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KSM Consultants. Rishabh Ranjan Zawar Qazi Rakesh Sharma Bhavna Kumar. Overview. Industry Overview Competitive Landscape Ikea New Strategic Thinking Over the Horizon Conclusion. Industry Overview. Competitive Rivalry Fragmented Industry 14.2% controlled by top 10
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KSM Consultants Rishabh Ranjan Zawar Qazi Rakesh Sharma Bhavna Kumar
Overview • Industry Overview • Competitive Landscape • Ikea • New Strategic Thinking • Over the Horizon • Conclusion
Industry Overview • Competitive Rivalry • Fragmented Industry • 14.2% controlled by top 10 • Leads to highly competitive markets • Threat of New Entrants • Economies of Scale • Supplier Power • Fragmented industry leads to low supplier power • 1800 suppliers in more than 50 countries • Profit potential is high
Competitive Landscape • Two major categories • Low end retailers • Heavy price competition leads to low margins • Price-Sensitive customers • Low Customer service • Office Depot, Costco, Wal-Mart • High end retailers • High customer service • Sales Consultant • Easy Payment options • High inventories • Ethan Allen, Jordan’s
Ikea • Goals • 50 stores in the US by 2013 • Increase market share • Sales turnover
Ikea (cont.) • Strengths • Brand Recognition • Low prices • Low Cost • Convenience • Furniture available for decent living • Childcare, restaurant/café, paper, pencil • Weaknesses • Product Quality • No assembly help, delivery, interior design
New Strategic Thinking Future Product-Service Mix International Expansion Shift Strategies Present Pure Product Strategy
Over the Horizon Customers Transform customers experience • Better quality products for high end consumers • Include interior decorating services Products and Services Compare IKEA products and services with competitors • Low End – Walmart – prices are acceptable so no change required • High End – Ethan Allen – customer service comparable, but need to cater to high end customers
Over the Horizon (cont.) Key Metrics Reduce Average Inventory and Increase Sales • Increase Gross Profit Margin • Increase Inventory Turnover • JIT Industry Dynamics Anticipate and exploit industry changes • New technology – be first mover • Spread to newly developing countries like China and India • Rising urban middle class incomes • Existing supplier relationships can be developed Tectonic Opportunities Supply to Local vendors
Conclusion Opportunities • International Expansion • Target new customer segments • Add distribution channels