Business strategy of IKEA Essay Example | Topics and Well Written Essays - 2000 words

Business strategy of IKEA - Essay ExampleStrong Connection with Culture The IKEA article of furniture has become an essential part of the culture. Its perennial existence has make it the de facto furniture company and many of its products have a long history. Employee Focus on Thrift In an environment of increasing competition every withstand penny has value. The practice and culture of employees being thrifty to ensure that they utilize every last penny properly indicates that the firms culture dictate that resources be used properly. Staffing levels are appropriate, and not excessive, and even top employees fly economy to indicate that squandering of resources will not be tolerated. Entrepreneurial odour of the Kamprands Kamprand was known for his entrepreneurial abilities and skill of identifying profit opportunities. He had a knack of choosing the ventures with most potential. Even with IKEA he was able to establish a low personify supply line very early into the firms existe nce. High Turnover to Visits ration IKEA poses a high visits to turnover ratio. For every million visits to the interject revenue of 34 million is generated. This is a really good figure as it reflects the firms brilliant selling skills and customer loyalty. Strong presence in 25-50 category old population The strong connection of Sec B and C to IKEA is a strongpoint for the firm. Even some portion of the A class consider IKEA as an option. The customers are smart, hence IKEA doesnt need to do the pitch for everyone. Weaknesses The weakness of IKEA will help us evaluate what is wrong with the firm and how it can alter it for the procession of its owners and stakeholders. Informal ownership structure/No Shares The absence of shareholders and a proper board of directors means that there is little accountability of managerial... This essay discusses that inhabitation furnishing was a market with immense potential globally. The global sales for the industry reached a staggering $60 0 Billion in items such as furniture, textile, and floor coverings. A significant percentage (less than 50%) of these sales were constituted by furniture stores. IKEA was standing strong with a 2.5% share in the global market and stint sales of greater than $20 Billion. The market was highly fragmented, with most of the competition occurring locally rather than globally. Strengths are the core competencies and strong points of firms. A look at the strengths of IKEA would give us an idea of how the firm has been so successful throughout the years. The IKEA furniture has become an essential part of the culture. Its perennial existence has made it the de facto furniture company and many of its products have a long history. The weakness of IKEA will help us evaluate what is wrong with the firm and how it can improve it for the betterment of its owners and stakeholders. The absence of shareholders and a proper board of directors means that there is little accountability of managerial pr actices. The domination of the Kamprand family means that the corporate structure format of firms is missing and the firm continues to be more of a family businesses influenced by incumbents rather than managerial experts. IKEA has taken the rough route in times of tough economic conditions. It has got unloosen of workers and insisted on cost cutting rather than innovation. This, however, was the need of the hour as the economic conditions demanded such action.