Ikea Case Analysis

Ikea is a successful global brand with varying presence in geographical markets. Numerically, Ikea has significantly more store locations in Europe than in the growing markets of Russia, China, and the United States however the customer response is quite similar across the board. Ikea's success is overwhelmingly due to the company's innovative product offering and the large market it serves. Ikea stores provide a common experience to customers in all of their locations: a giant warehouse, thousands of furniture goods and accessories, products that are stylish yet affordable and functional. Ikea's target market of the global middle class has demonstrated that it strongly shares buying and spending habits, despite any cultural differences. The leading models of furniture purchased and even the average amount of money spent per store visit is a market trend.


The Ikea brand is strongly linked to design. The design of an Ikea store is organized in the shape of a circle, so that customers can see everything in the entire place by moving in only one direction. This is convenient. At the same time, the circular path is a wide one to allow for some customers to stop and look at products and display setups without hindering the experience or blocking the pathway of others. A restaurant is often placed in the center of an Ikea store, where a customer can step off the circle for a pit stop before resuming shopping with the encouragement of recent nourishment. Product design itself is even more important. The company strives to produce stylish and even beautiful items, although always within cost constraints. If an offering cannot be made affordable to middle class shoppers, it won't be offered at all. Ikea makes inexpensive complementary products to point out all the things the customer never knew they needed and then rotates out a third of its entire catalog line every year to keep items fresh, desirable, and relevant. Additional design considerations include using recycled products as raw materials and a fold-flat architecture for ease of transport and minimization of shipping expense. Design is crucial to Ikea's positioning and is the key differentiate in building its brand equity.

Ikea's brand equity is currently strong, however the emergence of competition in growing markets make it harder to defend. The brand equity of Ikea is encompasses its individual products, product groupings, real-life displays, business processes, and sales initiatives. In the U.S., a couple of established companies which are now challenging Ikea's brand equity in its target markets are Target and Kmart. The strength and advantage these two bring to the table is that they already have a customer base of middle-class Americans to solicit new offerings to, and the physical marketplaces and infrastructures. If Target and/or Kmart can successfully build stylish, functional, and affordable out-of-the-box furniture into their store catalog, Ikea may lose out on some ground it's aiming to gain in the United States. Although not a lone wolf in corporate strength, Ikea's product edge is a major piece of its brand equity.

Ikea is leveraging its brand smartly. The company's outward focus on product design is slickly enhanced by unique promotions and an almost cult-culture following. I believe Ikea should stick to its current expansion strategy, growing in number of stores annually based on strict financial ability. By maintaining a frugal attitude throughout all operations, Ikea will continue to strengthen its brand reputation. A rapid expansion into the United States, Moscow, or Beijing could prove futile; Ikea has received lessons in this arena from past failures in Japan and the United States. Ikea must continue to leverage its cult following, the lifestyle aspect of its brand--making subtle adjustments as regional markets demand.

Risks to the Ikea brand include the loss of its cult following, a change in relevance to the global middle class, and decreased sales in the face of competition. To address all these possibilities, the Ikea Brand Manager needs to be especially careful about a change in the company's inner corporate culture. As Ingvar Kamprad, Ikea's founder, ages and his influence on the company is distanced via a diminishing link through long-time employees, culture change could become a reality. If the brains and workers of Ikea start to think about things and act upon things differently, "Ikea World" may cease to exist.

U.S. Highways Never More than 2 Days Away

From Backpacker magazine, September 2008:

 

"Astonishingly, in the entire continental U.S., coast to coast, Mexico to Canada, there is only one place left where you can get more than 20 miles from a road: in the greater Yellowstone region."

 

Imagine what the next 250 years could bring.

Hiking on the Brain

I can never stop thinking about hiking the week after returning from a trip. The three organizations which I have thus far based all of my hiking aspirations on are listed below.

Adirondack 46er membership requirements:

• Climb the 46 Adirondack High Peaks
  

Catskill 3500 Club membership requirements:

• Climb the 35 Catskill High Peaks above 3,500'

Northeast 111er membership requirements:

• Climb the 115 highest peaks in the Northeastern USA (those above 4,000')
  

Lenovo Case Analysis

The overall corporate brand positioning of Lenovo should be similar to that of Hyundai in the automobile industry. Lenovo should portray itself as being the PC company that provides home consumers and small businesses with an up-to-date product that will "get you where you need to go" without having to think about the PC itself due to its worry-free performance package (or 100,000 mile warranty). Lenovo should leverage both its Chinese roots in efficiency and the ThinkPad reputation of quality in building its global brand. Developing global corporate brand is important to Lenovo because of the increasing flatness of competition across the industry. While Lenovo has strong sales and dominance in its home market of China now, competitors such as HP and Dell who already have globalized business structures in place will be moving in to that market as well as all the emerging markets around the world where growth in computing is growing fastest, ie. Middle East, western Asia.


In its PC line of business, Lenovo chose a "one-two punch" strategy with a strong overall master brand, to include a performance line of Think-branded products. The two main product lines are the Lenovo 3000 series and the ThinkPad / ThinkCentre series and are geared toward two different customers' needs. The brand architecture of the 3000 Family is to be the industry-standard consisting of stock models, value prices, contemporary design, and a secure experience. The Think machines are to be industry-leading PCs, with custom models, classic styling, complete business solutions, and the absolutely most reliable and secure enterprise-grade computers on the market. In my opinion, positioning this way is OK, so long as the Lenovo tradition of innovation does not get lost in its family and home-PC line of products. Lenovo has chosen to effectively use the ThinkPad name it acquired from its IBM-PC acquisition as a "hero-brand", attempting to maintain traditional IBM computer customers while at the same time extending the quality perception of the ThinkPad into Lenovo-brand products across the board. I agree with Lenovo's strategy to maximally leverage the ThinkPad trademark. By keeping ThinkPad as a separate, performance line it will not damage the ThinkPad brand equity, and by building the ThinkPad + Lenovo connection through advertising and marketing campaigns the ThinkPad reputation can eventually bleed into the rest of Lenovo. Other approaches to corporate branding could significantly have hurt the ThinkPad brand, such as the suggestion of some Lenovo execs to "take the retail products Lenovo sells in China, label them ThinkPad and take them around the world." This might possibly have created large sales in the first year, but the risk of committed ThinkPad-buyers realizing they had been betrayed by the brand name they loved would have been too great. Wasting away Lenovo's rights to the ThinkPad tradition would've been Lenovo's last mistake.

Lenovo's use of the IBM logo was initially dictated by the acquisition agreement. Lenovo could use the IBM logo on products for up to 5 years, and the logo could appear ON products for the same time period in advertisements, but NOT as a separate logo. Lenovo learned early though, that showing the IBM logo too frequently would detract from the higher goal of building the Lenovo brand. An early Lenovo model released to the market was received well, but most of the credit went to the IBM brand. That was the risk of over-using the IBM brand, not allowing the Lenovo name to build its own momentum. I probably would have thrown the IBM logo on as many products as possible at first as well, given that the IBM reputation spanned 25 years. Lenovo's early decision to focus more on leveraging the ThinkPad name than its IBM precedent was an excellent decision. While the IBM brand gives credibility across a wider spectrum of computing, the ThinkPad name has a specific reputation that Lenovo could really lean on and attach its own corporate brand to.

I do not think that using a product number (ie. "3000") for Lenovo's first line of non-ThinkPad products was the best idea. Numbers are pretty generic, in that the same number may appear on many products across many industries. Choosing a fresh, new name as Sony or Compaq did with the Vaio and Presario would've been my choice for a more memorable experience. Sony as a master brand is a great endorsement for any product, and Lenovo should be seeking the same with its new company. With the ThinkPad reputation lending itself to the Lenovo master brand, using a number would seem to me to quantify the values of "rock-solid performance" and "the ultimate tool" that the Lenovo brand gained via purchase. These values are items I think should not be ranked numerically and should be considered as top-notch or all-or-nothing attributes. If the Lenovo 3000 was the best, how could the Lenovo 4000 be better? To stand out in both the high-performance business market (ThinkPad) and the home computing market, Lenovo should differentiate itself as being "best"--that combination of East and West, innovation and efficiency--across the board. Perhaps the Lenovo Think-brand might be accompanied by Lenovo SmartPC, a name to imply a good family choice, easy on the budget, and a good home companion.

100,001

The mileage on my Av tipped the 100K mark tonight as I passed Connelly's Cove on the way home from Newark.

Let's see...that's about 52,000 miles that I have put on since acquiring my 2002 Chevy Avalanche from Cavallaro-Neubauer in Wolcott, New York. 52,000 miles @ approx. 15 mpg is 52,000 / 15 = 3,467 gallons of gasoline. 3,467 gallons of gas @ ~$3.00 per gallon is 3,467 x 3 = $10,401 spent on gasoline.

So, considering the actual gas prices we've seen, I've easily spent more than $10,400 on gas in 2 years. Almost 6 months of that time I was in training and not doing much driving at all.

Transferring Files to Your New Laptop

Some recent guidance I gave to a family member:

 

If you plan on getting a laptop with Windows Vista (I assume this is likely, newest Windows operating system), then there appears to be a fairly simple process to transfer information from your old computer system to the new system. I have not done it myself, but it looks like purchasing this $40 cable (software CD included) will be all you need:
 
http://www.belkin.com/easytransfercable/
 
The Basic 3 Steps
 
Step 1- Install software on old computer
Step 2- connect both computers with the cable
Step 3- follow on-screen directions (on old computer) to transfer files
 
Here are a few overview videos:
 
About Windows Easy Transfer: http://www.youtube.com/watch?v=Pjqv1-nY56g
About the cable: http://www.youtube.com/watch?v=CMDN5l7Lty4

And then here is a good, step-by-step set of instructions:
 
http://www.bleepingcomputer.com/tutorials/index.php?act=print&tut=138&client=printer
 
***Under 'Table of Contents', click on #4 'Using Windows Easy Transfer with a Easy Transfer Cable', and that should lead you through the transfer process.