Week 5 Assignment:
Deliver the Value: the IKEA Case Study
IKEA is a Swedish-owned global business founded in 1943. The business generates
annual revenues of 27 billion euros and employs 139,000 people in 298 stores and
26 countries. The values and design philosophy of the founder continue to underpin
the brand. These values might be summed up as frugal, democratic, environmentally
aware, and design oriented.
IKEA has become synonymous with Swedish lifestyle. The stores are virtually
identical across the globe and sell a range of globally sourced flat-packed furniture
products as well as a range of related furnishings for the home—the stores offer
customers a Swedish experience by incorporating restaurants and a variety of
customer services intended to simplify the shopping process (e.g., childcare). What
is interesting about IKEA is that customers have become a significant part of the
value creating process—customers play a key role in terms of logistics and in
production.
By performing the assembly of the flat-packed furniture, customers complete the
final stages in the production process. In terms of logistics, the customer “moves”
goods from warehouse-style storage through the checkout, and then transports the
goods home. The trade-off for the consumer is lower prices and immediate
gratification—furniture is typically sold using just in time (JIT) inventory
management, which means that once a customer has placed an order, the furniture
then goes into production and is delivered to the customer’s home some 3–4 months
later.
IKEA’s senior management has in the past pursued an aggressive expansion policy,
but management is currently changing direction, adopting a slower rate of
expansion and investing in existing stores. The company plans to increase sales by
10% a year to 2020, thereby doubling annual sales revenues. Management is
concerned about how expansion in the BRIC countries, specifically ‘India’, is
pursued. There are fears about preserving the company’s culture in these huge
markets (Milne, 2013).
Sources:
http://www.ikea.com/ms/en_US/this-is-ikea/company-information/index.html
Milne, R. (2013, September 1). Ikea signals slower expansion. Financial Times.
What do you think? What would you do? What problems do you foresee and how
will this impact IKEA’s Swedish concept? Please recommend a marketing solution
that will help IKEA achieve growth in India based on your understanding of the
place P and how delivering the value is evolving.
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Use the case study guidelines below to perform a brief analysis, identify the
problem, suggest alternative solutions, and make recommendations for the
implementation of the solution that you believe is the best fit.
Case Study Report:
You have 2 deliverables:
1. Write a brief 5-section paper (about 2-3 pages, double spaced, in addition to your title
page, your table of contents page, and your reference page). Some online research is
expected. The IKEA website is highly informative. Use APA format. Focus on
addressing the 5 case study section guidelines (below) …
2. Create 5 slides that are "support graphics" (as if you will be reading/presenting the
report to Ikea’s senior management team at a meeting). In the report, simply indicate
when each slide should be displayed on the screen as you present … include print-outs of
the slides at the end of your paper (they are not to be considered as part of your report’s
2-3 pages).
Case Study Section Guidelines:
1. Analysis of the Current Situation—In one brief paragraph, establish the context
for the case analysis; then provide the three following sub-sections (with subheadings)
SWOT analysis sub-section with a SWOT box.
Research sub-section: Identify the key environmental factors such as industry
trends, level of competitiveness, customer perceptions, legal considerations, and
evolving technology at the outset of the analysis.
Summarization sub-section: State the key aspects of the internal environment of
the firm in terms of strengths and weaknesses and the external environment in
terms of opportunities and threats to the firm in your SWOT box.
2. The Target Market—Identify your target market: Who is your target customer in
India? In terms of demographics and lifestyle, what aspects of consumer behavior
provide insights into this group of customers? Present a specifically-focused 2column Market Segment Analysis chart … PLUS any additional information you feel
is pertinent.
3. The Problem—Identify key problem(s). It is easy to identify symptoms of problems
while failing to identify the real problems. For example, declining sales may be
identified as a problem, when … in fact …the decline is only symptomatic of more
complex problems that are harder to observe. Make a clear distinction between what
is identified as the problem and the symptoms of the problems.
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4. Alternative Solutions—Identify and evaluate alternatives that were also
considered (but in the end; not recommended). View these as reasonable
alternatives and evaluate them in terms of their feasibility, projected costs
advantages, disadvantages, and potential short-term and long-term consequences.
5. Recommended Course of Action—Present your selected ‘Marketing course of
action’ and introduce the appropriate strategies and tactics to accomplish the
chosen course. Justify your choice in terms of your analysis. As most practitioners
know, charting a course of action can be a difficult job, but implementation is the
true challenge. Produce a workable action plan overview which would have a
reasonable probability of success in the implementation phase.
Format Guidelines:
Every assignment is to be formatted per APA guidelines and must include:
Correct content – In each draft of your plan, Submit only the content asked for in the
specific assignment.
Title Page – Include plan title, course name & number, student name, & submission
date)
Page header & running head, and page numbers on every page;
Table of contents (with page numbers);
Double-spaced text using Times New Roman 12-point type;
Section Headings using Times New Roman 16-point, Upper & Lower Case,
flush left;
Sub-Headings (within sections) using Times New Roman 12-point, Upper & Lower
Case, Bold Face, flush left;
Graphics & charts – must be easily readable and imbedded into the document at the
appropriate locations. They cannot be attached as separate documents.
Reference Page (presented in APA style). This page must be formatted exactly as
described in doc #14 in doc sharing and have a clear referential connection to
specific document content. See APA guidelines in doc sharing.
Slide Guidelines:
Your supporting slides must be presented within your case study ‘word’ document at
the appropriate spots within your document (do not submit a separate PowerPoint
document).
A professional Marketing slide presentation should be based on high quality content;
and your slides should be clear and compelling – it is important to engage your
audience and convey all of the important points that you have developed in your
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written report. Include inviting and appropriate graphics & artwork on each slide
that relates to your verbiage – this is what your audience will want to see.
GRADING GUIDE:
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CASE STUDY
ASSIGNMENT:
(week #5)
SECTIONS:
1. Analysis of
the Current
Situation.
Content & Format Guidelines
· Research & Identify the key environmental
factors such as industry trends, level of
competitiveness, customer perceptions, legal
considerations, and evolving technology at the
outset of the analysis.
Possible
Points
15
· Summarize the key aspects of the internal
environment of the firm in terms of strengths
and weaknesses and the external environment
in terms of opportunities and threats to the firm
in your SWOT box.
Who is your target customer?
2. The Target
Market.
. Their demographics –
15
.Their lifestyle –
.Their Psychological characteristics –
3.The Problem.
4. Alternative
Solutions.
5. Recommended
Course of Action.
Identify the “True” problem(s). For example, is
declining sales a problem, or is it only
symptomatic of more complex problems that
are harder to observe. Make a clear distinction
between what is identified as the problem and
the symptoms of the problems.
20
Identify and evaluate alternatives. Develop
reasonable alternatives and evaluate them in
terms of feasibility, projected costs advantages,
disadvantages, and potential short-term and
long-term consequences.
10
Clearly state your recommended course of
action and provide the appropriate strategies
and tactics to accomplish the chosen course.
Justify your choice in terms of your analysis. As
most practitioners know, charting a course of
action can be a difficult job, but implementation
is the true challenge. Produce a workable action
plan that would have a reasonable probability of
success in the implementation phase.
20
SUPPORTING
SLIDES
10
Attractiveness and appeal of layout, graphics, &
1. Design & Layout verbiage.
Effectiveness.
2. Content Quality
& Focus.
Quality, brevity, & focus of wording.
Format Point
Deductions:
A quality paper’s format must meet assignment
requirements (2-to-4 points deducted for each
oversight).
10
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