Ikea Case Study

Essay by andreasz94College, UndergraduateA+, October 2014

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September 17, 2013 INT BUS 330 Andrea Salazar

1. What are the core competencies and end products of IKEA? How are they linked with each other?

The most important core competencies for IKEA is that they design their own products to fit the customer criteria, they focus on low-price furniture, they also have an open-warehouse where their customers are able to choose their furniture and compare them to the competition. One of the end products of IKEA is that they provide 'flat packaging' furniture, so customers could easily transport the products in their own vehicles and assemble them later, and it is also easier for them. I believe end products and core competencies are linked because IKEA provides unique ways to treat their customer, and it is difficult for competitors to imitate.

2. How did IKEA diversify?

IKEA diversified in many ways, they started to expand their variety of products, they started with products such as watches, jewelry and picture frames, then they started to focus only in furniture.

They also started to focus more in serving all the needs for the children, they launched the IKEA for children, and they focused on the necessities of children. They continued expanding their product lines and started to upgraded their utility to kitchen appliances. They also expanded globally and they adapted to local circumstances.

3. How did IKEA expand internationally? How has the firm maintained a focus on core competencies while simultaneously adapting to local needs in host countries?

IKEA started expanding first in the European market then to the US, Canada, China, Russia, Portugal, etc. IKEA continues to adapt to local requirements but they are also to trying to continue their low-cost strategy. They do studies on what the people on specific countries need and try to adapt their...