Assignment 1 - Exercices on interest
Cours : Assignment 1 - Exercices on interest. Recherche parmi 300 000+ dissertationsPar Ivan Du Halgouet • 24 Juin 2019 • Cours • 1 794 Mots (8 Pages) • 996 Vues
Tutorial 6: Distribution and Retailing -IKEA- Answers Guideline
This is a guideline for answers, not the “perfect” or expected answer sheet.
- Is IKEA a distributor and/or a retailer?
Distribution or Retailing ?
•Distribution : value delivery network composed of manufacturers, suppliers, distributors aiming to make a product available for use or consumption by the consumer
•Retailing : all the activities involves in selling goods or services directly to final consumers for their personal, non-business use. [a]
Sometimes, retailing includes distribution and is defined as:
the set of business activities that adds value to the products and services
IKEA is firstly a retailer as the company sells to final consumers
but IKEA can also be considered as a distributor as the company manages the distribution process from production to consumption, like a distributor could do between a manufacturer and a retailer.
More over, IKEA also sells to professionals: Offices, Retail, Hospitality.
“The company designs its own furniture, which is made by about 1,220 suppliers in more than 55 countries. IKEA has 31 trading service offices in 26 countries so production can be monitored, new ideas tested, prices negotiated and quality checked while an eye is kept on social and working conditions. Furniture is also sourced through Swedwood, an IKEA-owned manufacturer of wood-based furniture and components.”… “The stores are supplied from 31 central distribution centres in 16 different countries or directly from suppliers.”
“At IKEA, distribution is all about making the route from the manufacturer to the customer as short as possible. Large volumes + flat packs = low costs”…. “
“The secret is to calculate as exactly as possible how many products will be needed to satisfy demand. This eliminates any unnecessary costs for production and warehousing. The hallmarks of IKEA distribution are: – a global distribution network – large volumes – flat packages – low costs. The aim, of course, is to make sure that the right products are always available at the store when the customers wish to buy them.”[b]
- Is IKEA in a corporate, contractual or administered VMS? What are the advantages and drawbacks of their chosen strategy.
First, students can remind the difference between the three systems
[pic 1]
Depending on the value delivery network position, IKEA is an illustration of an administered VMS, contractual or corporate VMS:
- Example of an analysis of advantages/drawbacks for the administered VMS:
IKEA acts as a channel captain, coordinating the different steps of production and supply chain with its partners
Advantages | Drawbacks |
More coordinationThanks to its size, IKEA acts as a channel captain and coordinates the different steps from conception to consumption. IKEA has the leadership on the channel and may limit the risk of channel members conflicts Cost control and optimizationThis configuration offers IKEA significantly ability to control and optimize costs throughout the distribution process. Competitive AdvantagesBuilding strong partnerships in a long term view, IKEA may develop competitive advantages: specific resources, unique productivity, … DifferentiationAS the different channel members are closely linked, this configuration gives IKEA access to more production inputs, distribution resources and process and retail channels. Each of these offers opportunities for the company to distinguish itself from competitors through effective marketing. A good compromise between vertical integration and conventional distribution channelIKEA owns strategical parts of the supply chain and outsources other parts to find a good balance between control, financial investments, and flexibility, agility | Less ControlIn comparison with a corporate VMS, IKEA has less control on the distribution process as the company does not own all the production and distribution actors Less Coverage with higher costIn comparison with a contractual VMS, it takes time, money and managerial resources to develop IKEA’ s own stores |
- Detail how IKEA is creating value for its consumers. Be precise, structured and illustrate your answer[c].
Utilitarian value: Economic/ Monetary value Informational value | In general, IKEA is the best place to find all the furniture and home supplies you need, at interesting prices. When you go to IKEA, you can find what you were looking for Attractive prices thanks to their distribution process “While prices are cheaper at deep discounters like Aldi, shoppers feel they are getting a good value at Ikea. Still, Ikea is much cheaper than competitors like West Elm and Bed, Bath & Beyond.” Home decoration ideas“12 ways to bring your outdoor space to life01-02-2016 As the weather grows warmer, why not explore opportunities for making more of your balcony, garden or verandah? From lighting, plants and textiles through to comfy seating, we pick some of our favorite ideas from homes we’ve visited.”… Signs inside the store, instructions, etc. are helpful and clear to take good decisions |
Hedonic value: Recreative value Reinsurance value Aesthetic value Epistemic value | In general, IKEA is providing a memorable and pleasant experience Restaurant and snack bar in store “don’t forget about the snack bar, which serves hot dogs, ice cream cones and cinnamon buns” Entertaining ideas on their website With IKEA Application, consumers can see how furniture fits and looks in their home before purchasing Home decoration ideas “9,500 single-brand home furnishing products in a single store” While purchasing furniture, you may learn how to become a yourselfer You may learn on their website “how to start a recycling station and become more sustainable”… |
Social value: Esteem value Linking value Social learning value | To assembly furniture and to be able to decorate your home “Ikea is also known for paying workers a living wage and being transparent about the production process.” Restaurant and snack bar in store “Ikea family” where customers can share pictures, ideas about home decoration “The digital and app versions of the catalog tie into this content by displaying videos of people acting out those morning and bedtime routines, all while enjoying the comforts of Ikea furnishings, of course. The content is shareable, and IKEA is promoting the posting of the catalog’s offerings via various social media, including Pinterest, Facebook and Twitter with the hashtag #IkeaCatalog. Recipients of the catalog appeared for the most part to be enthusiastic in their posts on Twitter and Facebook, including many who have been sharing photos and videos.” “Ikea family” Ideas on Ikea’s website
|
- Identify all the touch points developed by IKEA. Do you think that IKEA is running a multi-channel or an omni-channel strategy? Explain.
The different touch points developed by IKEA:
- Stores ( physical commerce)
- Website ( e-commerce)
- Social media ( social network commerce)
- Mobile ( m-commerce)
- Catalogs ( printed, on line)[d]
IKEA’s objective is to develop an omni-channel strategy as mentioned in the article:
...