Recommendations of Ikeas Cost Efficient Supply Chain Case Analysis

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Recommendations of Ikeas Cost Efficient Supply Chain Case Study Solution

On the basis of above internal and external analysis of the business in addition to the assessment of different alternatives, the business is suggested to think about alternative 3. As alternative 3 would enable the business to expand in international markets with no reduction in its local revenues and any wear and tear of its market position. By thinking about Alternative 3, the company might maintain its shop experience and brand uniqueness. It could also consider alternative 2 that might enable the business to access the markets without any prospective investment. The business might pursue alternative 1 which would allow the company to focus on prospective international markets rather than the regional markets however as the company is highly dependent on the regional markets with 90% of its shops in the US, there fore pursuing option 1 would result in the significant decline in business's profits. For that reason, the business is suggested to consider alternative 3.

Aletrnative-1: Expanding International Brick and Recommendations of Ikeas Cost Efficient Supply Chain Case Help Stores

Growth towards international markets through opening brand-new shops in other Europe and Asian nations with closing domestic shops is although a great alternative for increasing the international existence of the company. The closing of domestic stores might highly affect the revenues of the company as above 90% of its stores are situated locally and closing those shops would eventually reduce the earnings of the firm. Additionally, the business has a long term market position in United States which can not be created quickly in the new markets. The alternative would assist the company to broaden in global markets together with the elimination of problems raised in its local markets associated with its variety. The benefits and drawbacks for Option 1 are listed below;

Pros:

• Expedition of brand-new worldwide markets.
• Increase in profits from global markets.
• Elimination of problems related to diversity.
• Income diversity.
• Step towards being a strong worldwide brand name.

Cons:

• Loss of comprehensive earnings from the regional markets.
• Increase in competitors.
• Distinctions in cultures could caused a failure of the brand particularly in Asian nations.
• Low earnings at preliminary levels.
• Increase in marketing expenses to acquire market share.

Alternative-2: Introduction of Click and Recommendations of Ikeas Cost Efficient Supply Chain Case Help Stores

Alternative 2 consists of the intro of online market locations through generating a correct company's site. With the increased patterns towards online shopping, the online stores like Amazon, Alibaba etc. could present a severe danger to the marketplace share of company. The rivals are moving towards click and Recommendations of Ikeas Cost Efficient Supply Chain Case Help stores with Gap introducing Piperline. This shift towards online markets might lower the earnings for business. In this circumstance the business might think about introducing Click and Recommendations of Ikeas Cost Efficient Supply Chain Case Analysis stores. These shops with a low requirement of funds to settle would make it possible for the business to reach international markets, without ending its domestic stores. The advantages and disadvantages of option 2 are given as follows;

Pros:

• Low financial investment
• Decreasing competition risk
• Access to the world markets
• Expanding customer base
• Easy to manage
• Large Earnings
• Low Operating Costs
• Easy new market entrance

Cons:

• Hazard to the marketplace position
• Removal of brand name Originality
• Removal of the great shop experience.
• Danger of decline in elite sales.

Alternative-3: Expansion towards International Markets Without closing Domestic Stores

Another choice that the business might consider, is to expand towards the global markets without closing its domestic stores that adds to the huge part of earnings of the business. The benefits and drawbacks connected to Alternative 3 are given below;

Pros:

• Reducing competitors danger
• Access to the world markets
• Increasing the size of consumer base
• Big Incomes
• Expedition of new global markets.
• Boost in profits from worldwide markets.
• Revenue diversity.
• Action towards being a strong international brand.

Cons:

• Extension of concerns associated with diversity.
• Differences in cultures could resulted in a failure of the brand specifically in Asian countries.
• Low revenues at initial levels.
• Increase in marketing expenditures to get market share.



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