IB Final.pptx

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    To create a better everyday life for

    the many.

    Girish Kamble-63 Nilesh Khadkikar-72 Nilesh Nahate-100

    Ganesh Navale-104 Priyanka Pengonda-112

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    I-Ingvar(Name)

    K-Kampard(Surname)

    E-Elmtaryd(Farm where he grew up)

    A-Agunnaryd(hometown in Smland, South

    Sweden)

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    Founded in 1943, Ingvar Kamprad(17), Sweden

    Inexpensive Styling

    Products

    No Pre-Assembled just Self-Assembled

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    30Billion Euro

    1st Flagship Store 1958

    332Stores

    470Million Visits Online

    776Million Visits Offline

    1018Suppliers

    38Countries

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    The world's five largest IKEA stores are:

    Stockholm Kungens Kurva, Sweden: 5,94,000 sq. ft.

    Shanghai, China: 5,32,000 sq. ft.

    Shenyang, China: 5,10,000 sq. ft.

    Tianjin, China: 4,92,300 sq. ft.

    Berlin Lichtenberg, Germany: 4,80,000 sq. ft.

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    IKEA originally started by selling picture frames, wallets,

    pens, watches, table runners, jewellery, and nylon stockings

    etc.

    Furniture was first added in the year 1948 and IKEA started

    manufacturing its own furniture since 1955

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    Part of Expansion

    Strategy

    Emerging in about

    1-2 years

    25 Stores

    Total Investment-

    1.5 billion EUR

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    No Do-it-Yourself Culture

    Low Home & Garden Expenditure

    Scandinavian design too plain

    No Brand Awareness

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    Low

    Current market is saturated

    Financial investments & expertise are required

    High

    Competition is intense

    Customers have alternative options offered by global

    furniture retailers, as well as, local furniture producers

    Low

    Not too many products and services as substitutes

    Low

    Suppliers Competing to maintain relationship

    Large no. of Suppliers

    Potential Entrants

    Buyers

    Substitutes

    Suppliers

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    Unstable Government

    Ruling & Opposition party lock horns over FDI

    Centre and State/UT not on same page

    Ease of doing business India ranks 132

    nd

    Internal Security

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    Exchange Rates

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    GDP Growth

    4.4 in Q2

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    Interest Rates

    Last recorded as 7.5%

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    Inflation Rate

    - Aug 2013: 6.10%

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    Unemployment Rate

    - 2011: 3.8%

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    Overall and industry-specific economicgrowth in markets

    Globalisation

    Market trends

    Labour costs in each individual markets

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    Poor infrastructure

    4, 320, 000 kms of road network, 4 kms of road for every

    1000 people

    National highways: 40% of traffic, 1.7% of network, 24% 4-

    lanes

    29.8% living below national poverty line

    5th largest consumer economy by 2025 (McKinsey report)

    Middle class households: 31.4 million, 53.3 million by 2016, 113.8million by 2026 (NCAER report)

    Love foreign-label brands: e.g. Munich Polo, Da Milano, Franco

    Leone

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    Small homes (National Sample Survey Organization)

    32% of urban homes 258 sq. ft. or less

    39% of rural homes 312 sq. ft. or less

    Office space rental

    2004: Mumbai 15th most expensive city in theworld, Delhi 32nd

    2013: Slow real estate market, companiesmoving to bigger headquarters

    Piracy and knockoffsNot just movies and music, but Ikea furniture as

    well

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    Sizes of homes make it difficult for people to visualize and buy more

    than one piece of furniture

    Buying any type of furniture without knowing if it fits is a

    cumbersome commitment

    Aesthetics & Ergonomics innovation:Ikea Flat Displays

    Tie-up with builders, furnish sample flats

    Offer discounts if customers buy a flat on that property

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    R&D investments: good current growth, but low overall

    Only 14 Indian companies in top 1500 in terms of annual R&D

    However, Indian companies reported largest increase in R&D

    investment (35.1%)

    2013 investment: India$45 billion, China - $220 billion Energy issues

    Power supply meets only 90% demand

    Rolling power cuts across the nation bring cities to a standstill and

    affect businesses

    25% of population with no electricity

    Electricity costs forever rising

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    Increasing connectivity

    350 million internet users by 2015

    More than half will access the net via cell phones

    Online shoppingConsumers use the internet to research, then buy

    offline

    To counter, several businesses offer home delivery and

    cash on delivery options Social media

    Number of users to hit 66 million by June 2013

    74% of urban internet users use social media

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    Bad infrastructure makes traveling a nightmare

    Coupled with the fact that the number of internet users is on the rise,

    it is safe to say that online shopping is only going to increase

    Emotion and Product Identity innovation: I kea L ive Design

    Same process as before

    Offer online 3-D modeling as an alternative to live mock-up

    Once design is finalized, offer free delivery and installation

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    Inbound Logistic

    - Well structured

    -25% Job share in each store

    Operation

    -Franchised and company owned stores-Out-sourced manufacturing

    Outbound logistic

    -Customer pay for transportation

    Marketing and sale

    -Use stores as advertising unit

    -Relatively less reliance on commercialadvertisement

    Service

    -Limited customer services

    -Information is given via catalogue