edwige ravry, peggy nicod, marine jubé, dimitri cournède, alexandre krouglikoff ikea best in...
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Edwige Ravry, Peggy Nicod, Marine Jubé, Dimitri Cournède, Alexandre Krouglikoff
IKEA
Best in France Case studyMarch 19th, 2004
IKEA IKEA is a furniture retailer (it started in Sweden in 1943)
IKEA came to France in 1981
- It opened 2 shops to test the market in Bobigny and Vaux en Velun.
- Its first real-scale shop was opened in 1983 in Evry.
IKEA’S KEY FIGURES. World sales : 11.3 billion €.
IKEA France : n°3 on the French market (7.3%)
4500 employees
14 shops
Total revenue : 943 M € (+6.6%)
24 M visitors/yr
WHY IKEA CAME TO FRANCE
North to South expansion starting in Scandinavia.
Huge French market. Increase economies of scale. France’s central position in Europe.
COMPANY VALUES:
Most values come from the founder, Ingvar Kamprad: Simplicity
Modesty
Honesty
Economical approach to business
Respect for the environment
HOW ARE THESE VALUES INSTILLED ?
Few efforts to make:IKEA’s corporate culture is easy to relate to. Recruitment policy : prefer young people and
original backgrounds.
2-day seminar (the « IKEA way ») to make employees more familiar with the Company.
IKEA’S CLIENTS:
Age group: 20 to 45
years old (especially 25/35).
Customer profile: Qualified, working couples and executives, living in urban areas.
IKEA’S CUSTOMERS’ EXPECTATIONS
The products must be :
Affordable
Convenient
Varied and creative
Environment friendly
ADAPTATION TO FRANCE
Although the main trends are fixed by the « Board », each national head-office is free to implement them as it wishes.
Nowadays, IKEA’s designers
also get their inspiration from
other countries than Sweden. The colour range for each product changes
from one country to the other.
EXPECTED CONSTRAINTS
Fear that the French would be chauvinistic and not buy IKEA’s products.
Fear of social conflicts and civil service inefficiency.
Fear that the market would be saturated (BUT, Fly…).
STAFF CONSTRAINTS:
Social security charges. Harsh social legislation. 35 hour working week. Trade unions.
CSQ: high costs.
BUREAUCRACY:
Civil service inefficiency.
Huge amount of paperwork.
MARKET CONSTRAINTS:
Highly competitive segment of the market (BUT, Fly…)
No market growth since IKEA arrived in France.
AS A RESULT …
Tough financial constraints : the breakeven threshold is increasing.
IKEA does not expand in France as much as it would like to.
EVOLUTION OF THE NUMBER OF STORES
Sweden
0
5
10
15
20
1964 1974 1984 1994 2004
Years
Nu
mb
er
of
sto
res
France
0
5
10
15
20
1964 1974 1984 1994 2004
Years
Nu
mb
er
of
sto
res
EVOLUTION OF THE NUMBER OF STORES
Great Britain
02468101214161820
1964 1974 1984 1994 2004
Years
Nu
mb
er
of
sto
res
Germany
0
5
10
15
20
25
30
35
1974 1984 1994 2004
Years
Nu
mb
er
of
sto
res
LOCATION BENEFITS:
Well-developed transport and communication network.
Central position in Europe.
Quality of life (eg. Good health service).
MARKET BENEFITS:
Market potential: Almost 60 million inhabitants (high purchasing power, 70% pop. In urban areas).
French customers turn out
to be open to new products.
WORKFORCE BENEFITS:
The high level of social
security charges significantly
reduces the turnover.
As a consequence the French staff is, on average, competent and serious compared to other countries.
Advice to companies settling in France
Be careful to hire the right person:
laying-off is costly (financially and legally)
Find a good accountant and specialist in french labour legislation
Advice to French Government
Insure competitiveness of company contributions
Review labour legislation
Review trade union system
WE THANK
M. DUBRANA, directeur marketing opérationnel
M. PIVET, directeur des ressources humaines
M. DANIELSON, directeur financier
OUR TEAM Dimitri COURNEDE45 chemin de Grézes
81000 Albi.
Marine JUBE108 ch. des Communaux
38 190 Bernin.
Alexandre KROUGLIKOFFLes Cèdres 21
55 bvd de Charonne
75011 Paris.
Peggy NICOD6 rue Mesnil
75116 Paris.
Edwige RAVRY9 imp. Des Bouvreuils
78112 Fourqueux.