KatarzynaGawor

SoaHalsov

FriedemannPolzin

InternationalBusinessStrategy:IKEA

IKEAOverwiev
Globalbusinessstrategy
GenericStrategy Organizationalstructure Operationalstrategy CSR

RegionalStrategyinCEE
Swedwood Newmarketssourcingandcustomers

LocalstrategyinSlovakia
04/12/08

InternationalBusinessStrategy:IKEA

IKEAhistoricbackground
IKEASvenskaAB(1943)IngvarKamprad EnteringtheScandinavianmarket(1963) ExpansionintoEuropeandfirststepsoverseas SwitzerlandandGermanyinthe1970s FalloftheIronCurtainfullentryintoCEE Swedwood EntrytotheBritishmarketaquisitionofHabitat FurtherexpansionChinaandRussia
04/12/08 InternationalBusinessStrategy:IKEA 3

Facts&Figures
TheIKEAGroup: 253storesin24countries 41tradingserviceofficesin30countries 27 distribution centres and 11 customer distributioncentresin16countries
183storesinEurope(thelargestmarket) 46inNorthAmerica 11inRussia 10inChinaandJapan 3inAustralia
04/12/08 InternationalBusinessStrategy:IKEA 4

Facts&Figures
Products: widerangeofproductsincludingapprox.9500 standarizedmodelsofflatpackfurnitureavialable inIKEAstoresallovertheworld Houses&flatsBoKlokinScandinavia &intheUK(since1996) FamilyMobileintheUK(since2008) Productnamesspecialnamingsystem developedbyIKEA
04/12/08 InternationalBusinessStrategy:IKEA 5

Facts&Figures
Employees:
Coworkersbyregion
AsiaandAustralia:7.650 NorthAmerica:16.800 Europe:103.350

Coworkersbyfunction
Purchasing,distribution,wholesale:14.500 SwedwoodGroup17.100 Retail96.200
04/12/08 InternationalBusinessStrategy:IKEA 6

Facts&figures
Sales

04/12/08

InternationalBusinessStrategy:IKEA

Facts&Figures
Sales:

04/12/08

InternationalBusinessStrategy:IKEA

Facts&Figures
Purchasing:

04/12/08

InternationalBusinessStrategy:IKEA

Corporatestructure
StichtingINGKAFoundation INGKAHoldingB.V. TheIKEAGroup: ServicesB.V. IKEAServicesAB InterIKEAHoldingS.A. InterIKEASystemsB.V. IKEAstores
04/12/08 InternationalBusinessStrategy:IKEA 10

Businessstrategy
Mission tocreateabettereverydaylife forthemanypeople Targetgroup younglowtomiddleincomefamily Organisationalstructure centralizedcontroloverfunctionalactivities+ lowcosts+enhencedquality frominternational suppliers
04/12/08 InternationalBusinessStrategy:IKEA 11

Operatingstrategy
IKEA'ssuccessbasedontheidea ofkeepingcostbetweenmanufacturers andcustomersdown Innovativecostsaving inbothupstreamanddownstream R&DcentralizedinSweden

04/12/08

InternationalBusinessStrategy:IKEA

12

Globalstrategy
Genericstrategies: costseeking diversification focusstrategy Modifiedvaluechain: cutcostsinbothupstreamanddownstream twoway value system between customers, suppliers,andIKEA'sheadquarters forwardintegrationSwedwood
04/12/08 InternationalBusinessStrategy:IKEA 13

Marketing&Communication
HowdoesIKEAachieveit? Standarizedproducts selfassemblyflatpackfurniture Catalogue&aloyaltyprogram Goodservice: stores restaurants&foodminimarkets childrenplayareas Corporateculture
04/12/08 InternationalBusinessStrategy:IKEA 14

IKEAsinternationalization
Expansionstrategy: Subsidiariesacommonway Franchising Strategicalliances

04/12/08

InternationalBusinessStrategy:IKEA

15

Social&environmental responsibilityatIKEA
IWAY: internalpolicy externalapproachForestrypolicy Cooperationwithothercompanies,tradeunions andorganizations: UNICEFWWFSavetheChildren
04/12/08 InternationalBusinessStrategy:IKEA 16

CentralandEasternEurope
Strategy
GenericStrategy Nexttargets

Markets
Distribution Sourcing
Swedwood

Critics
04/12/08 InternationalBusinessStrategy:IKEA 17

CEEWhereisIKEA?
Openretailstores: CzechRepublic1991(4stores) Brno 1998 11,800 Ostrava 2001 17,000 Prague(CernyMost) 2004 23,500 Prague(Zlicin) 1996 22,700 Hungary1990(2stores) Budapest 1990 26,100 Budapest(Budars) 1999 Slovakia1995(1store) Bratislava 1995 21,500 Poland1991(7stores) Gdansk 1993 11,500 Katowice 2000 23,400 Krakow 1998 11,800 Poznan 1991 14,600 Warsaw(Janki) 1993 23,700 Warsaw(Targowek) 2001 23,100 Wroclaw 1996 12,600 Plansfor2009: Poland(1store) Lodz August200933,100

19,800

04/12/08

InternationalBusinessStrategy:IKEA

18

CEE(Generic)Strategy
Costseekingpriceleadership Suppliers(Poland,SlovakiaSwedwood) Marketseeking PresentinthebiggestCities/Countries(firstin Poland1991) KnowledgeSeeking(ForestIndustry&Training serviceoffices)

04/12/08

InternationalBusinessStrategy:IKEA

19

CEEPredictions
Prospects Newoutsourcingwaveduetofinancialcrises IncreaseefficiencyandcutcostsinCEE Ikeabuiltsubsidiaryaftersubsidiary

04/12/08

InternationalBusinessStrategy:IKEA

20

CEEUkraine
NextTarget:Ukraine 10%increaseinGDP Warehousesarebuiltintheperipheryofthecities Problem:notallUkrainianshavecars Consumptionbehaviourisdifferent

04/12/08

InternationalBusinessStrategy:IKEA

21

CEERomania
21032007officiallyinauguratedaunitintheBaneasa ShoppingCentre. MoaroTradingoperatestheIKEAfranchiseinRomania decisiontoenterRomaniawastriggeredbyeconomic growthratesoverpastfewyearsandrecentEU accession AlreadyasignificantamountofIKEAproductsare madeinRomania 20%lowerpricescomparedtoforeignsuppliers/ competitors
04/12/08 InternationalBusinessStrategy:IKEA 22

CEEDistribution

KISSkeepitsmallandsimple DistributionWarehouseinWels(Austria)for CentralandEasternEurope

04/12/08

InternationalBusinessStrategy:IKEA

23

CEESourcing
WithoutPolandIkeawouldbelost Oneofthemostimportantproductionlocations 600Millionturnover Ownproductionandover90suppliers 12%ofthewholeIKEAproduction

04/12/08

InternationalBusinessStrategy:IKEA

24

Swedwood
BusinessAreaForest andSawmillsEast BusinessArea Componentsand FurnitureEast

Source:www.swedwood.com

04/12/08

InternationalBusinessStrategy:IKEA

25

SwedwoodHistory
originallyformedasaresultofthepoliticalandeconomic upheavalthatchangedthefaceofEasternEurope IKEAcouldnotbesureitwouldbeabletocontinuegettingits importantshareoffurniturefromtheaffectedregion Tosafeguarditselfagainstthelossofvitalsuppliers,IKEA formedSwedwoodasasubsidiaryonApril1,1991 Initialtask:participate,whennecessary,intheprivatisationof IKEAsuppliers TodaySwedwoodhasevolvedintoanIKEAsupplierwith advancedproductionfacilitiesofitsown,mainlyinEastern Europe
04/12/08 InternationalBusinessStrategy:IKEA 26

SwedwoodFigures
Steadygrowth 2000:Zbaszynekin Polandbuilt 2002:SawmillinRussia built
Source:www.swedwood.com

2005:newfactoryin Polandbuilt

04/12/08

InternationalBusinessStrategy:IKEA

27

CEECritics
IKEAhassocialandecologicalimage SurveybyDutchLabourUnions(2003) Investigateinworkingconditionsandworking relationsinIKEAsuppliers SurveytookplaceoutsideoftheCompanysphere Controloffacilities BreachofIKEABehaviourCodex: nofreesalarynegotiationsverylowsalaries Insufficientexternalcontrol
04/12/08 InternationalBusinessStrategy:IKEA 28

IKEAinSlovakia
twomainreasons: 1.qualifiedlaborforce 2.material(wood)ingoodqualityandquantity bigchallengeandadvantageforbiggerfurnitureproducers inSlovakia threatforsmallerproducers newviewonasystemoflivingasawholenotjusta separatedunitsofthefurniture IKEAforceanotherproducersonSlovakiatocuttheircosts andimproveeffectiveness
04/12/08 InternationalBusinessStrategy:IKEA 29

IKEAinSlovakiaFigures
Inthefinancialyear2008: Salesvolumeroseby16% Turnover2,1milliardsSKK Visitors2,3millions

04/12/08

InternationalBusinessStrategy:IKEA

30

IKEAinSlovakiaSuppliers
SuppliersinSlovakia: CoveredbyIkeaGroup:Swedwood(Trnava,ZvanPoruba, MalackyII)andIkeacomponents(Majcichov,MalackyI) Slovakcompanies:EkotechFiakovo,LenosLevice,Sanas Sabinov InternationalcompanieswithproductioninSlovakia:Lind Mobler(Krupina)

04/12/08

InternationalBusinessStrategy:IKEA

31

IKEAinSlovakiaCompetitors
KIKA Mbelix NbytokGalan Askonbytok partiallyalsoHornbachandBaumax

04/12/08

InternationalBusinessStrategy:IKEA

32

IKEAinSlovakiaAdvantages
Abilitytocutcostandhavelowerprices Goodposition Specialopeninghours AvionShoppingParkfrom2002 FastgrowthoftheSlovakmarket

04/12/08

InternationalBusinessStrategy:IKEA

33

TheFinalSlide

Thankyouforyourattention!

04/12/08

InternationalBusinessStrategy:IKEA

34

Resources
SeminarPaperInternationalBusinessStrategybyKatarzynaGawor, SonaHalasovaandFriedemannPolzin

04/12/08

InternationalBusinessStrategy:IKEA

35

Licence
Copyright2008,FriedemannPolzin,KatarzynaGaworandSonaHalasova thecontentsofthisdocumentationmaybeusedunderthetermsofeithertheGNUFree DocumentationLicense1.2orthePublicDocumentationLicense. GNUFreeDocumentationLicenseNotice Copyright2008,FriedemannPolzin,KatarzynaGaworandSonaHalasova Permissionisgrantedtocopy,distributeand/ormodifythisdocumentunderthetermsoftheGNU FreeDocumentationLicense,Version1.2oranylaterversionpublishedbytheFreeSoftware Foundation;withnoInvariantSections,noFrontCoverTexts,andnoBackCoverTexts. Acopyofthelicensecanbefoundathttp://www.gnu.org/licenses/fdl.txt. PublicDocumentationLicenseNotice ThecontentsofthisDocumentationaresubjecttothePublicDocumentationLicenseVersion1.0(the "License");youmayonlyusethisDocumentationifyoucomplywiththetermsofthisLicense.Acopy oftheLicensecanbefoundathttp://www.openoffice.org/licenses/PDL.html. TheOriginalDocumentationis"InternationalBusinessStrategyIKEA". TheInitialWritersoftheOriginalDocumentationareFriedemannPolzin,KatarzynaGaworandSona Halasova, Copyright2008.AllRightsReserved. InitialWritercontact(s):friedemann@fhj.de Contributorsare:

04/12/08

InternationalBusinessStrategy:IKEA

36