Assignment:
Review an IKEA Invades America by youngme moon
Create a 2 page:
Summary of the critical issues (10pts) Exceeds Expectations
Most of the information in the case is not repeated. Meets Expectations
Identificaton of internal and external issues. Marginally Meets Expectations
Identification of the most important issues Does not Meet Expectations
We made an outline for the summary:
Problems:
General
1. Product lifespan was short
2. Product design was not suitable for American customer, target market young people
3. Furniture selections was limited according to the"matrix"
4. Due to the sheer size and layout of the stores, the ability for consumers to quickly locate and select a small number of products and vacate the premises is very difficult.
5. Highly fragmented and competitive market - taking market share is difficult.
6. How to expand their market share with such niche market.
Internal (you can add more if you find anything else)
1. Corporate culture very different than traditional furniture stores?
External
1. Large amount of competitors across all price-points for furniture
2. Niche market
3. Different preferences
The following is the summary by another case, which is about Colgate; this is an example of the summary
Summary
By the end of this case (2005), Colgate Palmolive (CP) was a global company valued at "$10.6 billion" that operated in over 200 countries. Although CP operated in many different industries, one notable strongpoint was their position in the oral care industry as the world's most popular toothpaste and toothbrush brand. To manage their extensive global operations, CP organized management departments by regions. In charge of these regions were category presidents who were measured by market share rather than profitability. CP also separated it's Consumer Innovation Centers by regions, allowing to better cater to local consumer preferences.
CP's present prominence began in 1873, when CP was the first company to both market and commercialize toothpaste. This achievement set the precedent for CP's monopolization of the toothpaste industry until P&G launched a subsidiary, Crest, which created and patented fluoride toothpaste. Crest eventually exploited this patent to dominate the U.S. therapeutic toothpaste market: isolating CP to focus on other international markets instead. Once the industry began to develop and fluoride was widely adopted by most companies, CP set out to regain lost market share with the launch of "Colgate Total" in the U.S. This eventually led to CP overtaking Crest with the most market share in the U.S., while also maintaining its extensive presence in other international markets. More recently within the international scene, CP is seeking to release a new product-line (Colgate Max Fresh) in both China and Mexico, however; they face competition from Crest's own new product-line (Crest Whitening Expressions).
Internal Issues
With a global presence, there's no surprise in knowing that Colgate wishes to cater to all of their regions preferences. Although they do by and large achieve this, Colgate fails to combine the technology and R&D created in each of these regions. As a result, new product lines typically release much earlier in the regions they were developed than in other ones. Another problem that arises from Colgate's organizational structure is the lack of oversight of regional managers. Although giving autonomy to a regional branch may lead to higher efficiency and innovation, it can also lead to a waste of resources. Leading to another problem, Colgate's increasingly costly overhead and marketing expenses. Although certain costs are necessary, such as important market research regarding the viability of a product, other unecesarry costs have caused Colgate Max Fresh to lose money in China by the end of this case (Reference Exhibit 13 in Case Study). Advertisement plays a big part in this, accounting for the majority of costs experienced by Colgate in China; finding ways to lower both media and advertisement costs could assist regional branches in avoiding unnecessary losses. In addition to this, Colgate is also experiencing an issue with the packaging of Colgate Max Fresh in China; where they plan on releasing the product in a "clear stand-up tube". However, this packaging requires several high costs and includes a 6-month delay; ultimately forcing Colgate to decide on whether to enter the Chinese market with the less-popular regular carton packaging.
External Issues
Although Colgate has achieved a tremendous amount of success during the time of the case, they also faced external problems and challenges like in any other multinational corporation. One of these issues arises from Colgate releasing new products that eat into the market share of other already existing similar products. Although this circumstance can be considered a binding factor when releasing a new product, attempting to minimize its effect can assist in maintaining the value of older product lines and increasing the value of a new product. Another problem that arises with the release of a new product line is the lower quantities initially purchased by consumers. Smaller quantities result in lowers revenues, meaning, finding a way to incentivise consumers to purchase more could of a new product could ultimately be very beneficial for Colgate to do. Similarly, whether choosing to focus on the therapeutic toothpaste segment or the cosmetic; Colgate also faces the challenge of deciding on what sector of the toothpaste market they should focus on. This becomes an issue since the release of one product in one segment of the market can entice competitors to release a counter product in another sector. Interestingly enough, Colgate's competitor, Crest, has released a new product (Crest Whitening Expressions), relatively at the same time as the release of Colgate Max Fresh. This scenario presents the prevailing dilemma within the case in which each product line must compete with one another in three markets (U.S., Mexico, China). In Mexico, Colgate holds a relatively high market share at "82%", however; Crest has released its CWE earlier than Colgate release CMF. Meaning. In China, Colgate is faced with the scenario of a highly competitive market whose consumers differentiate highly in product preferences than in the U.S. Likewise, in the U.S., Colgate must maintain the slight lead it holds over Crest (at the time of this case) and find ways to increase it even more.