Ikea’s Global Strategy Case
1. Discuss IKEA’s country-specific advantages and its firm-specific advantages.
IKEA experiences many country-specific advantages. First, IKEA's location in Europe made it relatively painless for the company to spread throughout the rest of Europe. Along similar lines, IKEA has been able to send employees who know the local language of foreign locations to set up stores, bringing the IKEA philosophy and standard practices along with them. IKEA also embraced its advantage of its heritage, focusing on quirky advertising in North America, poking fun at Swedish heritage in commercials.
Since its creation in 1943, IKEA has created many firm-specific advantages for itself. First, IKEA has standardized the process of offering disassembled furniture to be put together at the consumer's home. This was a groundbreaking concept, allowing for a much larger inventory at each store, and in turn allowing customers to actually obtain their products at the day of purchase. The cash and carry shopping formula; you can go to the rack directly to collect the product and go home to build it by yourself. As a result of this new store layout, IKEA has been able to allow sales clerks to focus more on in-store displays and fast-moving lines, rather than loading and unloading large, bulky furniture inventories. IKEA has simple and plain staff levels, lowering the fixed costs and giving more freedom to its employees. This management structure also helps making decisions in a faster way.
Another huge advantage IKEA has created for itself is its global sourcing of 1,350 suppliers in 50 countries. With these connections around the globe, it has been able to cut prices at its stores around the globe, while maintaining sufficient quality standards. Because of these connections, IKEA experiences huge economies of scale, allowing it to match rivals' quality and undercut prices worldwide. It's creative business model and store layout has created its own advantage for IKEA, as
IKEA experiences many country-specific advantages. First, IKEA's location in Europe made it relatively painless for the company to spread throughout the rest of Europe. Along similar lines, IKEA has been able to send employees who know the local language of foreign locations to set up stores, bringing the IKEA philosophy and standard practices along with them. IKEA also embraced its advantage of its heritage, focusing on quirky advertising in North America, poking fun at Swedish heritage in commercials.
Since its creation in 1943, IKEA has created many firm-specific advantages for itself. First, IKEA has standardized the process of offering disassembled furniture to be put together at the consumer's home. This was a groundbreaking concept, allowing for a much larger inventory at each store, and in turn allowing customers to actually obtain their products at the day of purchase. The cash and carry shopping formula; you can go to the rack directly to collect the product and go home to build it by yourself. As a result of this new store layout, IKEA has been able to allow sales clerks to focus more on in-store displays and fast-moving lines, rather than loading and unloading large, bulky furniture inventories. IKEA has simple and plain staff levels, lowering the fixed costs and giving more freedom to its employees. This management structure also helps making decisions in a faster way.
Another huge advantage IKEA has created for itself is its global sourcing of 1,350 suppliers in 50 countries. With these connections around the globe, it has been able to cut prices at its stores around the globe, while maintaining sufficient quality standards. Because of these connections, IKEA experiences huge economies of scale, allowing it to match rivals' quality and undercut prices worldwide. It's creative business model and store layout has created its own advantage for IKEA, as