6 - IKEA - to leverage Sears’ resources and marketing...

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Case 6: IKEA The core issue of the case is about how IKEA should response to the threat resulting from Sears’ Elements action. The resource-based view would consider Sears’ mimicry as a serious threat as it may erode IKEA’s sustainable competitive advantage. However, in this case, IKEA should NOT response to Sears’ challenge in the short run for two reasons. First, KD furniture concept is in the beginning stage of its life cycle. Sears can reach some areas where IKEA is not able to reach by itself. According to the idea diffusion logic (industry life cycle and/or network externality), IKEA should welcome Sears’ action in order to get more people to explore the KD furniture concept. Sears action can legitimize KD furniture concept. So what IKEA should do is
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Unformatted text preview: to leverage Sears’ resources and marketing efforts to accelerate the time to achieve the critical mass. IKEA’s marketing effort should not attract Sears (not to mention lawsuits) but just be sure that IKEA is the leading brand of KD furniture. So it should emphasize the concept is from Europe and IKEA is an European company. Second, IKEA has limited resources to engage a head-to-head competition with Sears. (Remember it was late 80s). But this is just a short-term strategy. IKEA should also design a long-term strategy to benefit more from the growth of the KD furniture market in the future. There are other related issues as well....
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This note was uploaded on 01/26/2010 for the course ADMS 4900 taught by Professor Jungchinshen during the Spring '10 term at York University.

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