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Core competencies have recently become an area of emphasis by manufactures especially the ones that supply equipments in different destinations globally. IKEA is one organization that has managed to perform very well in the international business arena drawing much attention from business researchers.
IKEA has managed to offer customized services to communities with regard to their unique demands, culture and preferences. Most companies that supply goods international ignore the important aspect of considering the preferences of local communities. Perhaps the overemphasis of generalized international market drives most international organization to concentrate on building trademarks, rather than consumer satisfaction. IKEA ensures that products are customized to the preferences of a particular community. The customization gives the customer a sense of belonging and sends the message that the supplier cares. Therefore, the bond between the supplier and the consumer is further strengthened. IKEA structures strategies that are consumer oriented and this realization serves as the core competency of the company. Within the supply chain, the company ensures that the consumer plays an important role of assembling products.
The sense of satisfaction and belonging has ensured that the company commands a huge consumer base and companies entering the field find it difficult to penetrate the established bond. With regard to being consumer oriented the company also ensures that it is sensitive to the economic capability of different classes of consumers. The products offered in low income neighborhoods are relatively cheap compared to the ones offered in high income neighborhoods with slight variations in quality. Most IKEA stores also appeals to consumers due to their ability to create a home environment. The stores give the consumers the feeling of being at home. In addition, the stores give the consumer the general idea of how the products will look in their respective houses. Such considerations have ensured that the company continuously commands a huge and diverse consumer base. In terms of concentrating on consumer satisfaction IKEA has established a real core competency.
In testing the competency of the IKEA's concentration of consumer satisfaction one has to look at the industry in which the company operates, the niche occupied by the company and the general business success of the company. IKEA is a global business that has managed to establish successful stores in Europe, Asia, Australia and United States. In terms of consumer base the company currently commands one of the largest having "more 410 million shoppers annually" (Dunne, 2008). The company currently has 266 stores globally. The number of shoppers visiting IKEA stores annually is evidence of consumer preference of the store. In addition, the ability of the company to command success in almost all continents demonstrates the ability of the company to appeal to diverse consumers.
The self service offered by IKEA where there are no sales persons also gives the consumers sense of belonging. In addition, the consumers are given the chance of assembling the products ensuring that they get involved in the process of value addition. In countries where IKEA operate, the stores command between 5 to 10 percent of the total retail market. In addition, the brand is well known that it is thought to be bigger than the company itself. A combination of the quality of the products offered, sensitivity to consumer preferences, low cost of products and the involvement of consumers in the supply process has given IKEA competitive advantage over other player in the furniture retail market. Therefore, with regard to the achievements it is real that the concentration of the company to the welfare of consumers is a core competency for IKEA. The only recommendation is that the company should also target other areas such as employee satisfaction to further improve competitive advantage and also venture into other untapped markets such as Africa.
In strategic alliance with the aim to steer growth, it is important that a company avoids employing conventional methods that have been used by other companies. Conventional methods will only steer a company to growth that will never promise competitive advantage and in some instance may crumble the business perspective of a company. Growth should be steered towards using different combination of strategies instead of just employing singular conventional strategy. The strategic alliance offers a good source of radially oriented growth since both players will come with different ideas. Combining the ideas provides the alliance with higher chances of success. Rigid approach to ideas is discouraged due to the realization that "bold but uncertain outcomes are not predictable" (McGrath, 2009). As the alliance employs the strategies it is important to periodically evaluate the performance and make necessary adjustments.
Such consideration will give the alliance the ability to detect discontinuities and inefficiencies in a timely manner and construct mitigating strategies. The eventual realization is that even when employing unconventional approaches the risks will be significantly minimal. The perception of human resource towards the alliance should be an important consideration because people are the major drivers of alliances. According to (Welch, 2007) success is mostly driven by people. The managerial is usually under the obligation to explain to the employees the importance of the alliance and the general advantages that both parties will enjoy as a result of the alliance. The level of the understanding of the employees dictates the harmony that both parties will enjoy. In addition, the capacity of the alliance to deal with internal conflicts is also dependent on the employees.