IKEA

STRATEGY FORMULATION
GROUP - 5
Introduction
 IKEA is a privately-held, international home products retailer that sells flat pack furniture,
accessories, and bathroom and kitchen items in their retail stores around the world.
 IKEA was founded in 1943 by 17-year-old Ingvar Kamprad in Sweden and it is owned by a
Dutch-registered foundation controlled by the Kamprad family.
 The company, which pioneered flat-pack design furniture at affordable prices, is now the
world's largest furniture retailer.
 CEO: Jesper Brodin
 Headquarter: Delft, Netherlands
Vision Statement
"To create a better everyday life for the many people."

Business Idea
"To offer 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."

Market Positioning Statement

"Your partner in better living. We do our part, you do yours. Together we save money."
BUSINESS LEVEL STRATEGY
 IKEA business strategy is built upon the IKEA concept. The IKEA Concept starts
with the idea of providing a range of home furnishing products that are affordable
to the many people, not just the few.
 It is achieved by combining function, quality, design and value – always with
sustainability in mind.
 The following points constitute integral elements of IKEA business strategy.
 Offering the lowest prices
 Increasing variety of products
 International market expansion strategy
 Benefiting from strategic alliances
FUNCTIONAL LEVEL STRATEGY
CORPORATE LEVEL STRATEGY
 Intended Strategy
 Unrealized strategy
  Emergent strategy
 Transnational Strategy
 Hub and portfolio method
 CORPORATE LEVEL STRATEGY
Sr Strategy Benefit Type of Year Phase in IKEA's
No. advantage Replication
1 Entry into Norwegian market Expansion into a new market and Scope 1963 Explorative
beginning of IKEA's internationalization Internationalization
2 Starting a first store in Switzerland This being a conservative market, Scope 1973
success here would guarantee success in
other markets.
3 Conceptualizing the IKEA business Reducing efforts on exploration and Long term 1976
after failure in Japan emphasis on exploitation
4 While sticking to the fixed product Better market penetration by offering Competitive Late Rigid replication
range, IKEA should be adapting their localized products at the same time advantage/Long 1980's to
product as per local market while deriving the benefit of mass production. term early
maintaining its focus to derive benefits 1990's
from economies of scale. (US)
5 Entry into Japan The learning in this market where Competitive 2006 Flexible replication
packaging is crucially important would advantage/Scope
enable IKEA to learn how to make more
precise demands to their suppliers.
6 Starting production units in Russia and Save charges on import duties to deliver Competitive 2016,
China lower priced products to customers advantage 2013
THANK YOU