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KSM Consultants

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

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  1. KSM Consultants Rishabh Ranjan Zawar Qazi Rakesh Sharma Bhavna Kumar

  2. Overview • Industry Overview • Competitive Landscape • Ikea • New Strategic Thinking • Over the Horizon • Conclusion

  3. 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

  4. 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

  5. Ikea • Goals • 50 stores in the US by 2013 • Increase market share • Sales turnover

  6. 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

  7. New Strategic Thinking Future Product-Service Mix International Expansion Shift Strategies Present Pure Product Strategy

  8. 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

  9. 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

  10. Over the Horizon (cont.)

  11. Conclusion Opportunities • International Expansion • Target new customer segments • Add distribution channels

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