was born in Småland in southern Sweden. In 1943, when Ingvar Kamprad was 17, he registered his company. The name IKEA is formed from his name’s initials (I- Ingvar & K- Kamprad) plus the first letters of Elmtaryd (E) & Agunnaryd (A), the farm and the village where he grew up. This IKEA originally sold typical general store goods. Five years later, in 1948, IKEA introduced furniture into the range. After 10 years, the first IKEA store on 6700 square meters was opened in Älmhult, Sweden. In 1963 IKEA’s first store outside Sweden opened in Oslo, Norway. 325 IKEA stores are located in more than 38 countries all over the world. IKEA supplies a broad range of home furnishing products in a great variety of styles. IKEA products are identified by single word names referring to places, rivers, and lakes in Scandinavia or common things in everyday life. Most of the names are of Swedish origin. IKEA stores are built usually very large with many displays inspired by realistic room settings or real-life homes. IKEA stores include also restaurants serving traditional Swedish food, grocery stores selling Swedish-made items and usually there is a play area named Småland for children from the age of 3 to 10. Low prices are the “cornerstone of the IKEA vision” and the most important thing for their business idea. The “flat-packs” are really useful to reduce labor-, shipping-, and storage costs. IKEA publishes an annual catalogue in 38 different...

Words: 448 - Pages: 2

Premium Essay

Ikea

...number of high-level employment policies. More recently, a trend towards re-centralisation has been observed (Arkin, 1999) and global companies operating in a large number of countries have been shown to have a high degree of co-ordination and integration of their international operations, and have large wellresourced corporate HR departments (Scullion & Starkey, 2000). However, in research by Kelly (2001), irrespective of a centralisation or decentralisation strategy, all MNC subsidiaries surveyed were found to exercise some degree of autonomy in formulating their own HR policies but may require head office permission for significant developments involving major expenditure. Local subsidiaries were found to develop proactively strategic proposals and persuade head office to adopt these, as well as the corporate head office looking to subsidiaries to learn new ideas and fill gaps in corporate policies (ibid.: 555). International HR roles In general, there has been limited attention paid to the role of the corporate HR function (Scullion & Starkey, 2000: 1061) and it has been assumed to be relatively weak given the literature on board membership which emphasises that HR is not typically a key player in the development of corporate strategy (Hunt & Boxall, 1998:770). There is also the danger that the HR function is not perceived as a full partner in the globalization process due to the burden of bureaucratic central procedures and ethnocentric and parochial HR systems and......

Words: 9324 - Pages: 38

Free Essay

Ikea

...why IKEA decided to procure from India are due to cheap labor and high quality. Before entering India, IKEA felt that strategically, India would put them at an advantage compared to its competitors. The question Barner faces in this case is weather it is strategic for IKEA to stay in India. Leaving India If IKEA were to leave India it would need to find a supplier that is comparable to the suppliers in India. The new location must be statically located, where IKEA could capture transportation value. Suppliers in this new geographic location must be able to produce at the level of production, quality, and reliability as the ones in India. There was no mentioned of the performances in India, but it would be safe to assume that rug making was a specialized handicraft that India encompassed. IKEA would need to find suppliers that has or would be able to meet that skill level. Leaving India would mean that IKEA in away is “giving up” on India. Large companies like IKEA, find India attractive to source from because of its cheap labor and skilled labor. If IKEA were to leave India that would demonstrate that they do not support India’s child labor laws. If IKEA were to do so, consumers would look at other companies currently sourcing from India to do the same. That would in turn affect the economy of India; cause the labor force to loose jobs and income. What IKEA think is a positive move to address the child labor situation could possibly make it worst. Not only is IKEA......

Words: 1143 - Pages: 5

Free Essay

Ikea

...pose the greatest threat? Why? While Ikea is moving from an international strategy to a global-standardization strategy, there is the threat of possible limited resources and the change in consumer taste. Recently there has been an increasing awareness of preserving the forests and a concern for global warming. As a result, Ikea needs to develop an alternative to wood as a source of furniture and goods. The problem is the uncertainty of when that shift will take place. It could be within the next 10 years or maybe the next 100 years. Regardless, Ikea needs to consider these external factors. Currently, they need to focus on how to meet the demands of the customers so they’re able to keep up with competition. From this point the debate could be whether Ikea should look into alternative resources for wood so not only are they able to keep up with the competition, they’re also prepared for future changes. Or, rather put those expenses into finding a new supplier to add onto their current supply to keep up with the expansion. Ikea alone uses almost 1% of all wood used commercially around the world. The company said it plans on becoming “forest positive” by 2020, meaning that, despite its continuing high demand for timber, it intends its business to have overall positive effect on the world’s forest. What does this mean? The commitment of this approach means it will be growing at least as many trees as it uses to make products by 2020. Ikea also intend to become of the biggest......

Words: 707 - Pages: 3

Premium Essay

Ikea

...Ikea offers a wide range of products like furniture (e.g chairs, tables, bedroom sets, cabinets), appliances (taps and sinks), textile (mattress, rugs, towels) and food. According to general manager, Erik Donker Duyvis, Ikea products are made out of high quality materials (Bani, 1998, Jan 02). Besides being a store solely selling furniture, Ikea also offers a restaurant right in the heart of the store. Duyvis also mentioned that Ikea offers furniture and household goods at a reasonable price (Bani, 1998, Jan 02). So how does Ikea promote their products and services? Ikea has its official website which keeps customers up to date on their current and upcoming products. Besides that, Ikea also promotes its products on various social media platform like Facebook and Twitter. With the advance of technology, Ikea also has its own mobile application which is available for smart phone users (Ikea, n.d.). Ikea also promotes their products through their annual catalogues (Ikea, n.d). The employees in Ikea are helpful and friendly. They are well-trained in providing information for their customers and also help them in looking for products that they want. For example, every product in Ikea has its own code so employees can search for it on the computer and help customers locate the desired item. Ikea is also a company that values its employees by providing perks and benefits like health insurance and discount to them.(Ikea, n.d.) People recognize Ikea by its huge words......

Words: 364 - Pages: 2

Premium Essay

Ikea Proposal

...IKEA - PRODUCT LAUNCH IN INDIA (BANGALORE) Project Submission - 1 Group-7 1. Jai Prasanna Sudhan S.P (1211024) 2. Karthikeyan T (1211029) 3. Kalayappan S (1211103) 4. Ravishankar N (1211134) 5. Karthik P (1211347) Management Decision Problem: To evaluate the market opportunity for IKEA in Bangalore, India Marketing Research Problem: 1. To assess the opportunities for furniture industry in Indian market 2. To identify the segments and target market relevant to the product line of IKEA 3. To determine the branding and positioning strategy for these target segments 4. To evaluate the sustainable competitive advantage of IKEA in Indian market 5. To evaluate the effectiveness of the IKEA retail concept in Indian market Components of MR problem: S.No. | Marketing Research Problem | Components of the problem | 1. | To assess the opportunities for furniture industry in Indian market | i) How attractive is Indian market to invest in furniture industry? ii) Evaluation of Indian organized and unorganized players and their unique features in the market | 2. | To identify the segments and target market relevant to the product line of IKEA | i) What is the customer profile in Bangalore w.r.t age, income, marital status, occupation and socio economic classification? ii) Who are the potential customers for the IKEA products? iii) What are the behavioral characteristics of the targeted customers? | 3. | To......

Words: 759 - Pages: 4

Premium Essay

Ikea

...growth and popularity. Customers of IKEA makes purchases towards different products because of the value of the product. IKEA is able to show an image of relaxed, comfortable, yet efficient in service in every store. They are able to attract customers with products that do not look cheap. IKEA strives to make their furniture look attractive by using light, natural wood. The marketing strategy has been to build on Swedish home-based stereotype of clean and efficient service. Customers are attracted by how well the furniture is designed. The furniture is also functional, high quality, and its price is competitive. For many customers, these associations form a basis of a general outlook, and set of priorities for general life. The IKEA values that inspire the brand can be categorized as economic, social, and environmental. These values differentiate the IKEA brand. IKEA’s marketing focuses on customer value by communicating how customers can co-create solutions to real life problems. Advertising in the catalogue, brochures, and the website all communicate this value proposal. The focus is not entirely on furniture, but also on the value that can be realized by customers who utilize the offered resources in a personalized fashion to provide solutions to their own distinctive real life problems (Edvardsson & Enquist, 2009). Reference: Edvardsson, B. & Enquist, B. (2009). Sustainable Business in Service Companies. Lessons from......

Words: 2236 - Pages: 9

Premium Essay

Ikea

...• Week 2 Mini Case: IKEA List IKEA’s external and internal challenges. Looking at IKEA’s challenges, which ones do you think pose the greatest threat? Why? How would you address the challenges? IKEA’s external challenges are mainly Target and K-Mart. Target has recently recruited top designers and launched a wide range of low priced furnishings. On the other hand, K-Mart has done much of the same thing and enrolled Martha Stewart to help with the design of its home furnishings. IKEA’s main internal challenge is since the company’s inception (1943) no strategic decisions have been made without Mr. Ingvar Kamprad, the founder. Since he has stepped down in 2013, his three sons have taken over leadership of IKEA. Another internal challenge has been that IKEA is privately held through a complicated network of foundations which creates constraints in accessing large sums of capital that is needed for rapid global expansion. Walmart entered a period of difficulties after Sam Walton stepped down. Do you anticipate IKEA having the same leadership transition challenges? Why or why not? In my opinion, any company that’s founder is involved from inception until he/she is not physically/mentally capable any longer and then transitions to different leadership will be problematic. When Mr. Kamprad stepped down from IKEA in 2013, his three sons took over leadership. More than likely, they will never value and commit to the company like their father did. Hopefully Mr.......

Words: 470 - Pages: 2

Premium Essay

Ikea

...click on the "print" button in your browser to print this page. The IKEA Concept The IKEA Concept is founded on a low-price offer in home furnishings. Concept The IKEA Concept is based on offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. Rather than selling expensive home furnishings that only a few can buy, the IKEA Concept makes it possible to serve the many by providing low-priced products that contribute to helping more people live a better life at home. The IKEA Concept guides the way IKEA products are designed, manufactured, transported, sold and assembled. All of these factors contribute to transforming the IKEA Concept into a reality. How the IKEA Concept Began The IKEA Concept began when Ingvar Kamprad, an entrepreneur from the Småland province in southern Sweden, had an innovative idea. In Småland, although the soil is thin and poor, the people have a reputation for working hard, living frugally and making the most out of limited resources. So when Ingvar started his furniture business in the late 1940s, he applied the lessons he learned in Småland to the home furnishings market. Ingvar's innovative idea was to offer home furnishing products of good function and design at prices much lower than competitors by using simple cost-cutting solutions that did not affect the quality of products. Ingvar used every opportunity to reduce costs, and he......

Words: 1028 - Pages: 5

Premium Essay

Ikea

...Current Event Report IKEA Ikea wants to enter the Indian retail market by selling its Billy bookcases. The Indian government beat a “hasty retreat” to allow foreign retailers into the country with minority Indian partners. Under their new rules, an outside retailer can only own 51 percent of their Indian operations. The rest will have to be owned by local partners. The Indian Finance Minister, Pranab Mukherjee explained his decision to suspend the operation of the retail proposal, but he did not report whether it would affect multi-brand retailers or just single-brand retailer. Ikea will benefit greatly if the decision is approved. They have wanted to set up stores in India. Many political parties and shopkeepers protested against the government’s plans to permit foreign retailers. So, Ikea decided to cancel their new conferenced that they had scheduled to introduce plans of setting up stores in India. Ikea already buys a great amount of their furniture and other items from India. There has been great opposition to big and general merchandise retailers, such as Wal-Mart. India these them as a huge threat to small stores in India since it would threat their existence. Whereas, Ikea may not be such a huge threat because they are only planning on implementing on selling a specific brand of furniture. Ikea is a self-assembly furniture store which was founded in Sweden. Right now they have about 300 stores in more than 35 countries. Ikea also has a......

Words: 436 - Pages: 2