The survival of firms in the global market is depended not only on the market trends but also on the strategic choices employed. Firms with a well-known brand name, like IKEA, have to continuously alternate their strategies in order to secure their position within their industry. …
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The methods used for the implementation of these strategies are critical for the success of such projects. In the case of IKEA it has been made clear that the change of a firm’s existing operational strategies is feasible only if the relevant plans are fully supported by the organization’s stakeholders.
IKEA is the most powerful firm – in terms of its market position – in the Home Furnishings & Housewares Retail industry (Hoovers 2010). The success of the firm in the global market has been related to the following strategies: a) the emphasis given on innovation, b) the offering of fine products at competitive price, so that most consumers are able to buy them, c) the facilitation of shopping – ‘tape measures, pencils, shopping list and catalogues’ (Kendrick et al. 2010, p.340) are available in the firm’s stores for facilitating shopping. IKEA has become popular for ‘the design and layout of its stores’ (Griffin 2006, p.344); at the same time, the low prices of its products – compared to similar products of competitors – has been a key reason for the firm’s high level of sales – as of the particular industry – within the global market. ...
The criteria for the alteration of the firm’s existing practices are presented and analyzed focusing on the strategic choices that are most feasible – taking into consideration the current market context but also the prospects of the particular industry in the future. 2. IKEA - Situational analysis 2.1 Market context of IKEA IKEA is the leading firm in the Home Furnishings & Housewares Retail industry worldwide. The important distance between the profits of the firm and those of its competitors reveals the effectiveness of the firm’s policies but also its potentials for a further growth (Table 1, Appendix). For 2010, the sales of the organization have been estimated to 32,475.05 m (in millions) where the sales of the industry’s second competitor, the Bed Bath & Beyond Inc, have been estimated to 8,758.50 m (Table 1, Appendix), an impressive difference in terms of performance. In accordance with a report published in Internet Retailer (online periodical), in 2008 the sales of the industry’s firms have been increased ‘by 20% to $3.9 billion from $3.24 billion in 2006’ (Briggs, 2008). It is explained that the above increase has been mostly facilitated by e-commerce. The above increase indicates the prospects of the industry, under the terms that appropriate strategic choices are implemented. 2.2 SWOT analysis The current position of IKEA in the global market is significant; the prospects for further expansion are many. However, the delays in the development of the firm’s daily operations have not been avoided. Through the SWOT analysis, the operational status of the firm and the conditions of its environment
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