Ikea, disruptive innovation

ECOLE DE MANAGEMENT STRASBOURG

Agenda:

1. INTRODUCTION
2. COMPANY DESCRIPTION
3. BREIF ANALYSIS OF THE CURRENT SITUATION OF THE SECTOR
4. STRATEGY ANALYSIS OF THE COMPANY
5. ANALYSIS THE ORGANIZATION OF THE COMPANY
6. BIBLIOGRAPHY

STRATEGIC INNOVATION
DIPL. KFM. TECHN. ANASTASIOS STILIANIDIS
DATE: 24/02/2012
GROUP: IKEA

* 1. INTRODUCTION.
Theobjective of this study is to analyze the IKEA business reality, to understand its size and evolution, obtaining the conclusions that explain their development and innovation strategies carried out by it.
To perform this analysis, we study the most relevant variables, starting from the Strategy, as an interface between the environment/market where the Company operates and the company itself, which willlead us to the most appropriate organization to achieve the objectives designed and how to get them.
To verify the correct operation of the system and taking measurements of alignment, is necessary to establish indicators, both external (the environment) and internal (the operation of the Company).
These indicators should be collected through information systems that will rely on InformationTechnology. This will lead to a continuous cyclical process again impacting on the strategy that will enable us to maintain a constant change in the company and its existence and long-term success.

* 2. COMPANY DESCRIPTION.
IKEA is a Swedish multinational corporation dedicated to the retail sale of furniture and household items and decor, low price and contemporary design, although thegroup has diversified further as the restoration area including IKEA Food Services restaurant Swedish bistro and promotions in shopping centers, and other activities that can be obtained through the corporate structure.

* 3. BRIEF ANALYSIS OF THE CURRENT SITUATION OF THE SECTOR.
The increase in sales worldwide IKEA has been dramatic, growing up nearly 100% from 2004 to 2011, althoughthere is a slowdown in the last 4 years, especially in 2009, taking off a bit more in 2010.
This increase may be contradictory vs. the current global economic crisis, but has some explanatory factors such as consumption is growing faster in emerging economies, where the IKEA Group is also installed, along with the gradual increase in outlets and diversification of activities.
* 4. STRATEGYANALYSIS OF THE COMPANY.
Ikea has followed an evolution based on social aspects, better said, achieved a better relationship with their clients and get them satisfied, but in the meantime, IKEA has expand its business around the world.
The keys to disruptive innovation are to create simple objects, easy, cheap and accessible. IKEA has created an internal culture based on innovation, which meanslow-cost tools available to all types of clients to achieve a differentiated strategy from the competition. This allows them to climb the average margin. Thus, we can say IKEA has followed a disruptive innovation strategy of low-end.
For these reason, IKEA creates products that occupy a small space, sometimes make life more comfortable customer. Example: There are some tools like horns that aresimply bolted to the wall, which serve to hang carpet. Thus saving space in a room, get a low cost and high satisfaction by using objects that many people do not even know of its existence.
This new way of thinking and implement the strategy, what is known as "Blue Ocean". This means that IKEA has created a new market space by making the competition irrelevant, because it has created powerful leapsin value that are a barrier to it. Created and captured a new demand, aligning all activities of the organization in order to seek lower costs while increasing the value of products. What has been achieved through value innovation, ie innovation applying to utility prices and costs.
The value curve analyses the current state of the market known, allowing to know where the competition invests,...