Introduction to International Business
Jochem Vriesema & David Spelbos
1. What are the core competencies and end products of IKA? How are they linked with each other. Core competence of IKEA?
The Core competencies of IKEA are Designing and Innovation. Their products are basic-looking, with a very low price. So pricing is also a core competence of IKEA and their adaptability. For example; their food is adapted to every location.
The end products are Separate materials is flat boxes which are easy to put together. Result: cheap and well-designed furniture, sold in big genius warehouses-showroom combinations, because of the flat boxes IKEA does not need a lot of storage space.
Because the customers of IKEA have to put their materials together themselves, IKEA does not need employees to do that for the customers, this provides a very low-cost concept. So there are not many employees needed.
Trough the core competencies it’s possible to manage and sell the end products in so many different parts of the world.
2. How did IKEA diversify?
Trough both product variety and geographical expansion. They do not just sell beds and couches, but their products are everything you can find inside and outside a home. Also kitchens, garden furniture etc. Their product variety is really recognised and an important aspect of IKEA.
IKEA’s geographical expansion also helped them diversify. IKEA is now settled in 37 countries, because they adapt their products and catering to every country, that adaptation assortment grows and also their variety.
They didn’t only diversify their products, they also made their stores attractive for children.
IKEA made playgrounds for children and also special meals where now available in their stores.
3. how did IKEA expand internationally? How has the firm maintained a focus on core