IS and IT are made available, around assistance and support when administration for the conversion strategic plan in the strategic information management. The role of IS and IT for the development of organization, planning reporting, the prominent thing as well as Controlling and also on it that the use of IT and IS is to be made it more well-organized production processes. The conversion IS and of the IT by internal and external factors of an enterprise are affected (Curry et al., 2006).
IKEA is the one the biggest furniture seller all over the world. It has spread over 50 countries. It has over 1200 different products. The IKEA's strength is, all offered or potential resources or ability within the business, the one competition advantage offers on the market. Example: strong sales network Intense coworker commitment and loyalty add to profit scope and next is weakness existing or potential, which would know the market as an obstacle for preservation or reaching of a competition advantage in. Example: Are missing to a clear enterprise strategy to lack of training possibilities for the use of a new software. All the internal factors are under the control of the business such as manufacturing, marketing, finance etc. The main thing is the brand name which lends the customer to user the products. Through the production phase, IKEA always increasing the use of raw material with smart use and high volume of commitments with the use of latest technologies. The strategy of IKEA is low cost with best quality which made to attract the people.
External business environment
Analyze ways, in which IKEA handled to limit threats to its business. IKEA deals with these points in many ways. It handle weaknesses and threats, in order to cause a positive result.
Social tendency: IKEA establishes on-line assistance, in order to lead customers to a sustainable life. Here it can concentrate on main improvement in the slowing down housing market. It ropes customers with points and ideas on its web site to cut their effect to the climate. This stores it also money. Personal on sustainability to become for even supportable trained up, which IKEA does and can like it responsibility take.
Market forces: IKEA is enough large to enjoy cost economic. This lower normal prices on a long-term basis through, e.g. improve use of the technology or the occupation of the expert managers. Cost financial system gives a competition advantage to a business also, cost discount are then agreed on at customers in the type of lower value. This sets high above market entrance barrier for the smaller companies, which register the market.
Economic factor: IKEA low prices to create complaint at its customers in difficult financial times. It is important to hold prices low, if the retail trade is unhappy. IKEA price tactic target customers with restricted financial resources. Its products become also on such complaint with higher budgets by good quality and Design. The enterprise must guarantee that it always so with the lowest prices on the market in the future recognized. Communication acts vital role.
Internal and external IS environment
In the recent years the use of IS/IT has enhanced a lot. It has made a huge impact of the business. The investment on the IS/IT has been increased, the use of IT/IS led to develop the long term achievements.
The external factors, from the previous report we know that the IKEA is best furniture seller products among all over the world. With the scope of IS/IT it is capable supplying all the products to all over the world in time. It uses latest technology called as flat pack technology, which helped the IKEA to produce the low cost and high quality. With IS/IT they starting online business in some parts of countries. IKEA is capable of innovative ideas to create products with the use of latest technology. IKEA is joined in social welfare that is the IKEA is helping to educate the poor people from India and many more factors that are influenced by the IS/IT.
From the internal point of view, IKEA is following with new technology that is they have been introduced self scanning checkouts, it reduces the customer time and makes easy for IKEA's staff. The IS helps them to divide store into different sections such kitchen appliances, bathroom fittings, beddings, halls etc. Because all the IKEA stores are huge, IS/IT helped them to divide it and which attracted the customer. All the products availability are on the websites the customer can check the product and availability on the website. They keep all offers on the each products in particular period that information is also available in the website or in IKEA catalogue.
Assess future IS strategy potential:
Value chain
The thesis of the convergence of external factors and Industry will impel tendency of the evolution of the value chain. The future IS strategy of IKEA vision in fact that is the industry concentrates on these six areas critics of opportunities the growth and to improve the yield.
1. Shopper dialogue:
The industry has the chance to serve better buyers by the creation two-way dialogue with them and helps those more founded decisions to meet and the integration of the memory and the house with new rising and Consumer technology.
2. Information sharing:
The enterprises must be ready responsible person to divide standard based data freely. The exchange of information like supply chain between the trade partners will lead the current to improved information and as consequence, a better co-operation, over better on the consumer. A resulting common platform solutions could become the base for further supply chain, like the demand propelled order and mutual planning promotion
3. Synchronised production:
The industry must help the improvement of the dialogue with the household and the technological connection with the customer, meet the industry more founded decisions, divides plans and better synchronizes production with the actual demand. This relies also on the complete integration of the suppliers of raw materials, added and packing. Distributed manufacturing flow consolidation and a "final assembly" - model can play production a role with the trend too "lean".
4. Integrated logistics/home fulfilment:
Since the industry must face available little fuel and energy, regulations city more, increases than understood them of job and a fort increase the purchases from home, for the retailer from marks-centric to geographic logistics logistic retailer-centric. Strategies comprise the consolidated distribution, planning of the dynamic distance, and more sharing than effective transport and backhauling
5. Sustainability:
Stability is directed toward the achievement of the high quality of life for all. Economic development, social development and protection of environment are the mutually complementing components:. Three key purposes of the eradication of misery are conservation of natural resources and the creation of steady production and consumption.
6. Company cultural and behavioural changes:
The building of the new vision of the chain of the creation of cost begins from the exchange of information inside and between the enterprises. Other important cultural and behavioral changes it will include organizational development, increase in the confidence, and new measures and rewards for the support of the closer coordination of the strategic and tactical thinking
http://www.gs1.org/docs/gdsn/gci_2016.pdf
Product life cycle
1. An embryonic industry environment
The IKEA's industrial climate in introduction the stage is marked by market growth, little competition, new technology, heavy investment requirements and high prices. Market growth begins from small lower surface and establishes fast. Primary demand for the product catches on to grow, and products are for possible users do not trust. Competition is in the starting of IKEA, unprofitable stage. Technological development refers a highly-qualified of the product innovation and the technological change also. Dominating ones technological Designs and standards were not manufactured and the technology is understood not completely about the creators. Only some pioneers investigate the market, and competitors focus inside and refer their attention to their product instead of their competitors. The investment requirements are important. IKEA's investment is necessary to support the costs of organizing a new venture and the development of its new products and services. Additionally prices bend to be rather erasable highly however. Despite the high price and the evaporability customers are ready to pay a high price for the new products and the services and are ready to resist explosions in the price level of the products and the services. As it is starting stage, sales are few and can be slow establish, since new sales markets develop. However during the industry developed, grows itself conversion. Here profits are generally negative. The ventures produce, few incomes however take themselves on high levels of expenses.
2. A growth industry environment
As the IKEA's products begin to grow in order to try, the sales begin and begin usually to follow profit. This is a great time for an enterprise a new product introduces, because the enterprise still the monopoly into the early development stage. The IKEA produces all conversions and profits of the new product. There the "Early Adopters" begins influence of the early majority, conversion and profit. The oppositions have also the establishment observed from the new product. Unfortunately for the original enterprise, opposition has also notices success of the new product. Although they do not win first, competition running on the offer of own products and you a portion of an increasing market. Although conversion and profit stage further growth to grow in that it partition manufacturers under many.
A shakeout industry environment
In this phase IKEA is characterized by many variations of products on the market and several product. The oppositions are strong and enterprise is, to divide fights for a larger market. while the entire industry profit is strongly, because conversion are high and many units are sold, profits per unit begins to sink and market growth begins drop down. After the initial mass, in this phase are shaken off the manufacturers wish. Here IKEA started taking the steps over fusions and bankruptcy instead of "dubiously". IKEA in USA, revealed itself as a weak competitor the market abandoned and strong competitors their place takes itself and to challenge, into the next phase of the cycle of the industry. The number of the opponents is further far above the ground
4. A mature industry environment
Ending the growth of the life cycle, the IKEA's begins the market to become competing much and this tendency continues into the starting period of the ripe phase. Except many more manufacturers, that offer their products, the producers continue the product distinction process, which is begun in the growth stage. The effect is a market, which is satisfied with many manufacturers, which offer many models of the product. With so many companies now in the market, the opposition for customers becomes aggressive. Although total sales continue rising in the first part of the ripe phase the increased competition causes profits to the point at the end of the expansion stage and the beginning of the ripe phase. Profits sink then during the remainder of the ripe phase. The sloping profit means that the market is not so attractive to the companies, as it was in the expansion phase In the expansion stage ineffective companies even made money. Though only the IKEA and their products survive in the ripe phase. Company begin to fall out while they see profit revolution to the losses.
5. A declining industry environment
The most the companies, which leave the market, continues and speed up in the decrease phase. Fight for a market share between companies is excessive-expensive, therefore the companies are forced to combine. In this phase not only the IKEA's efficiency of the company play a factor in the acceptance, in addition, the product category become now a actor. Up to this time can the market the product notice, how old and he cannot be in the demand any more. The IKEA products drives away to exist, so long some manufacturer's profitability maintained can. The stragglers resist change to the alternative and manufacturers, that can serve this niche profitably, continue, doing thus. Finally the stragglers even switch, to withdraw and the last companies, which produce the products, in a forced manner, thus one kills the product cluster. The industry can exist to continue, while the product caused, the industry for that shaped history becomes.
Boston Consulting Group (BCG Matrix)
The BCG matrix is a Portfolio strategy that managers use, in order to categorize their corporation enterprises by growth and relative marketplace share, them helps, decides, how Corporate invest. The matrix, in the above illustration separates enterprises into four categories, depending on, like fast the market grows whether it is high growth or low growth and the range of the enterprise the portion of this market whether high or low. This IKEA BCG matrix is based on the company future assessments. Till now the IKEA does not have Stock Exchange.
Stars are companies, which have a large portion of a fast growing market. In order to use the fast growing market and its strength of a star in this market, at the present IKEA is in this position in the most of the countries. The company must invest largely in it. Though, the asset is useful, because many stars make substantial future profits. They are planning to spread their company in many places. As for the results 2008/09, IKEA's sales raise by 1.4 percent to $28.2 billion in Asia and in the list South Korea is top. In Australia, in NSW they are opening one more store and it the biggest store in Australia when compared to other. Question marks are companies, with small portion of a fast growing market. When IKEA started thinking of expansion is starting from the Asia because the sales in that place is always high. If the company invests in these , they can finally moves into stars, but their relative weakness in the market in the starting phase forms, they thought investing in the question marks more riskily than, investing in the stars. Cash cows are corporation with large share of a slow-growing market. IKEA was in this situation in US. Through they got large share but is development was very slow in US in their early stages. They were growing at low pace that why in this phase they are in profitable and stable. Finally, dogs, this stage also faced by the IKEA in the very early time when they started in their business in Sweden, where their profit was from neutral and sometimes in negative.
http://www.thelocal.se/29138/20100920/
What will be your strategy for growth over the coming years?
Ohlsson: Ikea is not on the stock exchange. We don't have to grow to show others. We have a philosophy to always take care of what we have. At the moment we are investing in our existing stores in a big way. We are reviewing them from a commercial point of view, from a service point of view. We are making them more energy efficient. Secondly, we want to do more in places where we already are active. There is room to grow in Italy, France and Spain, in Germany, also in China, where we are only scratching the surface.
The third thing is to go into new markets. We will open in Croatia, we will open in Serbia, in Slovenia. If legislation in India changes, we will go into India immediately. The problem there is: We don't want to be in joint ventures, we want to be independent. We are also buying land and preparing for going into South Korea. We will add about 15 new stores a year. This is more than the average we have had over the last 10 years. http://www.monstersandcritics.com/news/business/news/article_1531197.php/INTERVIEW-Furniture-giant-Ikea-growing-despite-economic-slump
MCflan
Now the IKEA's business analysis is in the these four classification. They are
Support
Strategic
Production
Turnaround
Support: The effect of the IKEA IS into existing/future growth of applications small. IT/IS-systems is used more internal for administrative for the improvement of the efficiency essentially. The IKEA is not much concentrated on this phase. All the applications in this phase is valuable but the for business. The examples of this one is payroll, accounting details and the contact details of all other branches.
Production: IT/IS is not crucially for the current enterprise however in the center of the strategic enterprise development reliable information are necessary for the administrative administration and procedure. Future IT-applications are not the crucial factor for the future entrepreneurial success. The IKEA here they change according to the technology and their focus is on the improvement of performance. Like for wood production.
Strategic: IKEA is active under conditions, where there is already a central and its future dependent and coined/shaped by the development of IS. Business operations are not potential without the employment on modern information. The products and services tend to support computers. The IKEA is always looking at the competitive advantage and they move with competitive focus ex: financial services.
Turnaround: IT always pervasive and is as a tool for the transformation of the systems is untested recognized that can be planned and developed crucially for the enterprise surviving or growth is however uncertain, like the abilities of the enterprise regarding the supply and support. The IKEA turnaround is most of the time uncertain, they most of the time experienced nil stock items in the stores. To reduce this they are trying to competitive positive approach.
The grid has four quadrants built around two straightforward questions:
How important does management feel the current IT systems are to the company?
How important does the company think future developments in IT will be for the company i.e. the impact of future IT developments on its way of doing business
The lattice has four quadrants questions approximately two built simply: how does management feel about the current IT systems are important to the company? Second, as the important of future think enterprises of developments in their IT for the enterprise means the effects of the future IT-developments for liability of business
Low Current: Low future effects. It supported few relevance and simply existing processes.
Low Current : High future effects. IT becomes more on the company plan in the future. The enterprise believes that IT/IS has a large power on their business in the future and IT is in turnaround role that is IT becomes a substantial component of future strategic planning. It cannot have played such a role in the past.
The example for this is IKEA's EFTPOS technology, the scanning of the products at the checkout counters. This technology updates not only the price and computer bill but also all the products availability, Where the suppliers gets the information about stock record.
The IKEA store can also use the data gather from loyalty cards from the point of sale for marketing point. Payments from the purchaser and to the provider are computerized electronically. So IT is a key part of operations.
Current high: Future is less impact. IT, here also said that a factory had a role. It is important in the context of day to day operations is not being felt, but that it will horizon any major events as the original will to change the nature of work. Here, major point is that the existing system maintenance.
For the role of companies in factories, will be the main issue of their security systems, procedures assistance, recovery disaster and standby arrangements.
High current: High future impact: In this, IT plays prominent role in current and the future IT expansions are viewed on the business. IT/IS has strategic importance. The IKEA is not going to do business without the IT to deliver its products and the business at present as well as future. IT strategy acting in formulation of the business strategy is significant especially in the financial services.
The main three factors that drive the position of the firm are:
The facility of management to go with the prospective of IT with firm's operations and strategy.
The planned options that management makes with respect to IT such as improve quality or cut cost or to develop new business.
What is phenomenon in the rigid competitive environment .
CRM
What are the success factors of IKEA?s CRM? Why?
Sales Factor
E-Shopping offers its customer a Self service for the purchase to elegant furniture. , Because these customers are not in business buy, E-Shopping can help costs to save in the selling. Beyond that customers have the flexibility, those purchases at each time and at each place. Also the customer information from the E-Shopping-system field service sees a simpler way to receive customer in order. The good organization and efficiency of the selling work will be improved regarding the information Research analysis software
Marketing Factor
The execution of a e-campaign on the Website assist to save IKEA costs with the advertising of enterprises and its products. the analysed and the collected information of E-Shopping, the marketing branch updates sales promotion or the arrival of new products to its regular customers admits to make. It helps also to hold the connection between IKEA and customers and helps in such a way the mechanism of good relation.
Customer Service Factor
Customer service offers One stop Shop service for the customers. For the improvement of the efficiency in the enterprise and offer a better service, customers demand or inquiry according to tied means is distributed. The use of ACD and IVR systems can in such a way save and make costs for the management team possible around the productivity to supervise easily from the business reports. By Internet stored, IKEA Multi Channel contact points offers telephone calls and media such as advertisement in the television and shows for its customers, thereby it IKEAS information and services at any time and at each place can be received.
Suggestions for Improvement
Service plays an vital role with IKEA all Sales support, inquiries and wishes by this department over different channels is completed. They can by telephone inquiries, E-Mail inquiries or in counter service. All these services require live spectator numbers and the costs are high. Today Internet will is used frequently with the procurement of information and for E-Trading, should organize IKEA again their Website, in order to master these requirements. For instance the improvement of the FAQ on the Website will contribute to it, most of the questions frequently placed immediately answers more and above all, it lowers the costs of the work resources to help.
http://www.g-cem.org/eng/content_details.jsp?contentid=304&subjectid=2
Suggested generic management strategies (Parsons)
Parsons gave six mandates, which with the administration and the position concerns IT-function, the role of the IT with financing, calculation and to IT-examination problems.
attitude
Leading edge
High examine and growth investment demand to expand systems state of the art. High R & D-tools to be used, around their products of other form the other competitors, To gradation of their products, must programming is continuous be located in the market with future-oriented.
Centrally planned
Planned taken up decision making unit requires central planned IT-and Businesses central by a high-ranking. IS and IT-Portfolios are considered and judged on planned and economical assistance. Here operation manager has in close co-operation with IT-co-worker and user with the technicians. Like that it is in the future better results product with good quality.
Free market
user use IT as strategic tools for maintain if different factor make out more significant to success. IKEA is producing more reliable products to customers with low price with the use of latest technology and they make sure that no one can compete with them.
Monopoly
When the IKEA customer satisfies with the low cost quality furniture's products, it passed on as the monopoly of IT strategy. The fundamental IT functions delivers a service to support the core systems. When customer searches on IKEAS website, automatically it carries for linking to any page, supports data model all should be maintained. So that customers can get responsive of their products.
Scare resources
A scare resource is as financial strategy, which controls for IT-investments well-known. IKEA has many various sections for production, so that every section demands more attention and invest . With IT-the costs will be reduced firmly and be expected the household strictly. But if information with limited resources intended, IS is & IT as a limited evaluation seen.
Necessary Evil
IT for the fundamental purpose, if there is no other alternatives.
Alignment to business strategy developed in report 1.
According to the analysis in assignment 1, IKEA's marketplace grows fast and can strive all over the market. though, there still some difficulty to expand its business in some US states, because IKEA has high competition in the market, other brand image and some distribution issues. As a outcome, some tactical plans must to be organized. It comprises of executing new technology in production with high products availability with best quality compare to other in order to participate with challengers, build up logistics and distribution through construction of new warehouses, expansion of marketing to enhance brand reflection through the invest on marketing.
The strategic planning has to make parallel with IS and IT. Support of the analysis, it is open that IT and IS are key utilities in IKEA's strategic planning. With relation of strategic planning in IKEA's production, IT with IS were use for improving new technology to manufacture competent and environmental friendly products. Strategic plan for distribution and logistics is functional with web-based ordering scheme for customers, using the supply chain management process. This IT and IS function will enhance the IKEA's marketing for pulling new customers and IKEA will gets brand name and loyalty in the marketplace.
Conclusion and recommendation
The investigation shows how IT and IS controlled IKEA business. As the industry growth, IT and IS are significant elements in IKEA's business and has used for strategic planning. In IKEA business, even if IS/IT build barriers to new competitor, it also offers competitive advantage for new company.
Because the competitive is on edge, IT/IS that executed by IKEA have been disturbing and suppliers competitors. IT/IS are tense in research, production, development, marketing, services and sales. It consists of new flat pack technology to produce a low cost with quality and with less environment cause. Moreover, IKEAs IS execution of products acknowledged awards for its style and quality. Other one is implementation of the online service in some Asian countries, This technology allow IKEA to improve its services, marketing, sales and promotions from the online system.
Though IS and IT put into practice by IKEA's achievement for its business, it is essential for IKEA to continue use of IT and IS in order to develop the business to be the market organizer in all the countries.
Even though the IT and IS executed through IKEA has enhanced the production particularly in sales growth, IKEA has few limitation to wrap. This part is in Nil stock of products due to its supply and distribution activities. From the other side requirement from customers is high. IKEA by now has supply chain and distribution system, still it is important to advance in those areas. It is suggested for IKEA to erect more distribution centres and warehouses
