Case Study Of IKEA

Introduction

The IKEA case study report is judiciously build around using suitable available framework and different theoretical perspectives while underlying the home country and host country requisites of strategic approaches towards international strategic business operations in the above case.

IKEA Case Study

IKEA case reveals Ingvar Kamprad modest journey through the farm Elmtaryd and village Agunnaryd where he grew at the tender age of seventeen in 1934 and combining the first letters of his name , farm and village he gave birth to IKEA spread in a barely two meters square size shed. Even as a young entrepreneur Ingvar Kamprad made steady income by buying myriads items like pens, Christmas in bulk and sold them at cheaper price with

As stated by Gupta, R.K. 2013, an organization core competencies plays a pivotal role and gives a competitive edge to the organization in the form of transforming operating skills within the industry. Moreover the attainment of these skills is not overnight but is developed and natured over precious years of practice and specialization in a particular arena. Prahalad and Hamel (1990, pp 79-91) are also of the similar view and stated that the eminent success stems from an MNE and most firms must make a strategy move attaining core competencies. According to their viewpoint, core competencies can be listed under these forms “shared education, communication, balancing various streams of technology and organizing value-creation skills across departmental boundaries”. Owing to such core competencies ‘core products ‘ are shaped into ‘end products’ Application:

Taking a look at Ikea’s effort to build core competency

As mentioned in the case a gradual development saw IKEA formula shaping into global success. Bringing low –cost products to consumer was IKEA’s prime emphasis. Practicing systematic routines from first idea through product development, supply, distribution, retail all the way to customer’s

When IKEA made it entry in the US it became apparent the varying social norms and practices that prevailed in American differ to those of Sweden and IKEA took it in its strides this lack of adaptation. How this problem recognition came to light. Most of the US products were manufactured in Sweden as per the Swedish designs to be later exported to the United States. It so happen that these products met with severe rejection from the Americans. e.g the Americans found the bedroom Chester draws too shallow for storing their sweaters. The Americans prefer a lot of ice in their drinks but they found the IKEA glass tumblers not so big enough. This led to a revamping and redesigning of the product lines for the American markets keeping in mind the taste and style of Americans and this also propelled to modify their routines and look for local US manufactures. IKEA opened as many as cash registers when they realized the US customers were not liking queuing and waiting at the cash register counters. IKEA did a total layout modification of its store in China keeping the target segment in mind and gave more leverage to dining and living room in comparison to kitchen. IKEA did not find much success with it do it yourself furniture since it had to lavvy a fee to its assembly