E Commerce

THE University of HUDDERSFIELD Business School

International Business BA (Hons)

< BHO-0171 Electronic Commerce>

(HKMA)

Module Examiners : Abbdul Jabbar

Year: 2010/2011

INDIVIDUAL ASSIGNMENT

Case Study Analysis

A better everyday life

By

Leung Sze Wa Teresa - 1078713

Contents

Executive Summary

Introduction

Internal & External Analysis

SWOT Analysis

PESTLE Analysis

Business Models

Recommendations

Analysis of Business Models

Conclusion

References

Appendix 1

Website Navigation

Executive Summary

Evaluate a global company IKEA’s e-Business strategy by internal and external analysis

under its current methods of working through the internet world with particular attention to

security issues of improvements

Introduction

IKEA Concept and history

IKEA has approached its world domination project with a missionary zeal since 1970s. Till

today, IKEA is the No.1 retailer of furniture items in the world offering a wide range of well-

designed, functional and inexpensive home furniture products protruding the famous IKEA

Concept. From modest background, for more than 65 years, IKEA has gradually expanding

the market share starting from Europe, North America, Australia; now her focus is on

merging markets especially in Asia including Hong Kong, in order to keep the organizational

growth as well as sales turnover.

The IKEA story begins in 1926 when founder Ingvar Kamprad. The first IKEA store opens in

Almhult, Sweden 1958. IKEA is a worldwide furnishing company grand total with operations

in 38 countries and 309 store and 272 stores in 25 countries are owned by the larges IKEA

franchisee, the IKEA Group other 37 stores owned and run by other franchisors 17 countries,

one store in Netherlands is owned and operated by Inter IKEA Systems B.V. all over the

world.

It is a Swedish-based company built on the idea of offering 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. IKEA was founded in the 1940s by the entrepreneur Ingvar Kamprad,

who still has control over the company through the INGKA Foundation in the Netherlands.

The name IKEA is an acronym for Ingvar Kamprad Elmtaryd Agunnaryd where Elmtaryd is

Mr Kamprad’s native farm and Agunnaryd his native village. The IKEA group is solely

owned by the foundation through a holding company (INGKA Holding B.V). It is therefore

not listed on any stock exchange.

The picture below illustrates the operational structure of the organization. The legal structure

differs somewhat from the operational one.

The foundation is the main shareholder in

the holding company. The purpose of the

foundation is to support furniture design,

education and training in the area of

production and design. The group support

functions (legal services, human resources)

should be considered as strategic functions

for the IKEA group as a whole and

incorporated as IKEA Services AB under

Swedish law and is also the legal basis for

the EWC. Expert functions such as ICT,

food services, and retail equipment operate

under economies of scale and support the

basic operations.

From its inception in 1950 the company expanded at a moderate pace until the beginning of

the 1980s. From an annual turnover of EUR 1.2 billion in 1984 there has been a rapid

development to EUR 19.8 billion in 2007. The biggest expansion has been in the late 1990s.

The first IKEA store opened in Sweden in 1958. The first store outside Scandinavia opened

in 1973 in Switzerland. In 1975 the first IKEA opened at Tsim Sha Tsui, Hong Kong.

Vision

IKEA create a better life for everyone, everywhere, every day.

Mission

The business idea behind IKEA is to offer a wide range of home furnishings with good

design and function at prices so low that as many people as possible are able to afford them

and still have money to spend to create a better everyday life for the majority of people

Internal & External Analysis

SWOT Analysis

Swot Analysis Of Ikea(Hk)

SWOT analysis of IKEA(HK)

Strength

-IKEA has the own industrial group, which produces wood-based furniture and wooden components. The industrial group of

IKEA is called Swedwood, its operations cover ever step of production, from forestry, saw milling and board manufacture to

furniture. As every production step is under the IKEA control, IKEA can have efficient productions which enable it to

maximize productivity and minimize waste-generation.

-IKEA has its own design group. These can make sure that their products can match the trend of the industry. What’s more,

the present of industrial group can co-operate with the design group, which efficiently convert the design into the finished

product.

-IKEA has the strong brand image. By the recent research of Datamonitor, IKEA ranked 41st among the best global brands

around the world in 2006 with a brand value of $8,763. The strong brands enhance customer loyalty and lead to repeat

purchases.

Weaknesses

- Not enough distribution

channels. As there are only three retail shops in Hong Kong, it is inconvenience to the customers. What’s worse, the potential

customer of IKEA, especially those would like to buy the home accessory will have a chance to switch the buying from IKEA to

the shop which is near home.

-The problem of product recalls. Sometimes IKEA recall the product due to faulty base. Just take an example, IKEA had

recalled Parodi and Apelsin glass cases in January 2007. This act will give out a poor perception to the customer.

Opportunities

-Sourcing from China is one opportunity. Sourcing from low cost countries like China would reduce its costs and enable IKEA

to concentrate on increasing its market share through competitively priced product offerings.

-Bright prospect of online sales. There is an opportunities to gain more revenue in online retail sales. As the IKEA website is

one of the most visited home furnishing websites in Hong Kong, a provision of purchasing the products online...

PESTLE Analysis

Organization’s e-Business Strategy

E- Business Of Ikea

IKEA is a Swedish based furniture and furnishings company that sells “everything from cutlery to kitchens” (Jones, G 2007).

The business revolves around the philosophy of “We do our bit, you do your bit and together we save money”. The company’s

success is based on its ability to adapt to change, sensitivity to customers and acting sensibly with suppliers. In 2006, IKEA

made plans to expand their e-commerce strategy to allow people from the United Kingdom to purchase goods online (Kemp, E

2006). However, e-commerce has had advantages such as increased accessibility and disadvantages such as increased costs,

and by late 2007, IKEA’s Chief Executive Officer and President, Anders Dahlvig announced that there would be no further

investment in online stores (Carroll, B 2007). This suggests that the e-commerce site performed poorly (Paul Holding, cited

Jones, G 2007).

Values at the core of IKEA

IKEA integrates distribution with sales (Kapferer, J 2007), but in some cases also themanufactures the products. The logistical

system, for managing the flow of components into warehouses and transferring the products to its stores, is reputed as one of

the most refined in the world (Kippenberger, T 1997). There are 2300 suppliers to the business, located in several continents,

such as Europe and Asia (Klevås, J 2005), and all are given technical assistance, help to secure loans, engineering support,

and are aided to boost production to global standards (Kippenberger, T 1997). IKEA designers work with producers to find

ways to save costs, as well as attempting to avoid waste in their designs, which is consistent with the values underpinning the

business model.

IKEA values design for low cost production, bulk buying, flat packaging (Klevås, J 2005), and providing functional products at

a very affordable price, while their customers provide self service, home transport and self assembly. This works in favour of

both participants in an exchange, as it saves both the company...

http://www.oppapers.com/essays/E-Business-Ikea/167107

E-Commerce @ IKEA

BROOKLYN — IKEA announces a new website design, currently rolling out in 24 countries worldwide. The new website features an

increased focus on the sharing of IKEA furnishing knowledge with consumers. Where other retailers are delivering basic data on

products, prices, and promotions, IKEA is dedicated to granting the customer full access to its celebrated home furnishing knowledge. 

Room images on the new site are fully interactive- users can engage with the images and see tips and ideas for a variety of products

and everyday situations. "The trick was to develop a user interface that balances efficiency and discovery," says Gene Liebel, Partner

and Director of User Experience at HUGE. "Research shows that IKEA customers have very high expectations for the IKEA website —

they expect an experience that is about much more than just the presentation of basic product information. They want to learn how to

improve their lives at home, and they want everything integrated into a single, usable workflow, organized by the rooms of their house."

The new site architecture is based on the rooms of the house: Bedroom, Children's Room, Dining Room, Kitchen, Living Room,

Workspace, Basement, Garage, Attic, Hallway & Entrance, Laundry Room, and Youth Room. Another change is an expanded role and

more prominent position for "Ask Anna", the automated customer service chat character driven by artificial intelligence. Anna has

proven to be very effective in providing 24/7 support and advice to millions of IKEA customers worldwide, reducing support costs. 

Says Allan Lidforsen, IKEA Online Group Manager, "It is a great challenge to translate the IKEA brand values and visual identity to the

Internet, and we are very content with the work HUGE has done for us in this area. Their design feels very much like IKEA, but what's

even more interesting, they keep us focused on the evolving goals and habits of the online customer." HUGE is the interactive agency

of record for IKEA and handles strategy, creative, and production for the furniture retailer's retail and corporate websites in over 20

markets worldwide.

I always felt logistics was one of our biggest problems. We do very well considering the size and scope of our [worldwide] logisitics,

however things could be improved as IKEA is known for having issues with stock levels (e.g. I just visited the store yesterday to buy

some storage bins; they have received 1,000 lids for bins, but the bins themselves are only arriving in a month!). This is an overall issue

with IKEA, not specific to ecommerce. However this will definitely have to be addressed if the website becomes fully transactional and

things are not in stock etc (i.e. how exactly will you handle backorders online?). One of the services home shopping offered was to

maintain backorders and call clients when the items came in. In stores, if the items were not in a client would have to keep coming back

to check. Will it be the same procedure online? Will the customer buy half their stuff, pay shipping, buy the other half and pay shipping

again?

As to ecommerce/home shopping specifically: I believe the shipping network will have to be looked at (many clients think our shipping

rates are exorbitant) and then they can come up with more reasonable shipping rates. Shipping costs are probably one of the most

difficult things for online retailers to deal with. Charge too little and you WILL lose money; charge too much and people will think twice

before buying from you. Think about it- your $100 bookcase might end up being double the cost now because of shipping- odds are,

you’re better off buying it locally.

Recommendations

There are three words I often associate with the IKEA brand: cheap, innovative & stylish. Every

customer knows that these characteristics are deeply etched into IKEA’s product design and

development philosophy. Only some customers know that these characteristics are communicated

through IKEA’s digital offering – for example, last year, they launched the Facebook Showroom

Campaign. In my opinion, advertising agency, Forsman & Bodenfors, have devised a world-class

creative strategy for IKEA by leveraging the cost-free Facebook platform, specifically, the photo tagging

and comments functionality, to create mass brand buzz. As a corollary, IKEA is now positioned as being

more mature in social media as well as a conversational, engaging brand.

However, social media is only one piece of the digital channel puzzle. Another piece is online retail, or

e-commerce, and to date it’s still missing. There are reasons why an online retail channel hasn’t been

pursued just yet– all unknown to me. Perhaps it’s that their current distribution model can’t handle a

multi-channel offering without significant process re-engineering. Perhaps it’s that they don’t have any

serious competitors in the online market. Or perhaps their research shows that customers don’t need it

(which I highly doubt). Either way, I believe e-commerce should be part of IKEA’s digital strategy and

should be the next big offering from IKEA.

Here are some reasons why:

1. The current in-store customer experience is painful

I’ve commonly heard that the in-store experience quickly degrades from being fun and exciting to long

and boring. Why? Because of the physical store layout, which is uni-directional. All customers are

funnelled down one path and have to pass through all showrooms before they can exit. The path to

cross-sell/ up-sell couldn’t be any more obvious, let alone anymore painful. An e-commerce solution

would assist in diluting this negative customer experience by offering customers with a new channel

(that’s flexible and multi-directional) that they can peruse around. Cross-selling/up-selling would also

be present, but subtly displayed to the user as recommendations.

2. The digital channel empowers the customer

One characteristic the digital space has over the in-store experience is the ability to tangibly model, in

real time, your dream home or office. In the digital world, the customer is empowered. Everything is

available at the tips of your fingertips…literally. IKEA provides a downloadable CAD 3D-modelling

application (PC’s only – sorry Mac fans) which gives customers full expression to DIY. Install a cabinet…

move a heavy shelf…that’s just two clicks. Don’t like it? Click. And it’s all blown away. This highly

immersive, visual, tangible and somewhat realistic experience cannot be provided to customers in the

real world currently. Imagine being able to buy all of your furniture in a hassle-free, express checkout

once you’ve modelled your dream home or office.

The only change I’d make to the downloadable 3D-modelling application is to remove it and replace it

with a web application. This way, IKEA wouldn’t be isolating the Apple-using market (which by

consumer behaviour shares similar characteristics to IKEA customers – innovative & stylish). I would

also consider other technologies, other than Flash, to develop this new web application (once again, so

as not to isolate the Apple market). However, having said this, I do realise that the user experience

should not be dictated by the technology stack.

3. IKEA shoppers are cult-like

IKEA shoppers love IKEA products. They love to talk about what they’ve purchased and recommend

their favourite items to their friends. All you have to do is look at IKEAFANS.com

[http://www.ikeafans.com/] There’s a real cult following for IKEA products (not as disturbing as Apple,

but still somewhat formidable). With an e-commerce capability, I would tap straight into this cult

energy. Imagine being recommended a product by a friend on the IKEAFANs.com forum and being able

to directly purchase that product within the forum itself. You’re improving customer experience by

eliminating the hassle of having to travel to your closest store and then search in-store for that

particular product.

4. The current digital customer touch points need to be interlinked

A quick scan of IKEA’s customer touch points in their digital channel indicates social media presence

(Facebook, Twitter, YouTube), an online and downloadable product brochure, online accounts,

personalised shopping lists as well as the downloadable CAD 3D-modelling application. Only some of

these digital assets are interlinked. E-commerce can act as the common glue between these touch

points, resembling a hub-and-spoke framework. For example, customer should be able to purchase a

product they’ve found from the online product brochure. Likewise, traffic can be driven from a tweet to

a particular product page.

With the Australian Online Retail market ramping up, let’s hope IKEA can get on board and offer

customers with an e-commerce channel.

Business Models for improvements

Andrew Ranger and the Taboo Group have just recently launched a campaign for Where Is called Whereis the party,

they got the word out there by tagging influential Melbournites in the promotional advertisement for the event.

Ikea used this same type of viral spreading but instead of them tagging they asked the punters to tag themselves in

photos in the Ikea Furniture competition. 

For the opening of the new IKEA Malmö store, we created a Facebook campaign. The mission was to create something engaging that

would have the potential of spreading by itself beyond the borders of the Malmö region. But at the same time staying relevant and

focusing on IKEA's offer, their products. Without messing around.

Advantages and risks at security issues

Swedish furniture firm IKEA experienced a security blunder at its online store this week, exposing the private

details of hundreds of customers online.

A Web server configuration error left a database file containing the customer information temporarily unprotected and

accessible to any visitor to IKEA's Web site. The glitch revealed the names, addresses, telephone numbers and e-mail

information belonging to customers who had ordered a catalogue from IKEA.

According to an IKEA spokeswoman, just one Internet customer actually gained access to the information, and the store

plugged the hole shortly after it was alerted. The company is carrying out an investigation into the incident, she said. "To our

understanding it was an isolated incident on the North American Web site," said the spokeswoman. "The site closed it down

pending an inquiry, and we're awaiting further details of how it was carried out."

This is the latest in an increasingly long line of blunders to blight big name companies that have entered into e-commerce.

Consumer groups are also more concerned about the impact this could be having on customer confidence.

Conclusion

IKEA focus on off line but little on online

Compared to traditional furniture store, IKEA there is a big breakthrough in furniture design

and innovation. On the Visual, IKEA Do not mean to use bright colors, with different colours

to attract different consumer, more emphasis on furniture. Durability, In addition, IKEA in the

catering industry, introducing native Swdedn, and to attract consumers. IKEA Shopping, even

intimate provides little boy games, so that consumers put more with kids shop of the heart.

But most of the consumers because promotions and to IKEA shopping, so if IKEA can have

more price policy can provide to the consumer, I certainly can have on sales Obvious results.

Most consumers think IKEA indoor fixed line not clear at some area, in the hope that IKEA

can improved, so that the consumer has a better, more comfortable shopping space.

Food commodities and varied: IKEA Most of the consumer group towards younger, but ignore the needs of seniors, it is recommended that IKEA you can push Out of food for seniors, can increase some of the move vintage goods, evoked memories seniors, against the IKEA food commodities “should be need for a more detailed description of contents and introduction, let the consumer’s right to lear

The price is more popular: on the product price, consumers still feel that there is room for

Bargaining, it is recommended that IKEA Commodity prices. Get more profit, IKEA

consumer group most of them are college students over intellectuals, More interested in after

design products, IKA “Should increase creativity and practicality on the commodities, people.

Advertising and marketing to increase: because IKEA advertising and sales promotion

programme of less branch distribution only to the crowd of more local, relative to its. He

sells, IKEA Advertising a bit inadequate. If you want the IKEA specialization, opening more

branches will inevitably need to be more. More funds and buman resources, but “ad is

absolutely not less”

To increase the brand image and brand service to the consumer through e-Commerce

References

http://franchisor.ikea.com/showContent.asp?swfId=facts0

http://www.ikeafans.com/

http://www.ikea.com/ms/en_HK/about_ikea/local_project/local_involvement.html

http://images.businessweek.com/ss/06/07/top_brands/source/41.htm

Appendix 1

Ikea’s Virtual Display Center

IKEA, which originated from Sweden, is one of the biggest home furnishing stores in the United States

and has branches in many parts of the world and their ecommerce template is one of the best. This

Swedish store has been selling ingenious designs and high quality furniture for bedroom, living room,

kitchen as well as textiles and children furniture at affordable prices. And it is just so nice to see that

their online store is fully functioning. The display room of the site is almost exactly the same when you

visit an IKEA store in your locality. Upon visiting the site, the guests are asked what place or country

they are in so as to give them the exact and available products in their area. They are then invited to

relax and feel comfortable while doing their online shopping in such a way as they are shopping in

their local IKEA store.

The store’s online display center shows virtual rooms where shoppers can see the different parts of

the house in a real life setting, which can also be seen on any IKEA showrooms. When you enter their

virtual living room for example, an array of living room furnishings appear and one can notice that

there are + (plus) signs on the different parts of the furnishings. These + (plus) signs describe the

furniture on display and its function as well as give the buyer more options such as color and style.

When the buyer decides to buy the product, s/he may simply add it to his/her shopping cart.

Indeed, IKEA’s online shop makes almost no difference in shopping at any IKEA branches. All it takes

is just a little of your imagination. Ikea’s ecommerce design   makes their virtual store customer

friendly. You can easily compare styles and prices while trying to imagine how it feels to sit and lie

down on your desired bed and sofa.

Website Navigation

IKEA Singapore aims to pull the

plug on all incandescent lights by

2012 [Press Releases]

April 1, 2011 by Eugene Tay  

Filed under News

Leave a Comment

Leading home specialist IKEA is dedicated

to creating a better everyday life for the many people. Not only does IKEA

offer affordable and quality home furnishing solutions, it is also committed

to integrating sustainability into its business practices and product range.

In its continuous bid to help Singapore move towards a greener and more

sustainable environment, IKEA Singapore will begin to phase out all

incandescent light bulbs in its stores and targets to completely eliminate

them by 2012.

IKEA’s Responsibility Beyond Home Furnishing

Since the beginning, the goals of sustainability and environmental design

have been integral to the IKEA business strategy and IKEA is constantly

doing what it can to help create a world where it can take better care of

the environment, the earth’s resources, and each other. This

improvement is a never-ending job at IKEA.

One of IKEA’s global efforts includes the collaboration with World Wide

Fund for Nature (WWF) to decrease carbon footprint by promoting

responsible and sustainable use of resources. The partnership includes

projects on forestry, climate and cotton.

In Singapore, IKEA has proactively embarked on many green initiatives

like Say “No” to Plastic Bags, Earth Hour, the solar-energy SUNNAN lamp

campaign and providing green parking lots for bicycles and charging

stations for electric motorcycles. IKEA also offers many environmentally

friendly products such as the RATIONELL waste system and IKEA 365+

foodsavers, to encourage Singaporeans to live a more sustainable life at

home.

Small Steps with Lighting

Lighting is a basic necessity and it commonly accounts for almost 25

percent of electricity consumption in a typical household. In line with the

global IKEA initiative, IKEA Singapore decides to take ownership of the

environment and make a stand by pledging to pull the plug on all

incandescent lights by 2012. IKEA offers lighting solutions that will enable

Singaporeans to live a more sustainable live at home. By encouraging

Singaporeans to adopt energy-saving lighting solutions, Singaporeans can

take pride in creating a home that contributes to a healthier planet, and

helps them save money.

With over 7 million visitors from September 2009 to August 2010,

eliminating incandescent lighting is the simplest way for IKEA Singapore

to lead the charge for IKEA customers (and Singaporeans) to enact small

changes at home and reduce environmental footprint in Singapore. It’s a

little step with a big impact on the environment.

Over 112,000 low-energy light bulbs have been purchased at IKEA

Singapore from September 2009 to August 2010. By replacing their

incandescent light bulbs, IKEA customers have saved energy up to 5.15

GW, enough to power up about 5,730 households in Singapore.

Make An Easy Switch To Low-Energy Lightings

As a leading home furnishing retailer in Singapore, IKEA hopes to support

Singaporeans in making informed choices on energy-efficient lightings.

Thereby helping to speed up the market transition to energy-saving lights.

Did You Know?

IKEA offers lighting solutions that are more efficient and have less

negative impact on the environment. IKEA range of energy-saving light

bulbs is based on three main energy-saving techniques: CFL (compact

fluorescent lighting), halogen and LED (light-emitting-diode).

CFL bulbs are a great alternative to traditional incandescent light bulbs. They last up

to ten times longer (10,000 hours versus 1,000 hours) and use 80% less energy than a

conventional incandescent light bulb. One 20-watt light bulb provides as much light

as a 100-watt incandescent light bulb, without getting anywhere near as hot.

Halogen light bulbs use 30% less energy and last 2-4 times longer than a conventional

incandescent light bulb.

LED lights use 70% less energy and burn at least 20 times longer than a conventional

incandescent light bulb.

A small effort in changing a light bulb can translate to a significant amount of energy

and monetary savings and helps contribute towards a more sustainable Singapore.

If you replace a 25-watt incandescent light bulb with a 7-watt energy-saving CFL

bulb, you will save 0.018kw of energy and 4g of carbon emissions per hour.

IKEA Singapore attracted over 7 million visitors in its stores from September 2009 to

August 2010. If every IKEA visitor purchases and switches to an energy-saving CFL

bulb, it will help Singapore reduce her energy consumption by 276 GW in a year* and

CO2 emissions by 138 million kg. Together they will also save up to $66.5 million in

electricity bills.

If every of the 1,145,900 Singaporean household replaces one 25-watt incandescent

light bulb with a 7-watt energy-saving CFL bulb, Singapore would reduce her energy

consumption by 45.17 GW, enough energy to power up 50,190 households for a

year*. It would also greatly reduce carbon footprint in Singapore, with about 22.58

million kg reduction in CO2 emissions. And together, they can save up to $10.89

million in electricity bills. (An average Singaporean household living in a five room

flat consumes approximately 450 kWh and spends $108.45 on electricity bills from

August 2010 to January 2011. The cost of electricity in Singapore is $0.241 per kWh.

*Assumption: the light is on for 6 hours a day for 365 days)

Energy-saving light bulbs may cost more to purchase initially, but they are more

affordable in the long run. An IKEA SPARSAM 7-watt energy-saving light bulb costs

$3.75 more than an incandescent light bulb giving off a similar level of brightness.

However, due to their lower energy use, one can save about $9.80 per year in the total

average cost of purchasing the light bulbs and electricity.

IKEA is Planning to Sell Solar

Panels and Clean Tech Products

August 12, 2008 by Eugene Tay  

Filed under Design and Tech, Strategy and Leaders

1 Comment

It’s always interesting to visit an IKEA store

and discover the wide range of furniture and home solutions.

The inspirational design and low prices of the products is amazing. In the

near future, you might even find solar panels and green tech products at

IKEA.

According to the Cleantech Group, IKEA plans to invest €50 million in

clean tech startups over the next five years and develop clean tech

products in the following areas: solar panels, alternative light sources,

product materials, energy efficiency, and water saving and purification.

Johan Stenebo, Managing Director of IKEA GreenTech, said that the clean

tech products will be similar to other IKEA products:

Really low prices, and they should be of very good quality. That’s the only

thing we look at, we would never look at anything else, we would discard

anything else that doesn’t fall into those boundaries

The next time you’re at IKEA, remember to shop for solar panels, clean

and green products for your home.

For companies that provide green products in Singapore, better watch out

for the Swedish giant and get ready. IKEA is able to shift consumer

behaviour towards green products through its low prices and quality

design. For other big local retailers, what are you waiting for?

IKEA marketing strategy

The IKEA vision, business idea and market positioning

statement provide a framework for all IKEA marketing

communication worldwide.

The IKEA vision is "To create a better everyday life for the

many people."

Our business idea is "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."

Our market positioning statement is "Your partner in better

living. We do our part, you do yours. Together we save

money."

By communicating the content of this framework and

encouraging customers to experience the IKEA concept, we are

building the IKEA brand. The IKEA brand is the sum total of the

emotional and rational values that consumers associate with

the IKEA tradesmark and the reputation of our company. The

brand image is the result of over 50 years work by IKEA co-

workers at all levels all over the world.

What we do, what we say, the products we offer, the price we

offer them at, the presentation of our range and the information

we provide our customers all contribute to our image. The

overall task of IKEA marketing communication is to build the

IKEA brand and inspire people to come to the stores.

The IKEA concept builds on a relationship with the consumer.

Nine key messages are used within the IKEA marketing

communication to build this relationship and give an

understanding of how we can fulfil our customers needs. These

are briefly described below.

click here to go back to main menu

the IKEA concept is based on the market positioning statement. "We do our part" focuses on our commitment to product design,

consumer value and clever solutions. By using inexpensive materials in a novel way and minimising production, distribution and retail

costs, our customers benefit from low prices.

the IKEA marketing mix

IKEA has a long tradition in marketing communication focusing primarily on printed media which has proven its values and success to the

company over the years. Other media now being used to an increasing degree include TV, radio, and internet based communication.

The IKEA marketing mix consists of 4 different areas of focus.

the IKEA product range is our starting point. All other marketing communication is used to amplify the product range.

the store is the IKEA retailers primary medium for presenting and communicating the range, its low price and the IKEA concept.

the IKEA catalogue is the main marketing tool with around 70% of of the annual marketing budget being spent on this alone. It is

produced in 38 different editions, in 17 languages for 28 countries. 110 million catalogues were circulated last year - three times higher

than that of the Bible, with 13 million of these being available in the UK.

the IKEA advertising, PR and other types of communication are complements to the IKEA range, store and catalogue are used to

spearhead the penetration of our target market.

the UK marketing department

IKEA advertising in the UK is intended to raise awareness of the IKEA brand and drive traffic to the stores. Some people love our unique

style of retail advertising, some hate it, but everyone who sees our advertising has a strong opinion and subsequently it provokes

conversation and debate. Despite having some of the most controvertial television advertising campaigns in the UK, we have raised

awareness of our brand, let people know we are different to other home furnishing companies and most importantly increased sales. The

advertising department includes all aspects of advertising and brand communication from television advertising and sponsorship to

magazine and radio promotions. Advertising is used to support many different areas of the business including brand awareness, store

themes, catalogue drops and store openings.

brand research

To remain at the forefront of a changing market we need as much research on customers, the home furnishing sector and our

competitors, as possible. Many different areas of market research, reports and statistics both internal and external are taken into

consideration when planning any communication or marketing campaign.

room magazine

This is a European IKEA magazine that is available in all stores in Europe. It is also mailed out to 150,000 IKEA Home Card holders in the

UK. It contains lifestyle features on IKEA customers and how they live, product news, and tips and ideas for the home. Similarly to the

catalogue, this is produced centrally, but each country has control of a number of pages to communicate their country specific messages.

IKEA food services

The IKEA restaurants are important in providing our customers a place to eat and relax while shopping. There are 3 different concepts

offering food in IKEA stores in the UK currently. The main restaurant serves meals based on our Swedish heritage, with traditional dishes

such as Gravadlax and meatballs with Lingonberry relish. There are also bistro areas which sell localised snacks such as; hot dogs in the

UK, baguettes in France, and pizza in Italy. The IKEA Swedish food markets are also in every store and encourage customers to take

home a taste of Sweden. The wide range of traditional Swedish foods helps customers understand our Swedish origins and also lives up

to our low price promise.

internet

IKEA.com is the global site where you have an overview of IKEA as a company. From the global site it is possible to access all local sites.

One of the main tasks of the internet is to display product information and availability which is updated constantly. Background

information about the company and store information is also crucial. Each store also has their own space with contact details and

directions, events, special offers and local information.

communication and interior design

Com-in is a "unique" resource who work actively to secure our competitive advantage through the development of the IKEA retail concept

and the store as a media. All Com-in specialists are from either an interior design background or visual merchandising, and are

responsible for the presentation or our product offers using all current range presentation medias and techniques. The Com-in

department gives the store inspiration and vitality and works closely with the store sales and logictics teams to ensure our customers

always see something new and exciting, and want to come back again and again.

public relations

The primary concern of this function is to protect the IKEA corporate identity but also to communicate our vision, business idea, brand

values, concept and trademarks. By informing journalists of news and information within IKEA through press releases, website

information, catalogue distribution and product launches, we are able to communicate with a huge audience through their readers.

The overall identity of IKEA is based in Småland, historical and thrift are strong characteristics of the region and its people. All IKEA

policies live up to this standard from the products we sell to our internal travel and recruitment procedures.

All areas of the IKEA marketing department work together to give consistent messages to our customers and strengthen our brand

identity. By focusing on communicating the key messages of the IKEA concept, our vision, and business idea we can work together to

create our vision of " a better everyday life for the many people."

fact sheets

IKEA increases summer sales via

mobile initiative

By Rimma Kats

July 18, 2011

Retail giant IKEA is establishing itself in the mobile

space via an integrated campaign that not only drives consumers to its

locations, but also helps build the company’s email and SMS database.

The company is running mobile banner ads within Pandora’s iPhone app.

Consumers can get offers and discounts and find the nearest location via

the ad.

“As businesses continue to focus resources on mobile advertisements in

an effort to drive traffic and attract new customers, it is essential that the

pages consumers are directed to are fully optimized for mobile,” said Nick

Taylor, CEO of Usablenet, New York.

IKEA is one of the largest home furnishings retailers worldwide, with more

than 275 stores in 36 countries, including 35 in the United States.

Let’s shop

The mobile banner ad reads “Find your back-to-school style – see your

local IKEA store.”

When consumers tap on the banner, they are redirected to a mobile

landing page where they can save up to 20 percent on a kitchen right

now.

Consumers can also find their back to college style, browse new lower

prices, share their opinion on this month’s topic and sign up for IKEA text

messages and email.

The mobile ad also gives users the option to find the nearest store

location where they can go and buy the products they want.

Consumers also have the option of signing up to get IKEA’s catalog and

participate in this month’s poll.

Database

The company is using the mobile banner ads as a way to increase email

and SMS signups.

Via the ad, consumers can either choose yes or no on whether they would

like to get a catalog, emails or text messages from the company.

This is not IKEA’s first foray into mobile.

In 2008, the company launched a mobile loyalty program to build a

database of consumers interested in receiving discounts from the home

furnishings retailer.

The text-to-enter loyalty program is a means for IKEA to start a dialogue

with interested consumers. BCode is powering the texted discounts (see

story).

“If businesses direct users to a non-optimized site after clicking on a

mobile ad, it will lead to a poor user experience and can alienate many

potential customers,” Mr. Taylor said.

Final Take

1: Stores : - The way the company expands horizontally, is through a tightly controlled franchising system. This both

saves costs and minimises international risks.

2: Sales & service - the company is tightly integrates its sales- and service-operations with customers, the latter

taking over 80% of the work (and loving it). Huge cost-savings, also benefiting customers.

3: Supply, manufacturing, design - The company is equally well-integrated back up the value chain, with suppliers,

manufacturing, and design, and has—since the 90s—been expanding its operations in that direction. Some cost-

savings by introducing savings up the logistics-chain, and more flexibility in manufacturing.

4: Management structure - non-public virtual entity that licenses the IKEA brand and is able to offset international

tax-differences by being located in Belgium/the Netherlands and changing the terms of licensing-agreement as

needed.

You can draw your own conclusions from that, together with what I've written before.

Things that stuck out from the book included:

Ingvar Kamprad, the founder, who has both a trader's mentality and is at the same time a community-person;

Sweden, IKEA's country of origin, whose restrictive tax policies actually resulted in pushing the business to

become a global company;

IKEA's cost-philosophy, which is very frugal and part of the company-culture, and also transmitted to the

supply side and to customers. Some problems retaining top-employees as wages are not competitive;

Its franchising-system, which somewhat surprised me, can be explained by the scientific way in which IKEA's

operations has been built up. The more rational, the "easier" (a relative term) to replicate. It's also in line with the

business's rapid global expansion and its drive to push down costs;

It's a private company, which makes it less visible and (relatively) less accountable to the public.

Its vertical integration with suppliers and customers, enabling it to quickly respond to new trends and

problems, as well as introduce higher cost-savings than its competition.

IKEA executes strategy

July 23, 2010 Susan Lyle Leave a comment Go to comments

THE ACADEMY OF BUSINESS STRATEGY

BUSINESS PROCESS IMPROVEMENT (FINANCE) BLOG

IKEA executes strategy

AUTHOR

Maxine Attong (CBS) BSc CMA

I visited the IKEA store in New Jersey, USA, last Saturday and witnessed a

company that is demonstrably executing its vision. The IKEA vision is to

“create a better everyday life for people. We make this possible by

offering a wide range of well designed, functional home furnishing

products, at prices so low that as many people as possible can afford

them.” At the store, the commitment to price reduction is evidenced in

the physical layout of the store and the concept of an independent

shopper. This company has asked and answered the question “How can

we reduce the cost of servicing clients at the retail outlet without

compromising on the quality of our product and service?” As explained on

the IKEA website “IKEA customers are actively involved in the shopping

experience. The IKEA Concept relies on customers to choose, collect,

transport and assemble IKEA products themselves. Customer involvement

contributes to IKEA low prices. That is the idea behind: “You do your part.

We do our part. Together we save money.”

This company has reduced its retail cost by adequately equipping the

shopper with the relevant tools and information to make him/ her a

complicit and critical element of its cost savings strategy. (At the in-house

IKEA eatery, signs remind the shopper of the contribution they make to

low food prices when they clear their tables).

The store is a treasure trove of a wide range of items at a wide range of

prices. The showroom comprises different rooms of a typical house – living

room, bedroom, kitchen, bathroom etc. Each beautifully and completely

decorated room illustrates how the products can be used to create

different settings. An entire room can be literally purchased, complete

with accessories and decorations, and be reassembled and recreated at

the shopper’s home. Each item is tagged, so that the shopper can note

the item description, its serial and stock number, the bin and aisle

numbers (warehouse location) or the general areas at which it is housed.

Pencils and shopping lists are strategically located throughout the store

with concise and clear instructions on how to complete and use the list.

There are white items, delicate items, fragile items, small items on

display. There are no “Do not touch” warnings or “Break and pay” threats.

Sales associates are stationed throughout the store ready to serve.

The shopper selects his/ her products from the well lit and accurately

labeled warehouse. Each item in the warehouse is labeled as tagged, in

the display room, with the identical description, a small diagram and

colours identified. Computers can be used to locate items that the

shopper may not have properly written down. The IKEA catalog and

warehouse attendants also assist with the location of items.

The shopper, who chooses to self check, operates an automated machine

that scans the items, and accepts cash or debit/credit card payment. The

shopper packs his/her purchases and exits the building.

IKEA executes its Vision of having “prices so low” by adopting cost

reduction strategies that are a tangible part of the shopping experience.

The shopper is viewed as having a vested interest in keeping the prices

low.

Very often Business Process Improvement Projects struggle with making

the Process Improvement results tangible and part of the daily fabric of

the business lives. Teams have great ideas and wonderful plans of how to

improve service levels or curtail cost and better satisfy the customer, but

very often the intention gets lost in translation. Execution is difficult and it

is not an immediate process. IKEA’s alignment of strategies undoubtedly

took years and will continue to evolve as the company keeps ahead of

competitors and changing environments. Just think about it, five years ago

those self check out machines were probably prototypes. Now that the

machines work, IKEA has incorporated the use of them as a way of

furthering its cost reduction strategies.

The point is that the execution of strategy is a daily struggle. For the

strategy to work it must be made tangible to the stakeholders and be

aligned to the Vision of the company. Strategy execution and delivery is

not an overnight process since the ultimate vision may be limited by the

existing technology and the state of the organization. A company has to

keep working towards its strategy on a daily basis. It is the same with the

Business Process Improvement. It may take years for the total Vision for

the improved process to be implemented but the Team needs to stick to

the Vision and keep incorporating ideas that will make it tangible.

It is obvious that IKEA is not done yet. I have a good feeling that when I

visit that store next year I will be able to identify several new ways in

which the customer is engaged as an active part of the cost reduction

strategy.

ABOUT THE AUTHOR

Maxine Attong (CBS) BSc CMA is an approved Certified Business Specialist

(CBS) with the Academy of Business Strategy and her specialist subject is

business process improvement (finance). She has achieved a BSc in

Accounting at the University of West Indies Cahill, is a Certified

Management Accountant at the Society of Management Accountants in

Ontario and is a Certified Quality Manager at the American Society of

Quality. She has been employed as a Certified Management Accountant

and Financial Consultant for 14 years and has experience within the oil

and gas, financial services, insurance and credit unions industries. Her

clients or employers have included Guardian Life Co. Ltd, First National

Credit Union, National Union of Government and Federated Workers,

Readymix Ltd, Trinidad Insurance Brokers, NAMDEVCO, Process Plant

Services Limited, HOPE, NIPDEC, Guyana Sugar Corporation, Carilec

Grenada, Ministry of Education, St Lucia, Ministry of Finance Trinidad and

the Arthur Lok Jack School of Business. She has geographical working

experience in Trinidad, St Maarten and Guyana. She speaks English. Her

service skills incorporate facilitation and meeting management, business

process improvement and accounting and general management.

To contact Maxine Attong, please contact the Academy of Business

Strategy by forwarding an email, or alternatively visit Maxine’s CBS blog.

Categories: Maxine Attong (CBS) Tags: IKEA executes strategy

http://ivythesis.typepad.com/term_paper_topics/2009/02/ikeas-transformation-process.html

http://realresults.files.wordpress.com/2008/04/competitive-strategies.pdf

http://www.slideshare.net/sanil/ikea-global-success-strategy

http://www.echeat.com/essay.php?t=27564

http://www.cdeclips.com/en/business/Ikea_aims_for_15_stores_in_China_by_2015/

fullstory_67815.html

E-Business Modeling : A Case Study with IKEA

ABSTRACT:

E-business modeling is a concept that has several components and can be designed based on different combinations of them.

Furthermore, it is a concept that is vulnerable to changes as it is associated with technology, which is developing rapidly day by

day. By con-ducting this research on 1) how the companies are managing changes in a competitive envi-ronment by means of

adjusting their e-business models, and 2) if there are any compo-nent(s) of e-business model(s) that has more importance than

the others for the competi-tiveness of the company, the thesis intends to define the change management procedures that the

organizations involved in e-business are using, and to compare the components of the e-business models in order to find out if

there is any component that is more important than the others for the competitiveness of the organization.

We conducted the research through a combination of qualitative and quantitative methods. A semi-structured interview method

was chosen for the collection of qualitative data with the aim of acquiring in-depth information from our respondents. On the

other hand, quan-titative data, which we gathered via questionnaire, provided us with the opportunity to make statistical

inferences about the data.

According to our report, there are four components of e-business models; product innova-tion, customer relationship,

infrastructure management, and financials. Each component has three elements. By asking the respondents to state the

degree of importance of each element in each component, this thesis aims to compare the degree of importance of each

component via statistical measures. Furthermore, by combining the statistical inferences with the qualitative data and theories

related to the components of the e-business model, financials component is found to be more important than the other

components for the competitiveness of the organization.

Additionally, this report uses several change management models and procedures from books and articles from the library and

the Internet. In comparing those theories with the answers gathered from the respondents, we found out that being proactive

towards the changes, applying changes without modifying the basic strategy of the organization, stress-ing on the training and

involvement of the users, communication with users and stake-holders, and early commitment of the stakeholders were found

to be important issues for the change management in an e-business environment. Besides, the utilization of external parties in

the areas where organizations lack expertise concerning change was found to be important for a successful change in an e-

business environment.

When we reviewed the research questions, we observed that the purpose has been fulfilled and the research questions have

been properly answered. By considering the conclusion that has been derived, organizations could successfully design their e-

business models and experience competitive advantage, and successfully manage changes that could take place in their e-

business environment.

http://hj.diva-portal.org/smash/record.jsf?pid=diva2:4169

Developer's Notes for: IKEA BUSINESS

Developer's Notes

IKEA Business Brochure – GRATIS per iPhone e iPad.

IKEA Business Brochure: 135 pagine interattive con idee e soluzioni per uffici, negozi , bed & breakfast, ristoranti e bar.

Gli hot spot azzurri attivano pop-up, animazioni, video normali, in 3D e testi a comparsa con approfondimenti.

L’applicazione per iPhone e iPad mette a disposizione degli utenti diverse funzionalità:

-Zoom, per visionare i dettagli della brochure in alta definizione; 

- Bookmark e post it, che permettono di salvare le pagine preferite e aggiungere le proprie note 

-Doppia modalità di visualizzazione, a “rivista” o “landscape”: posizionando orizzontalmente il proprio dispositivo si ha

una visuale delle pagine in sequenza, oppure a “portrait”, orientando il proprio dispositivo in posizione verticale per

visionare le pagine singolarmente; 

-Inviare tramite e-mail contenuti specifici della brochure 

- Web, accesso diretto alle novità riguardanti i prodotti IKEA