Delivering the Value Case Study Analysis Essay Example

institution furniture (Wong, B. 2014).

Brief Description of KEA KEA is a Scandinavian company famous for furniture from living rooms to that sells more than 10,000 furnishing products from well over 300 stores in approximately 40 countries. The company has more than 600 million visitors to its stores, and its successful website attracts more than 600 million visitors every year.

It is easy to think about the present without considering the future. Consumers want more goods and services to improve their standard of living. The problem is they make choices about goods and services that have long-term importance for the environment. In our modern world, organizations need to show responsibility. This means that they use resources efficiently, do not harm the environment and consider how what they do affects the ability of future generations to meet their needs. KEA aims to be a responsible organization. It sells low-price home furnishing products around the world.

These include furniture and accessories for kitchens, bedrooms, living rooms, bathrooms and children's rooms: KEA now has stores in approximately 40 countries around the world. It has come a long way in its 60 years of business. The KEA vision "to create a better everyday life for the many people" gives KEA endless opportunities to do good for people and the environment. The "many people" are not Just customers or potential customers. It also covers our co-workers, the people working at our suppliers' factories, the local community and beyond. We believe what is good for society is good for 'KEA.

We are passionate about creating a successful business where we act in a responsible way through small and large actions. It

is a way of being. This is why sustainability is a cornerstone in the KEA strategic direction - it is highly prioritize and serves as a driver of further innovation and development. Economizing with resource, finding new ways of doing things and developing our knowledge and expertise are important parts of our business idea and heritage. A low price company must be a low cost company, and this includes being careful with earth's limited resources.

KEA has unique capabilities and tremendous enthusiasm to make a positive contribution across the world - from the forests of Siberia to the cotton fields of India and all the way into people's homes in New York, Lisbon and Shanghai. Our customers rightly expect us to not only to make our products in a responsible way, but also to help them live more sustainable

The Furniture Store industry in China accounts for about 34. 0% of total revenue from China's furniture sector. The remaining sales are generated by other industries, such as furniture wholesalers, department stores and direct sales from furniture manufacturing industries.

In the five years through 2014, the furniture Store industry has been growing at an annulled rate of 22. 2% to $20. 2 billion. Industry demand is driven by growth in China's housing market and the rapidly developing economy. In 2011, the Chinese government began the construction of 10 million units of non-commercial residential housing (I. E. Indemnification houses) to further improve the living standards of medium-and low-income families and promote the healthy development of the real estate market. Shanghai, one of the most developed regions in China, accounts for the largest proportion of industry revenue at

16. % in 2014.

Gudgeon province and Sandhog province make up 15. 8% and 9. 0% of total industry revenue, respectively. The geographic concentration level of the However, the percentages of household in North East China, North West China and South West China (China's developing regions) are larger than their respective industry revenue shares. This is because the economy is less developed in these regions, and many households are of ethnic minorities that produce and consume furniture within their own cultures (Fishbowls. Com).

As European economy is under recession and consumer behavior has changed now. People are more quality conscious than before in Europe and other parts of the world. Analyzing this global business environment, we could say that offering low priced standard products would be the best strategy in such an economic recession across the world. KEA has already adopted its strategy and it has worked to gain cost advantages to offer low priced standardized furniture products efficiently to customers in a "DO IT YOURSELF" format.

It was the vision from the leadership. It has a vision of offering low prices to actually help those people who has low income and could not afford expensive furniture. It also offers different benefits to its employees in the form of compensation and insurance. Offering low prices was the vision of Angina Kampala and he viewed it as a social service. All the activity systems of KEA are actually designed to support this cause of Angina Kampala (such as cost advantage to offer low price).

It has employed technology for shorter queues, proper scheduling, tracking and trading patterns. It has optimized its supply chain with technology to

meet the customer needs efficiently.

Because of it KEA was facing the problem of coping in China as many Chinese shoppers in KEA were drawing pictures of the furniture and scribbling down descriptions of the product but not necessarily buying them. KEA aims its target group on young low to middle income family. Then KEA started to target different groups of people in China than in other countries later in the KEA 'life cycle' (I. E. , life cycle based on how long KEA has been on a market). The main target group is female customers - 65% of all customers. Women, (age 30-45) according to 'KEA, stand for change in china and they welcome change.

Men are also part of the target group but more indirectly as women are the ones in the family having home furnishing interest and making the actual decisions. Many from Kike's target group are what in China is known as the little emperors': the generation born into the One Child Policy. So it always try to keep cost between manufacturers and customers down, which is the basis KEA used to be successful in its target market. China Shunned Locoing International Furniture City is the biggest furniture trade center in Asia, with more than 3 million square meters of furniture showroom.

It rooms a set of sales, service, logistics, and customs clearance of integration of professional furniture base.  KEA in India Swedish furniture giant Kike's impending entry into the Indian market has awakened scores of international furniture companies to their potential here. Before this Indians purchased KEA product from online sites like Alabama. Com, LOX. Com etc. Those who were

either dilly-dallying over investing in India, or who were lying low in the Indian market, are stepping up operations and investing in marketing or brace themselves for competition once KEA arrives.

For instance, German company Nobility, which used to market its products through Indian retailer H&R Johnson under the Johnson Kitchens brand, now wants to sell the products under its own name and establish its brand. Once KEA comes in. It might be too late for companies to start marketing their brands. KEA is intended to invest RSI 500 core in India over the next five years to set up manufacturing facilities and for training, research and development. Skirt Magna (Hindi) is an area of West Delhi, India. Part of the Punjabi Bag subzero of West Delhi, it primarily a residential colony. Skirt Magna is home to Sais's largest furniture market housing showrooms of multi-national home remodeling and fittings companies, the most reputed interior design brands as well as traditional carpentry furniture makers.

Challenges cultural environment, and political bureaucracy. It has been difficult for the company to set prices at a level that is good for both customers and the company. KEA has been hit with heavy import taxes in China, though the company aims to relocate production of many items to China to solve this problem. The country already supplies glass, timber, textiles, hardware, plastic, and almost anything else the store deeds. KEA faces strict quotas and has difficulties importing food to its Swedish restaurant. The company now has a food-import agent that handles all related issues, including labeling ((Miller, P. M. 2004).

When designing global marketing strategies, companies must understand how culture affects

consumer reactions in each of its world markets. In turn, they must also understand how their strategies affect local cultures. Sellers must understand the ways that consumers in different countries think about and use certain products before planning a marketing program.

There are often surprises. For example, the average French man uses almost twice as many cosmetics and grooming aids as his wife. The Germans and the French eat more packaged, branded spaghetti than Italians do. Some 49 percent of Shines eat on the way to work. Most American women let down their hair and take off makeup at bedtime, whereas 15 percent of Chinese women style their hair at bedtime and 11 percent put on makeup. Business norms and behaviors also vary from country to country. For example, American executives like to get right down to business and engage in fast and tough ace-to-face bargaining. However, Japanese and other Asian business people often find this behavior offensive.

Underdeveloped distribution systems in emerging The second challenge is underdeveloped distribution systems in emerging markets, particularly Asia. In order to maintain cost leadership in the market, internal production efficiencies must be greater than that of competitors. Under Kike's global strategy, suppliers are usually located in low-cost nations, with close proximity to raw-materials and reliable access to distribution channels.

These suppliers produce giggly standardize products intended for the global market, which size provides the firm with the opportunity to take the advantage of economies of scale factors. Kike's role is not only to globally integrate operations and centrally design products, but also to find and effective combination of low-cost, standardization, technology, and quality structure (Kettle, P. ; Armstrong,

G. 2014). An international company must take a whole channel view of the problem of distributing products to final consumers. The whole-channel view takes into account the entire global supply chain and marketing channel.

It recognizes that to complete well internationally, the company must effectively design and manage an entire global value delivery network. In India, millions of retailers operate tiny shops or sell in open markets (Kettle, P. ; Armstrong, G. 2014).