IKEA Invades America: (Y. Moon,

¶ … IKEA invades America: (Y. Moon, Harvard Business School case no. 9-509-094, rev. September 2004)

What factors account for the success of IKEA?

Some of the factors for success of IKEA include the customization of its furniture along with the amenities offered to customers at its shopping locations.

Despite its success there are many downsides to shopping at IKEA. What are some of these downsides?

Some of the downsides of shopping at IKEA include that customers transported their purchases home and had to assemble the furniture they purchase on their own as well. In addition the style selection at IKEA was limited.

Some industry observers have suggested that IKEA should open a number of smaller, satellite stores across the U.S. (eg. In shopping malls). By offering a limited range of IKEA products, these "IKEA Lite" stores would presumably give customers who do not otherwise have access to a full-size IKEA the opportunity to experience the brand. In addition, customers who do live near the full-size IKEA would be able to use these mini-outlets to take minor purchases (eg. purchase of a set of mugs, as opposed to an entire living room set. Do you agree with this idea? Why or why not?

If IKEA had the smaller size stores or mini-outlets they would lose their competitive edge on low-prices due to higher overhead.

Case study: Avon.com (D.B. Godes, Harvard Business School case no. 9-503-016 / 9-503-041, rev. March 2003)

1) Should Edwards recommend to Jung that Avon sell directly to consumers? What would the other elements of this strategy look like? Would the commission levels change? Which products would be sold online and which would not?

Avon has always sold its products door-to-door and this is part of Avon's branding of its products. Changing this would change the entire face of the company and would change its branding of it products as well. It is stated in the case study as follows:

Avon was different from the prototypical direct seller in two ways: however, how their representatives were organized and how they sold is described as such that parted ranks from other direct sellers since their attention is not focused solely on network marketing as most of their representatives are organized into a single level, which frees up their time for selling vs. recruiting efforts. (paraphrased) Avon sells its products in one-on-one meetings at work over home or over coffee so that the benefits of the products can be related to the customer. The commissions paid to the representatives is 40% of the product price. This created a dilemma about the commissions, the marketing, the choice of products to sell online and the shipping methods. There should not be a great change in the levels of commission as the Avon representative would still be the driving force that brought the customer to the website to shop for the Avon products.

2) What would Edwards hope to gain from such a strategy?

The new marketing strategy could serve to bring a greater customer base to the company.

Case study: Dogfight over Europe (J.Rivkin, Harvard Business School case no. 9-700-115 / 116/117, rev. November 2007)

1) What is your assessment of Ryanair's launch strategy?

Ryanair ran four round trips each day and offered meals and amenities that were similar to Aer LInguis and British Airways. The company decided to distinguish itself by first, focusing intently on delivering first-rate customer service and secondly, charign a single fare for a ticket with no restrictions. Lowering of fares in May 1996 was met by Aer Lingus and British Airways with a lowering of their fare and in response Ryanair lowered its unrestricted fare in what was termed to be "predatory pricing…to take over market share." The initial performance of Ryanair was good with its flights being nearly 100% booked. While Rynaiar had startup losses in 1985, it posted profits of approximately 2 million in 1986 and even a larger profit in 1987. Ryanair expanded greatly with new routes being run by the company and eventually with five aircraft and 27 routes. The company was smart in its initital introduction prices then gaining a following through their excellent customer services.

2) Can the Ryan brothers make money at the I£98?

While the low price of I£98 did not make the Ryan brothers as high profit, what it did do was gain them the largest share of the market and through expansion and near 100% booking on flights they were able to profit.