Ikea Essay

10290 WordsMar 16, 201342 Pages
Market driving supplier strategy: IKEA’s global sourcing network in two developing markets Veronika Tarnovskaya Lund University, Sweden Pervez N. Ghauri Manchester Business School, UK Ulf Elg Lund University, Sweden Abstract For more than a decade, market orientation approach has been most prevalent in marketing literature. According to this approach firms reactively respond to market conditions and customer trends. The market driving approach is characterised by an ability of the firm to proactively shape the market structure and offer completely new value propositions through its unique business process, thus changing the existing market conditions. The purpose of this paper is to explore how a global supplier network is developed to support the market driving strategy. IKEA is considered one of the leading market driving firms. We have studied its activities in establishing supplier networks in Russia and Poland. Findings confirm IKEA’s market driving strategy and how it has been able to restructure the market and successfully develop an efficient supplier network as a part of its market driving strategy. Keywords Supplier strategy; networks; IKEA For correspondence: Professor Pervez N. Ghauri Manchester Business School Booth Street West Manchester M15 6PB United Kingdom Tel: +44 (0)161 3063528 Email: p.ghauri@mbs.ac.uk 1 Market driving supplier strategy: IKEA’s global sourcing network in two developing markets Introduction The market driving approach is gaining an increasing attention in recent marketing and management literature (Harris and Cai, 2002; Jaworski, Kohli and Sahay, 2000; Kumar, Scheer and Kotler, 2000; Slater and Narver, 2004; Tuominen, Rajala and Möller, 2004). It is developed as a reaction and response to the more general research on market orientation that has dominated the marketing area for over a

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