Group 5 MA1N0222 Buyka MA0N0245 Antonio MA1N0204 Jobjab

History

 Is a Swedish furniture company, foundend in Almuhult, 1943 by Ingvar Kamprad.  Is one of the world's top retailers of furniture.  home furnishings, and housewares.  The company designs its own items, and sells them in the more than 140 IKEA stores that are spread throughout approximately 30 different countries worldwide.  The company also peddles its merchandise through mail-order, distributing its thick catalogs once a year in the areas surrounding its store locations.  IKEA is characterized by its efforts to offer high-quality items at low prices.  To save money for itself and its customers, the company buys items in bulk, ships and stores items unassembled using flat packaging, and has customers assemble many items on their own at home. The company is owned by founder Ingvar Kamprad's Netherlands-based charitable foundation, Ingka Holding B.V.

Features

 More important than the physical characteristics of the new IKEA store was the manner in which it revolutionized furniture manufacturing and selling. Kamprad continued the practice of selling most furniture in flat-pack form, as he said, "to avoid transporting and storing air." To make this possible, the furniture was specially designed by IKEA staff in workshops in the Älmhult headquarters and warehouse. For the mass production of the component parts of the flat-pack furniture, Kamprad had to bypass traditional furniture manufacturers and instead use specialist factories.

 Unfinished pine shelving, for example, came directly from saw mills, cabinet doors were made in door factories, metal frames came from machine shops, and upholstery materials came directly from textile mills. Almost all of the components of each piece of furniture could be put together by the customers themselves, but in some cases IKEA staff could help the customer assemble the furniture at home. IKEA's innovations ranged from table legs which fixed into place with snap locks, to kitchen chairs that were assembled with one screw. A large number of IKEA products carried the label of the Swedish Furniture Research Institute, a byword for good quality and design.

 Almost all of the components of each piece of furniture could be put together by the customers themselves, but in some cases IKEA staff could help the customer assemble the furniture at home. IKEA's innovations ranged from table legs which fixed into place with snap locks, to kitchen chairs that were assembled with one screw.

Traditional Furniture Industry Value Chain VS IKEA’s Reconfigured Value Chain

History

 ProFlowers, one of the nation's largest online fresh flower retailers and a Provide Commerce brand, launched in 1998 to sell and deliver fresh cut flowers for everyday and special occasions such as Valentine's Day, Easter, Mother's Day, birthday and anniversary events. The company's market platform combines an online storefront, proprietary supply chain management technology and established grower relationships that bypass traditional floral supply chains of wholesalers, distributors and retailers.

 ProFlowers turned to FedEx to help it deliver arrangements directly to customers from the grower. Those customers' orders get picked, arranged and packed for shipment right on the spot, with the help of FedEx technology installed on-site at the farms and greenhouses.

 Direct-to-consumer business models are an increasing trend. Companies like ProFlowers give their customers not only a fresher product but also better prices.

Traditional Flower Industry Value Chain VS ProFlower’s Reconfigured Value Chain

Questions

Question 1  At the beginning of this chapter, the statement is made that “ in everyday language, a model is a plan that’s used to make or describe something.” Do you think IKEA and ProFlowers have plans that effectively describe what the firms offer to customers? How could these firm’s models be changed so that they would be more appealing ?

 They have plans which mean good business models.  Both of them have effective value chain that creates substantial cost savings  Also they make some unique offerings to their customers  IKEA – Brightly colored furniture, functional yet stylish products, playrooms for children, Swedish cuisine restaurants  ProFlowers – fresh flowers, higher quality, lower price

Question 2  What is IKEA’s core competency? What are its strategic assets? Is there anything about IKEA’s business model that makes what the company is doing hard to replicate? Explain your answer.

 IKEA’s core competency is the outsourcing service. They have saved a lot of cost by using it.  IKEA’s strategic assets are  Well-designed Products  Value chain  Customers relationship management  Stores with best locations  Company’s business model is not bad, IKEA offers special customer service that means You can do it yourself, but you don’t have to!  But the model is getting older

Suppose that you are the CEO of ProFlowers. You just received an from Carolyn Anderson, a highly reputable and sought-after rose grower, who is interested in learning more about your company. In her message to you, Anderson asks the following question: “Describe to me your business model. Convince me that your organization has a good story and I should be part of it.” How would you respond to this request? Question 3

Business Model of ProFlowers

ProFlower’s business model provide maximum emotional perspective to the customer by have small chain of distribution from growers to customers. For all the rose growers that collaborate with ProFlower will send flowers to customers through a single channel such as FedEx or UPS. By having Carolyn Anderson mean flower’s distribution can be enhanced. As the process is bound to increase rose demands, being a part of the uniquely defined ProFlower chain would be advantageous for you.

How does ProFlower’s business model motivate its customers and partners (such as its contract growers) to participate in its business? On a scale of 1 to 10 (10 is high), rate how motivated you think each group is to do business with ProFlower and help it succeed. How does ProFlower’s business model demonstrate that in some instances fewer business partners can be better than more business partners? Question 4

ProFlowers business model motivates  The customer will give regard to their emotional attachments with the people whom they wish to address by sending high quality flowers but low price.  The receivers allow to have fresher flowers.  While growers will receive significant benefit through improved profitability. For flower’s grower motivates rate : 8 For ProFlower’s customer motivates rate : 9

Fewer business model partners would be easy for ProFlower to motivates as well as it would take lesser time for fewer business partners to concentrate more on their collaboration with ProFlowers.

Application Questions Which Industries, other than furniture and flowers, are ripe for business model innovation?

1. IT Industry Multimedia Industry -Music (BeatPort.com, I-tunes.com, Amazon.com, Soundcloud.com) Radio (Digital Imported: di.fm). -Movies (Netflix.com, Directv.com, VUDU.com, Quickflix.com.au). -Games (Smartphone apps, Free to play online games). -Social Netorks (Fb, Twitter) Restaurants (Online ordering) (Pizza Hut Online). Internet (Wi-fi Technology). Warehouses (Kiva Warehouse Robotics)

Provide an example of a product or a service with a value chain that could be reconfigured in a manner similar to the way IKEA reconfigured the value chain of the furniture industry or ProFlowers reconfigured the value chain of the flower industry. Discuss how a start-up or an industry incumbent could benefit by reconfiguring its industry’s value chain in this manner.

The example: Walmart (RFID; Radio Frequency IDentification Technology) At Wal-Mart, a reduction in out-of stock incidents could mean a boost in the closely watched measure of same-store sales. RFID technology is also supposed to help make the company more efficient in its supply chain.

2. Why do you think IKEA hasn’t grown more rapidly? Think about IKEAS’s business model in formulating your answer.

-Their target is very specific (Those who doesn’t mind assembling the furniture by their own). -No transport service.