Running head: Strategy Case Study – IKEA Strategy Case Study – IKEA Lu, Jung-Fong Abstract The vision of IKEA (Ingvar Kamprad Elmtaryd Agunnaryd) is a little ahead from the typical style of earning profits merely. They have come up with the idea of making partnerships with their customers and ensuring them high quality of products at very affordable prices. This has been, practically, quite successful and led new ways to the modern business world. However, this can only be successful if the business organization maintains and upholds its values and behaviors. A strategic leader has to be critical in his thinking.
He should have the ability to see and plan the things for his followers what they cannot envisage. The success of IKEA is truly grateful to the leadership of its leader. Vision of IKEA At IKEA our vision is to create a better everyday life for the many people. (IKEA, 2012) Providing a high standard and happy living to every people of the society, and making a prosperous society brimming with happiness and economic boom are the vision of IKEA behind its business. Every profit-making firm primarily goal is to earn a large amount of profit. However, the vision of IKEA is a little ahead from the typical style of earning profits merely.
Vision includes the values of the fundamental ideas when the business formed. It predicts and sees what the future of the business and the potential consumers would be. So in this particular context of IKEA, their vision is unique. Forming an economic with cheap but high quality of furnishings and then made them affordable by every class of consumers. (Rosa, 2012) Mission & Business Idea of IKEA 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. IKEA, 2012) Therefore, IKEA aimed at providing product with enough quantity for much number or people, but still insist on low-price, high quality, and well designed. This all idea is the outcome of the thought of Mr. Ingvar Kamprad who was a resident of Smaland province in southern Sweden. This village area is stricken with limited resources. The people of the area are known best for their day in day out efforts, dedication, making the best usage of limited resources they have. So Mr. Ingvar Kamprad, founder of IKEA, applied the ideas to real life what he learnt from his vicinity.
He managed to come up with the business idea that was one of its own types i. e. providing quality goods to every man, regardless to his or her status and that too at a price that are very much affordable to everyone, every rich and poor. It is the roots of the IKEA Concept. Competitive Advantage of IKEA As per the main idea given by Mr. Ingvar Kamprad to IKEA, products to the ultimate consumers are sold at the most possible cheap or economical prices. The competitive advantage of this philosophy adopted by the firm drives more number of customers to IKEA.
Though it does not promises high level of profits but as it drives more number of customers so despite less marginal profit, more number of quantity sold, reduces the effect of low profits. Also, IKEA has come with an exclusive idea to making their “consumers their partner’s. This would lead a high level of customer loyalty towards IKEA. Following the idea of “You do your part. We do our part. Together we save money. ” IKEA not only has been successful in delivering high quality products at very affordable prices but it has also won a large number of customer-ship and permanent association with customers.
Difficult to Imitate In competitors’ point of view that whether this concept of IKEA is difficult to be imitated by competitors, there are two aspects to be considered. First is “to produce products at low prices” and second is “to win the loyalty of customers – making them the partners of the business”. It might be possible for competitors to develop a strategy to produce good quality of products at economical or cheap rates by developing smart and intelligent business strategies. However, it is not easily possible to win the hearts of the customers and to make them “partners” in your business.
Even if competitors are agreed to sell at low prices but it is not necessarily possible that customers trust the competitors, when they are already satisfied with the quality and products and rates of a firm that is already prevailing in the market. News about IKEA About the fundamental idea of business of IKEA is the philosophy of making customers their partner. They come up with the statement, “You do your part. We do our part. Together we save money. ” (IKEA, 2012) This concept is one of its own kinds that make IKEA, its vision and mission different from regular businesses.
The latest new strategy will see IKEA Group become energy independent and help millions of people live an affordable, sustainable life at home. (IKEA, 2012) IKEA extend their business idea for “better life” to “better and sustainable life”. IKEA build up the strategy which ambitious for long-term business growth, and positive effect on people and Planet. “We believe that sustainability should not be a luxury good – it should be affordable for everyone. ” said Steve Howard, Chief Sustainability Officer, IKEA Group.
IKEA believe that their new strategy can offer people better life with affordable price, moreover, deliver the idea of sustainability to consumers. A Strategic Leader – Anders Dahlvig A strategic leader has to be critical in his thinking. (Stephanie, 2008) He should have the ability to see and plan the things for his followers what they cannot envisage. IKEA CEO is an impressive strategic leader that can be taken as an example to learn from which. By the leadership of Anders Dahlvig, furnishing company has nearly tripled its number of employees and stores.
He seems to be committed to a broad new line up of policies promising a happily living society. His company upholds a mixed status on quality, though, in the midst of an increasingly tough economic climate but his persona and strategic leadership qualities are paradigm, especially for new strategic leaders. (MSG. com, 2012) Conclusion Strategic – Business Culture vs. Maximize Benefits It is, actually all about how firmly and professionally one remains strict to the strategies. If one is confident and sure about his ideas, he can do what ever he wishes for.
During the ten year in IKEA, Anders Dahlving helps IKEA survived during the period of economic recession. He gives IDEA a spirit, which can attract talent to work for IKEA. Moreover, make the employee and consumers to be faithful to IKEA. He makes IKEA a responsible company to building global growth and social good at the sometime. To sum up, Anders Dahlvig is free to create and implement strategic decisions as he sees best for the firm. References Inter IKEA Systems B. V. (2012). The Roots of the IKEA concepts. Retrieved November 2 2012 from: http://franchisor. ikea. com/concept. tml Rosa. (2012). Difference between Mission and Vision. Retrieved November 2 2012 from: http://www. lifehack. org/articles/lifehack/what%E2%80%99s-the-difference-between-mission-and-vision. html Madhavi Sadashiv Patgaonkar. (2012). The Challenge Of Strategic Management In Global Competition. Retrieved November 2 2012 from: http://www. isrj. net/publishArticles/1070. pdf MSG. com. (2012). Strategic Leadership – Definition and Qualities of a Strategic Leader. Retrieved November 2 2012 from: http://www. managementstudyguide. com/strategic-leadership. htm IKEA. com (2012).
IKEA Group Unveils New Sustainability Strategy: People & Planet Positive. Retrieved November 2 2012 from: http://www. ikea. com/us/en/about_ikea/newsitem/sustainability_strategy2012 Stephanie Mead. (2008). Critical Elements of Strategic Leadership: Beyond Corporate Strategy. Retrieved November 2 2012 from: http://www. cmoe. com/blog/critical-elements-of-strategic-leadership-beyond-corporate-strategy. htm Anders Dahlvig. (2012). The New Growth Strategy: How Responsible Companies Are Profitable Companies. Retrieved November 2 2012 from: http://www2. lse. ac. uk/publicEvents/events/2012/06/20120613t1830vOT. spx Riddhima Chopra. (2012). IKEA Case Study. Retrieved November 2 2012 from: http://www. slideshare. net/riddhimachopra/ikea-case-study Chris Maxwell. (2012). My Business Life – Anders Dahlvig. Retrieved November 2 2012 from: http://www. director. co. uk/MAGAZINE/2012/03_March/MBL_Anders_Dahlvig_65_07. html Jeremy Caplan. (2008). Ikea CEO Anders Dahlvig on Surviving a Bad Economy. Retrieved November 2 2012 from: http://www. time. com/time/business/article/0,8599,1859917,00. html#ixzz2BETGrO9j Anders Dahlvig. (2012). The IKEA Edge: Building Global Growth and Social