Q3.)The Netherlands-based Swedish company IKEA, was the largest furniture retailer in the world with its presence in 44 countries around the globe – in countries like the US, the UK, Russia, the Euro region, Japan, China, Australia, etc. However, it did not enter the Indian market till 2013, though the company had had its presence in the country since the 1980s as a sourcing destination for its global stores.
After years of lobbying, and negotiating with and convincing the Indian politicos and bureaucrats, on May 2, 2013, IKEA’s €1.5 billion investment proposal to set up its stores in India was finally accepted by the local government.
The case is structured to achieve the following teaching objectives:
· Understand issues and challenges related to IKEA’s business model and its competitive strategy
· Understand issues and challenges related to IKEA’s globalization and strategy in a key emerging market.
· Understand issues related to IKEA’s market entry strategy and expansion in India
· Identify challenges that IKEA could face in the Indian market and explore ways in which these could be overcome.
Q4.)Best Buy, the largest electronic retailer in US as of 2013, was founded as an audio specialty company Sound of Music in 1966 by Richard Schulze and Gary Smoliak. In 1983, the company’s name was changed to ‘Best Buy’. It was the first electronics retailer to establish a superstore. Best Buy began its e-commerce retail business by launching bestbuy.com in 2000.
Due to rapidly changing technology, the interest of customers in purchasing huge TVs, PCs, and CDs had started to wane and interest in high-end gadgets like mobiles, tablets, etc was on the rise. To make matters worse, the US was hit by recession and customers were looking for low prices, which online retailers were able to provide. It was at this time that Brian Dunn became the CEO of Best Buy.
He came out with a strategy called ‘connected world’, where the stores were remodeled and the latest electronic gadgets were displayed at the stores. These stores had knowledgeable sales staff to assist the customers. The initiative had a positive impact on the company. But in the next few quarters, sales and comparable sales started to decline and Best Buy began facing competition from retailers like Wal-Mart and H H Greg. It became a victim of “showrooming”, where customers visited the stores to see the products, compared the prices online, and bought from whichever retailer was offering the lowest price. In early 2011, Best Buy’s market share dropped to 22%.
»Impact of recession on electronics retail
»The changing dynamics of retail industry in the US
»Growing importance of online retailers
»Pros and cons of technology in retail business
»Strategies to be followed during recession
»Challenges a market leader can face
Q5.)The case discusses the challenges before Yasumori Ihara (Ihara), Executive Vice President of Toyota Motor Corporation (Toyota), who was in charge of the company’s emerging markets. In 2011, world’s largest automaker,
Toyota, based in Tokyo, Japan, announced its Global Vision, in which the automaker targeted emerging markets and getting 50% of its global sales by 2015 from them. In 2012, emerging markets accounted for 42.5% of Toyota’s consolidated vehicle sales compared to 35% in 2008.
The case goes on to discuss the strategies adopted by Toyota to increase its presence in emerging markets. As part of its efforts to strengthen the supply chain in the growing emerging market, Toyota expanded its production capacity in these markets from 540,000 vehicles in 2000 to 2.38 million vehicles by 2010. In 2013, it invested heavily in the emerging markets. However, the company had to contend with intense competition in emerging markets as well. Moreover, as of 2013, while developed economies seemed to be growing stronger, the emerging markets were underperforming. The sluggish growth and high volatility in emerging markets raised concerns among some analysts that these markets were no longer attractive enough. In addition to getting Toyota’s emerging markets strategy right, Ihara’s main responsibility was to reverse the disastrous sales decline in China.
» Understand issues and challenges in developing and implementing an emerging markets strategy.
» Study and analyze the automobile industry in emerging markets and discuss and debate whether automakers should focus on these markets;
» Evaluate the strategies adopted by Toyota to increase its presence in emerging markets;
» Discuss ways in which Toyota could get its emerging markets strategy right and bolster its position further in emerging markets.
Q6.)In January 2010, Central City Opera House Association’s (CCOHA) Board members realized the pressing need to evaluate the organization’s business model. The urgency was brought on by growing deficits in the organization’s finances compounded by the economic crisis in the State of Colora and the nation. Founded in 1933, CCOHA’s mission was to “Foster interest and education in performing arts.” The purpose was to create “a summer arts festival to restore and utilize the historic Central City Opera House built in 1878.” As such, this non-profit organization’s goals included not only maintaining artistic excellence in its programming but also preserving and restoring its 550-seat opera house and 28 additional historic buildings including 25 residences, built in Central City from1860 to 1900.
The Opera House owned by the Association nestled in the scenic mountains and was an integral part of the history and culture of Central City and the Blackhawk National Landmark Historic District. However, declining revenues and contributions, and rising operating costs threatened the Association’s very existence. In an effort to reverse these adverse trends, Board Chair Jerome Martin and Treasurer Peter Benz began to search for new business models.
» Evaluate CCOHA’s strengths and weaknesses using the RBV (Resource-based view) framework popular in the field of Strategic Management and identify CCOHA’s sources of competitive advantages.
» Examine CCOHA’s financial statements and assess if the organization needs a new and different business model.
» Discuss CCOHA’s business model and suggest if CCOHA should close or continue to operate with a new business model.