Name: Lady Gonzabay Course: 8/3

Research a company, their strategies, and good and bad decisions they've made, you may
have to make some inferences
The following points are integral elements of IKEA's business strategy:
1. Offering the lowest prices. Profitability is one of the solid foundations of IKEA's
competitive advantage. The global furniture retailer can offer low prices thanks to
a combination of economies of scale and technological integration in various
business processes.
2. Growing variety of products. A wide variety of products also belongs to IKEA's
list of competitive advantages. There are 9,500 products in IKEA's portfolio and
the company renews its product range by launching approximately 2,500 new
products each year. The company is also increasing its presence in the food and
catering industries.
3. Expansion strategy of the international market. The furniture and home
improvement chain has traditionally been aggressively developing new markets.
IKEA Group operates 422 stores in 50 markets worldwide. 19 new IKEA stores
opened in 2018 alone. In addition, IKEA has 22 collection and ordering points in
11 countries, 41 shopping centers in 15 countries, and 38 distribution sites in 18
countries.
4. Benefit from strategic alliances. The global furniture retailer takes full
advantage of strategic alliances and strategic alliance formation is placed at the
center of IKEA's business strategy. The list of the most successful collaborations
includes a partnership with Apple to explore the possibilities of Augmented
Reality as a home furnishing tool, a partnership with LEGO for the development
of new products, and a partnership with Adidas in sharing knowledge about the
customer behavior. Experience and competence in forming strategic alliances
can be specified as one of IKEA's most important competitive advantages.

List the key decision points the company faced over the last 10 years, where the CEO made
direction setting choices, for better or worse.
 Study of furniture design, self-assembly, advertising and decide that the
most appropriate way to reach the greatest number of people is possible
through the use of the catalog and the exhibition of furniture.
 The current vision of the company was developed, as well as the
importance of a strong corporate culture in an international environment.
 An international expansion of stores took place, especially in Western
Europe, but it was also a global expansion at the level of production and
suppliers.
 In this period, the great transformation of Ikea has been experienced,
becoming a global presence, using the direct internet distribution channel
in addition to the stores, and expanding the number of product lines.
Name: Lady Gonzabay Course: 8/3

 At Ikea they are aware of the importance of the environment, the main
raw material that Ikea uses to design and manufacture its products is
wood, a recyclable resource and renewable.
 The company has been looking at how it can go further, incorporating
nine design principles, including designing products so that they last
longer or can be easily improved or repaired.
 Ingvar seeks an ownership structure to create the best possible conditions
for total independence and a long-term business perspective. He
describes this as trying to give the IKEA brand “eternal life”. His solution is
to separate the ownership of the retail operation from the IKEA concept
and the IKEA brand — to keep these separate roles in independent
business groups, operating under a franchise system.
 A forest fire destroys 18,500 hectares of rainforest in Malaysian Borneo.
When Ingvar Kamprad, hears about it he wants to contribute to the
rainforest’s regeneration. So, in 1998, we begin financing the “Sow a
seed” project, leading to more than 12,500 hectares of rainforest being
replanted.
 IKEA's franchise system in 1983 did not develop, and difficulties in
cooperation led to the end of the Japanese business. On the second try
20 years later it is successful, proving that good things happen if you try
again.
 Since 2000, IKEA has reduced its prices by more than 60 percent.

Does the company face a key decision point today? If so, what are the key choices facing
the company?
Currently, IKEA is in the middle of transformation of its business model that
made it successful in the global scale. Specifically, for many decades IKEA
business strategy was largely based on having giant out-of-town warehouses,
where shoppers pick their own furniture and then build it at home. But now it is
looking increasingly at city-centre stores, online shopping, home delivery and
assembly, and more radical ideas such as leasing furniture and selling on
websites such as Alibaba. The current innovation is based on their marketing
strategies and the advertising. As Ikea has been expanding rapidly in Europe and
also in Asia thus therefore it is recommended that Ikea should just keep up their
promotions, and the marketing strategies in order to maintain customer loyalty.