IKEA Brand Scorecard Final Essay

IKEA Brand Scorecard Final Essay.

Introduction

The brandscore card is an essential element used to evaluate the overall equity of a brand. The scorecard is an effective way to asses the unmet needs of the brands customers, it enables the brand to stay relevant and effective in the marketplace in a methodological manner. The scorecard should be able to fill any gaps that have developed within the brand’s approach to management and its strategic direction, as well as developing and maintaining a functional management system that can grow as the brand grows, while remaining comprehensive and completely brand relevant.

(Kaplan and Norton, n.d.) In terms of evaluating the current situation of a brand, a brand scorecard enforces a successful management plan by directly addressing what is at the core of the brand. It allows for the brand managers to objectively rate their brand against their own set of standards, based on their strategy.

Brand Planning

1 IKEA’s Mission & Vision
In order to create a viable scorecard to measure against the IKEA Brand against, it is important to define exactly what the vision and the mission of the IKEA Brand is and if they honour their vision and mission.

According to IKEA’s business concept , “At IKEA our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”(Ikea.com, 2014). From their own definition of what their vision is it can be said that they aim to vastly improve the quality of the lives of people who are in a lower income bracket, whilst still maintaining a certain level of product superiority and status. The IKEA brands vision is to use the concepts of conservation and minimalism to their full potential, by focusing on the effectiveness of simplicity and the functionality of each product rather then purely the aesthetical components.

The price of each IKEA product makes a large part of what their brand vision entails, “Low prices are the cornerstone of the IKEA vision”(Ikea.com, 2014). By using their low prices as the foundation of their brands vision, Ikea fulfils a widespread and need for product availability.

2 Potential Goals
In line with the Ikea vision there will always be consumers in need of their products. By following their current goals such as:

Keeping prices low – at design phase, there are strict product requirements which need to be met in terms of function, efficient distribution, quality and impact on the environment.

A certain level of quality is always maintained – by using effective negotiation skills and carrying out rigorous quality control evaluations on their materials.

Awareness and measurement of their brand environmental impact – Ikea are transparent in their approach to choosing suppliers and using sustainable materials that can be recycled and renewed as well as monitoring and controlling a high standard of their social and working conditions.

Consumer friendly product – throughout the supply chain, Ikea is true to their environmentally friendly approach from raw materials all the way to the end user.

Reduce carbon emissions – IKEA gave 9000 bycicles to their employees as well as subsidized their employees’ fairs to work. This increases healthy living for their employees and reduces carbon emissions. They also designed their water cans to stack on top of each other neatly, reducing the amount of trips it would take to transport them to the stores.

Maintain existing stakeholder relationships – Ikeas ensures that the communication lines between suppliers, manufacturers and of their stakeholders are clear and concise according to both their vision and mission.

In order to access the potential goals of the Ikea Brand, it is necessary to consider the following statement “It’s not difficult to manufacture expensive fine furniture: just spend the money and let the customers pay. To manufacture beautiful, durable furniture at low prices is not so easy – it requires a different approach. It is all about finding simple solutions and saving on every method, process or approach adopted – but not on ideas.” (Ikea.com, 2014).

We have identified two potential goals for Ikea:
Simplistic Assembly Process – their assembling instructions are crafted so that consumer can easily interpret the instructions in a straightforward manor resulting in easy product assembly.

Bettering current environmental impact – ensuring that they maintain their current best practice with specific reference to their means of distribution and manufacturing, by making sure that they are highly aware of the environmental impact of the resulting increased traffic that may occur from erecting stores.

3 Corporate Objectives
To produce cheap and affordable product for the public and their customers To provide a better life for those who cannot afford expensive products To ensure that their customers find what they are looking for in their stores. To provide low prices without compromising on quality

4 Situational Analysis
4.1 Macro:
Economical – High profits, high growth and good profit margins has contributed to the retail market.

Social – IKEA have formed partnerships with WWF and UNICEF in order to educate others to be aware of child labor and destroying forests.

Technological –IKEA have use excellent recycling methods and also encourage their stakeholders to use technology to their advantage in terms of efficiency.

Environmental – IKEA have implemented regular measurement tools and inspection to monitor all noise, water, air pollution such as the “E-Wheel” (IKEA, the Times 100)

Legal – IKEA has in store terms and conditions and abide by industry best practice in the suppliers that they choose to work with and the standards that they demand on manufacturers in terms of the law.

1.2. Market
The market – 43 manufacturing units in 12 countries. The Chinese market has almost doubled due to large urbanization needs. (Li Fangfang, China Daily USA, 29 August 2013). IKEA has almost 300 stores in 36 countries and 42 distribution centres in 18 countries and over 1000 suppliers. (National Geographic, 2013, n.d)

Competitors – IKEA’s main competitors are:
Wal-Mart Stores, Ashley furniture industries, Howden joinery group.

IKEA have the competitive advantage because they have researched where to find the best resources, they have developed the latest technologies in manufacturing, they have encouraged their suppliers to use the latest in research and development and the have built sustainable relationships with their stakeholders.

Consumers – IKEA has a wide spread target market as they have such a vast variety of products that are trendy and extremely affordable. It appeals to those wanting the latest styles but also to the market that cannot afford costly furniture.

Location – IKEAS stores are generally located just outside of the main town
due to their stores being so large.

4.3 Micro – SWOT Analysis
Strengths:
Powerful Brand Image
Wide range of products & Styles
Funky up & up-to-date Swedish designs
Cheap & Affordable
Able to assemble your own furniture
One stop shop
Friendly atmosphere and layout of their stores
They have restaurants and day care
Strong global sourcing
Weaknesses:
Assembling furniture yourself may not appeal to certain clusters of consumers
Not too many stores across the globe
For those looking for a quick shopping experience, the store might be unappealing IKEA Swedish designs could limit their target market
Quality of furniture is not built to be life long
Opportunities
Untapped Markets (Africa)
Make consumers more aware of IKEA
Open high end stores or smaller express stores
Create more online store presence
Threats
Increasingly competitive pricing
Social trends such as a slow down in first time home owner buyers Economic factors such as less spending power due to recession effects

5 Key Issues

Quality of Products – some products may vary in quality from country to country. Things such as a countries standards for manufacturing may not be as high compared to another country and therefore the end product could be different. Size of organisation – if there are any changes implemented to IKEA’s strategy or operations, it is difficult to roll out to their entire organisation as they are so massive. Differentiation – with the current economic climate, many furniture stores are producing low cost furniture but may not have the same sustainable values as IKEA. This makes it challenging for IKEA to keep their costs low as well as try and differentiate themselves from their competitors. Spending Power – The economic recession has hit consumers hard and therefore they have less spending power which has lowered expenditure on goods such as furniture.

6 Assumptions

The Ikea brand assumptions are based upon their established and successful financial revenues: The Brand has remained current, both socially and culturally. The brand is empathetic and touches the consumers on an emotional level. There is a considered environmental plan that the brand is aware of in all of its practises. The brand focuses on upholding ethical business practises, it is transparent.

7 Segmentation, targeting and Positioning

IKEA targets young and fashionable people as its main consumers; in particular those love modern furniture and accessories. Therefore, its products are more colourful and novel. In addition, IKE fixes the products’ prices at a lower level, which is quite attracting for the average consumers, such as white-collars. IKEA mainly target the younger market who like innovative products.

8 Brand objectives

To increase market share in news segments such as Africa, Asia and South America. The benefits of this would be increased profits, brand awareness and increased market share. Reduce costs to appeal more to their intended target market in order to increase market share. One way in which IKEA are trying to cut costs is by

9 Strategies and plans

IKEA plans €1.5bn investment in wind and solar energy through to 2015 as part of new sustainability strategy in order to be completely independent from using energy and resources. This will protect their consumer from price spikes and their own organization from fluctuating resource and energy prices. IKEA plan to become an energy exporter with their renewable energy. IKEA has dedicated and committed themselves to making sure that delivery trucks are at least 60 to 70 per cent full. They will replace 1.2 million light sources in stores with low energy consumption LEDs, as well as only sell LED lights in their stores from 2016. (Will Nichols, BusinessGreen, part of the Guardian Environment Network theguardian.com, Tuesday 23 October 2012)

10 Communication Objectives

To develop better communication and integration strategies so that IKEA has the same brand quality through their organisation internationally.

11 Task Budget

The Ikea brand focuses on their project management, employee management and their resource management processes by directing all employees in a positive manner, “IKEA co-workers enjoy many advantages and opportunities from working in such a free and open environment – but all freedoms are counter-balanced with expectations. For example, the expectation that each co-worker is able to assume responsibility for his or her own actions. Although on the surface it is evident that we have a lot of fun together working at IKEA, at the same time all are expected to be very hardworking and conscientious. Here are some more examples to illustrate give and take, IKEA style.” (Ikea.com, 2014)

By ensuring this positive management style they are able to entrust their business objectives to the right employees. Each task is managed and set according to specific and expected outcomes. The tasks and objectives can be achieved through their smart brand management and budgeting correctly.

1 –

The IKEA brand makes a point of acknowledging its brand history and the various ways that it has left a brand footprint within its brand environment. There are however inconsistencies between what the employees think of the brand and what the consumers think of the brand. It can be recommended that the employee engagement efforts transcends into the appropriate marketing strategies targeted to the consumer. By doing so there will be a far more holistic brand perception.

2-
The IKEA brand is targeted at a lower income bracket and it does this successfully by continuously seeking to source affordable and quality suppliers. The importance of continuously having their correct target market in mind is always a census thought in the mind of the brand managers.

3-
The IKEA brand strictly sticks to their current corporate identity, all the brand collateral is consistent, they make a point of doing all marketing on an international level. However they must be couscous of their various contact points ( mainly at the smaller branches) as these are sometimes overlooked.

4 –
IKEA is able to deliver a consistent product, there are various return policies in place that allows the consumer the ability to deal with any product issues in a simply and easy manner.

5 –
IKEA is responsible towards all its stakeholders, it maintains the relationships by using proactive objectives to direct all of its future interactions. The brand can improve its equity by reinforcing the current brand image internally, engaging with all the levels of employees.

6 –
IKEA offers products that are appropriate to their brand visions, they better the lives of the consumers.

7 –
IKEA offers various and innovation products. The brand should continue with their irreverent approach to innovation.

8 –
IKEA has a pricing strategy that is unarguably inline with their brand identity. The pricing strategy has set a ideal brand expectation to the IKEA consumer, It is however of utmost importance that IKEA is alway consistent in terms of pricing.

9 –
IKEA is aware of and involved with every product that they product, each is treated as potential development and there is no apparent product hierarchy.

10 –
The IKEA brand is a green focused brand throughout its entire supply chain, it upholds a impeccable environmental process. However there is room for improvement within their distribution sector.

References

Businesscasestudies.co.uk, (2014). Introduction – Building a sustainable supply chain – IKEA | IKEA case studies and information | Business Case Studies. [online] Available at: http://businesscasestudies.co.uk/ikea/building-a-sustainable-supply-chain/introduction.html#axzz3BWC79qBb [Accessed 24 Aug. 2014]. Ikea.com, (2014). Our business idea – IKEA. [online] Available at:
http://www.ikea.com/ms/en_SG/about_ikea/our_business_idea/index.html [Accessed 24 Aug. 2014]. Ikea.com, (2014). Our low prices – IKEA. [online] Available at: http://www.ikea.com/ms/en_SG/about_ikea/the_ikea_way/our_business_idea/our_low_prices.html [Accessed 25 Aug. 2014]. Kaplan, R. and Norton, D. (n.d.). The balanced scorecard. 1st ed. http://www.ukessays.com/essays/marketing/the-critical-issues-faced-by-ikea-marketing-essay.php Will Nichols for BusinessGreen, part of the Guardian Environment Network theguardian.com, Tuesday 23 October 2012 http://usa.chinadaily.com.cn/business/2013-08/29/content_16929111.htm http://money.howstuffworks.com/ikea4.htm

(National Geographic, 2013, n.d, http://www.natgeotv.com/ca/megafactories/ikea-facts) Essays, UK. (November 2013). An Analysis Of Market Segmentation Of Ikea And Bandq Marketing Essay. Retrieved from http://www.ukessays.com/essays/marketing/an-analysis-of-market-segmentation-of-ikea-and-bandq-marketing-essay.php?cref=1 Essays, UK. (November 2013). Competitive Advantage And Problems Faced By Ikea Marketing Essay. Retrieved from http://www.ukessays.com/essays/marketing/competitive-advantage-and-problems-faced-by-ikea-marketing-essay.php?cref=1

IKEA Brand Scorecard Final Essay

Scharffen Berger Chocolate Maker Essay

Scharffen Berger Chocolate Maker Essay.

1. Describe the brand position of Scharffen Berger. How does the current production process contribute to that brand?

a. Scharffen Berger Chocolate’s value position is “producing chocolate of the highest quality possible with the finest cacao possible.” It is a premium priced product with strong brand recognition.

b. The company’s use traditional artisan production method allows it to differentiate itself from competitors by being one of only a few brands that produces chocolates “from beans to bars.” It has strict regulations on quality control of products produced both in-house and via 3rd partners.

Using human tasters, such as controllers and a blind taste testing at the end of the process, removes a certain percentage of errors that may be made via a machine-only testing process. Scharffen Berger also strives to minimize machine errors via a twice/month calibration procedure protocol. This close regulation of quality allows the company to ensure a high percent of high quality only products are shelved.

2. What is the current capacity of the process? What is the current bottleneck?

a. Current Capacity of the Process is 40,600 kg/month
b. The current bottleneck resource is the conche, which limit the production quantity since each has the lowest resource capacity (1353 kg/day) within the process.

3. What are your conclusions regarding the proposed ball mill? What are the benefits? What are the risks? As Jim Harris, would you proceed with the implementation of that change? How would you do so?

a. While the Ball Mill has the potential to increase capacity production by
10.4%, the Mixer resource will become the new bottleneck in the process. b. Benefits:
i. Reduce Conching flow time (60hrs to 15hrs)
ii. Increased Revenue
c. Risks:
i. Risk not being able to have a high return on capital investment (Cost of Purchase – $300,000)
ii. Training employees/3rd party partners on new machine
iii. Diminished quality if not properly cleaned
iv. Actual Revenue lower than forecasted if machine is not properly integrated into system

4. Assuming all the production is of semi-sweet (62%) chocolate, what changes beyond the addition of the ball mill will you need to consider to increase your capacity by 150% (to 250% of current capacity, where “current” means before the installation of the ball mill.)?

5. Take the role of Jim Harris, COO of Scharffen Berger. The purchase of the ball machine will not alone allow Scharffen Berger to expand capacity 150%. It will require expanding most of the other steps in the process except the first, Bean Cleaning, by either adding shifts and using the current equipment, by adding and equipment and staff to the current shifts, or by outsourcing some of the steps. As Jim, you know that maintaining the quality of the process is key to maintaining Scharffen Berger’s brand position. Prepare a recommendation for the owners, Robert Steinberg and John Scharffenberger, on how Scharffen Berger should expand its operation to meet this increased demand, maintain quality, keep costs low, and position it for possible future expansion.

Scharffen Berger Chocolate Maker Essay

Boston Beer Company Case Essay

Boston Beer Company Case Essay.

_Background Information_: The Boston Beer Company, which was founded in 1984, had a very diversified thriving product line which entailed about twenty different kinds of beers. Their product was available in over nineteen various countries and used a network of around four hundred distributors. Revenues grew from 21 million dollars to 210 million dollars from inception to 1997.

_Problem and Opportunity Identification_: As a result of the company’s product line and its variety, the company encountered issues sustaining and upholding of their products such as Lightship – which has been withering in recent years and which doesn’t have the volume like other products to sustain distribution.

Since the light beer business that Lightship belonged to was one that was rapidly growing, the Boston Beer Company felt the need to investigate its products disappointment. The research to do so took place in different forms such as competition, market, and financial analyses, customer surveys, and finally deep emotional analysis using the ZMET technique.

_Alternatives_: One option the research team is considering is introducing a new light beer into their product line.

It is understandable that since the high-priced light beer industry is one of the biggest and rapidly growing field in the beer industry, the Boston Beer Company wants to occupy and take advantage of this field to further enhance its name and maintain its market share and its standing. However, there are issues in terms of positioning and marketing of this product. The product needs to be communicated as a light, rich, fun beer and targeted at a different audience that entails women. In addition to the fact that this option might cause conflict in terms of the brand image being a macho rough beer brewer, using it doesn’t solve the problem for Lightship if Lightship is going to be kept in the market offerings.

Another option the research team considered was repositioning Lightship and throwing in more effort and investment into the marketing of the product. It was obvious that, compared to one of their biggest competitors Heineken, the Boston Beer Company has had trouble and sort-of failed to build a unique brand identity for this product. The product was not successfully differentiated and positioned in the market in order for it to build market share and improve standings. This failure could make it difficult for the company to reposition itself and change consumer perceptions to gain their interests and so it might be a waste of time and efforts.

Finally, the last option is the dreaded one of not competing in this realm of the industry. This is a very extreme option since this realm is a huge and growing segment of the market and they would be missing out on a lot if they decide to pull out it. The failure to fit into this field, however, might have proved that the Boston Beer Company is not competent enough and ready to compete in this segment.

_Critical Issues_: There are two main critical issues that the company should consider when making the decision about their situation in the light beer industry. One critical issue concerns the brand image – the company has an umbrella brand image of being a premium masculine macho craft beer brewer and shaking that could be seen to influence consumer perceptions. The second critical issue relates to the field study and the results it yielded – do they answer our questions about how to position the light beer product or on whether we should even introduce/keep products in this segment of the market.

_Conclusion and Recommendation_: After reviewing the results of the various research techniques, the recommended option would be to introduce a new high-end light beer into the market (while probably retiring Lightship). Making use of the ZMET research results, this new product should be positioned in a manner that represents an active, refreshing, and healthy lifestyle. Having a new product instead of improving Lightship is best in order to avoid the difficult efforts of having to change stubborn consumer perceptions. Also, in terms of the umbrella brand image of BBC being a macho tough image, having a separate offering targeted at other audiences will probably add to the image of having two instead of eroding the existing image.

Boston Beer Company Case Essay

Starbucks’ cultural adaptation in International Operations Essay

Starbucks’ cultural adaptation in International Operations Essay.

Starbucks has become one of the most recognised brand in the world, known for selling highest quality coffee products. The company discovered that there was a potential in beverage retailing and today operates 8337 stores worldwide. The founder, Howard Schultz started in Seattle with a concept of high quality product in a relaxed atmosphere. But a new market is always a new challenge and carries an amount of risk for a company.

This assignment is going to analyse the company’s international expansion through local culture and guidance notes will be given.

Starbucks international strategy was to develop the brand and its strengths in a variety of countries. In 1996, the first country “invaded” was Japan, and even though there was a 1000 years tea history, the company successfully managed to grab customer’s attention to a new concept.

The strengths from the American market were exported worldwide, to give an image of a product that suits everyone. But the operation strategies differed; Starbucks decided to operate through a number of joint ventures and licensing arrangements with prominent retailers to gain an easier access to new markets and dominate it, before moving further to new potential markets (differing from American approach where the stores are largely company-owned).

The reason was that when entering a new market, major factors where important such as the local competition and issues related to price and cost. Starbucks had to conform itself to the economic scale already present in specific market and result to a cost disadvantage (resulting in production, marketing, research and development constraints), consequently the company acquired in 1998 the Seattle Coffee Company in the UK to access a new market easily. The idea is that an experienced local partner can help identify locations, sift through tax issues and give Starbucks stores more community appeal.

Starbucks understood their brand image was going to be a major selling point and when entering a new market, their goal was to introduce their diverse product line while at the same time acquiring a large portion of market share through the creation of customer loyalty and a “special” relationship (offering the added value of venues with a cosy feeling and good atmosphere where guests can relax while sipping their favourite Starbucks coffee). Starbucks understood that by creating customer fidelity, consumers would not mind paying extra money for a cup of coffee.

But problems arose when the company faced local competition such as stores offering coffee stands with them (e.g. Borders), regional speciality coffee companies (e.g. Costa and Coffee republic in England), espresso stands and whole-bean coffee sales.

Starbucks endured fierce competition in Japan such as Doutor Coffee Company and the Pronto Corporation which are well established chains. Furthermore, their access to local culture was done through partnership and the profits were reduced (share of 20% instead of 50%).

On the other hand, Starbucks understood that they had a competitive advantage over local chains, with the ability to access raw materials of high quality and employee/ employer relationship with a belief that a satisfied employee contributes a great deal in a successful company. Furthermore, the company’s mission statement established by Howard Schultz states that employees should treat each other with respect and dignity, while working in a great environment. The company also stated that it embraces diversity and contributes to local communities and environment .

Those values helped the company to sell a part of the “American Life” and a new luxury notion of coffee retailing to customers (while they cannot afford a luxury car, they can still afford a luxury coffee) with the obstacle that in poor countries people will prepare coffee at home rather than buy it on their way to work.

The target in Europe is the young generation because they see Starbucks on television and movies and think it is “cool”. As a result the company opened stores in strategic areas where young people spend their time (in Berlin or in Paris’ Montmartre).

Even though Starbucks has a policy of fair trade and ethical responsibilities, problems arose in countries with cultural differences and in politically unstable countries. Starbucks in a joint venture with an Israeli company (Delek group) closed its six stores in Tel- Aviv last year amid continuing conflict between Israelis and Palestinians and market challenges.

Starbucks wants to be as well known as Coca-Cola in the whole world and this implies the image that goes with it (“Our passion transcends language and culture” ). Following a “We are the Champions!” strategy can be very risky and the company can increase its vulnerability, while trying to have a broad attractiveness. U.S war in Iraq opposition created a boycott of the company in Lebanon and the current trend toward anti-Americanism and anti-globalisation damages Starbucks reputation through an impact on corporate image, losses in brand equity, Internet propaganda, NGO activity towards the company and negative brand associations. Furthermore, the company’s financial results can be touched as well with drop in sales; costs caused by local activism and sunk costs in the case of a pull out.

Starbucks brand is already well established in the International market. To conserve market share, Starbucks needs an increased local dimension which will be linked to local store opening and will be able to decrease the local resistance from communities.

Furthermore, the image of capitalism and push methods that Starbucks used (such as in China) won’t be sustainable in the long-term. Starbucks should promote an international image for its products, as they represent a new trend in coffee culture, while maintaining a diversification of products that are adapted to local communities.

Starbucks should provide a special drink based on taste, preferences, style, design and name o the coffee.

This solution can attract new customers and can be linked with a specific marketing campaign that finds a balance between the global image and the local community. Even though differentiation can be risky, an emphasis on new experience will be necessary in the long run to escape competition (e.g. the introduction of music bars in Europe) and project to the world that they are well aware of the existence of other countries cultural preferences and tastes.

Negative overall press coverage was partly the result of United States policy and Starbucks should try to “escape” from the political aspect by promoting itself as an international company rather than a US company. Separating themselves from the American image can be a danger, but they will have a more local image, by introducing local culture in their stores (e.g. local newspaper). In addition, Starbucks should demand fair prices from organic coffee farms and contribute to charitable causes to appease anti- globalists.

Additionally, politically unstable countries should affect their decision to enter new markets. A test-store should be opened to try whether the local perception of citizens can be changed and if local government support the company.

Starbucks should continue to buy “fair trade” (grown and marketed under certain economic and social conditions) coffee beans as it enhances its social responsibility worldwide and give an image of tolerance.

Furthermore, loss making stores should be closed (as previously done with joint-ventures in Switzerland and Austria) and when expanding, cultural differences need to be taken into account. Price setting as to currency fluctuations (American dollar being very low) is very important to be able to maintain the worldwide demand and maintaining customer loyalty (they currently use a method called Currency risk management to manage the currency fluctuations in different countries).

Furthermore, one of the main problems faced was competition and Starbucks need to be careful that prices do reflect the global trend. At the moment, people are willing to pay that extra more for the brand and Starbucks should keep it that way, decreasing feelings that they overcharge their customers.

A solution can be for the company to open subsidiaries or base their company in countries where they have a lot of stores, resulting in generated profit for the subsidiary and thus basing the price on an individual country.

It is important for Starbucks to further develop its global image, bearing in mind that change in taste will occur and a remodelling of the image may be necessary.

Still, Starbucks will need to remain focused on where the company is good at, such as being the best coffee provider and offering a good atmosphere. Starbucks should expand on the basis that they are selling superior quality coffee on the taste and preferences of the world, not only the United States preferences.

Customer loyalty is very important, and while trying to expand internationally, high customer service should remain. Some of the methods used in America were proven to be successful and the World market may benefit from some features. An example can be direct-to-customers method of selling products through internet to support its retail expansion into new markets and reinforce brand recognition in existing markets.

Starbucks’ cultural adaptation in International Operations Essay