Examine the distinguishing features of HRM In A Developing country( Assignment - 1

Examine the distinguishing features of HRM In A Developing country( Australia) - Assignment Example According to (Technology Evaluation,2011)â€Å"The knowledge base on human resources management systems affords clients the opportunity to rapidly determine their criteria for management and employee personnel tasks. Its extensive criteria include benefits and payroll management, employee self service, data warehousing, and health and safety requirements†. Human resource management has various features and functions, which helps it to achieve its specific strategies and goals. Today the business world has vast numbers of large and International business organizations where human resource plays a vital role in its daily operation and systematic running. As per, Armstron(2002,pg.15) â€Å"Human resource strategy has two key elements: there must be strategic objective and there must be a plan of action which is to be met as a goal of the organization. The features and function of Human resource management is wide and varied, as it handles the whole issue related to In many developing countries the Human resource management is fully or partially established to aid the smooth functioning of big and international organizations .With the increasing influence of globalization, the demands of human resource management is heightening at great level , also is the need for improving the effectiveness of its staff. Tessema(2006.pg86-105)states that ,â€Å"As performance is a multi-faceted and complicated concept, HRM outcomes were used as mediating factors between HR practices and employee performance†. Human resource mainly deals with the functions of the employees in an organization and without this department the activities of a business fail. Human resource strategies are heart and soul to a developing nation as it helps in the upgrading of the economical status of the country. The human resources management department is the division which handles all the core activities related to the employees and their welfare. In the past decades , the globalization have

FMCG Industry In India Commerce Essay

FMCG Industry In India Commerce Essay India can boast of being the fourth largest Fast Moving Consumer Goods (FMCG) Sector globally (India Brand Equity Foundation, n. d., p. 2). The estimated size of the FMCG sector of India is Rs. 1,300 billion (Gnimoline, n. d.). It has shown further growth of about 11 percent in the recent times. However, the FMCG sector of India is not like that of the developed markets, which are only dominated by few major players. It is defragmented and comprised of large number of sellers who conduct business in both organized and unorganized markets. Among 12-13 million retail stores, about 9 million stores belong to the FMCG segment. The population of the country is over one billion, so it has a strong customer consisting of about 300 million middle class buyers. It is considered to be among the largest economies because of the large purchasing power of the people (Sharma, and Bakshi, 2012, p. 472-474). India is considered to be the fastest developing countries in the world now, so the disposable incomes of the people are increasing and even the standard of living of the rural people has gone through drastic change. The Indian FMCG market is flooded with goods and services and the consumers have access to innumerable products based on their needs and requirements. The major players in the FMCG sector of India are Britannia Industries, Dabur India, ITC, Nestle India, Palmolive, Marico Industries, Tata, Amul, and many more (Sharma, and Bakshi, 2012, p. 472-474). It was derived from a research that an average Indian spends around 40 percent of their income on products like grocery and about 8 percent on the personal care items, as can be seen in Figure 1 Figure Source: (India Brand Equity Foundation, n. d., p. 4) In order to understand the usage of ERP and its pros and cons in the supply chain of the FMCG sector, it is very important to first segregate the segments of the FMCG industry because the different companies selling diverse products utilize ERP based on their convince, business strategies and goals of the company. The major segments in the FMCG sector of India are household care, food and beverages, and personal care. There are few minor segments too. 1.2 India Competitiveness and Comparison with the World Markets Due to the diverse climatic condition and different landscapes, wide range of food processing companies has the opportunity to do business and generate revenue in India. India is regarded as the largest supplier of milk, livestock, coconut, cashew, spices, and sugarcane. It is also the second largest producer of vegetables, rice and wheat. The country also has ample supply of caustic soda, and the soda ash which is the raw materials required for the detergents and soaps. Tata Chemicals is the largest company in the world, which produces the synthetic soap ash. The Indian companies also have a significant presence in the global FMCG value chain, which ranges from raw materials to the finish and packed products. Amul is the most popular company in India which deals in dairy products. Apart from the advantage of having raw material in abundance, India also enjoys the huge resource of low-cost labour resource, among all the Asian countries, as can be seen in Figure 2. Figure Source: (India Brand Equity Foundation, n. d., p. 7) Two major resources are there in adequate amount in the country. Many multinational companies have set up factories or manufacturing units in India to minimize their cost of production. For example Unilever a global giant sources a huge part of their product requirements from the Indian subsidiary called Hindustan Lever Limited. Unilever has outsourced about US$218 million products from HLL, which are mainly the personal, home care, and food products. Even Procter and Gamble has outsourced an Indian company in Hyderabad to manufacture Vicks Vapourub, so that Procter Gamble can export them easily to Japan, Australia and the other Asian countries (India Brand Equity Foundation, n. d., p 9-10). India has always tried to compete in the world market and allowed internationals or multinationals to trade in the country. With this idea, the policies were developed to attain international competitiveness, such as by reducing the excise duties, lifting the restriction on the quantity, eco-friendly food law formulation, and by permitting the brand names of the foreign products in the country. 1.3 SWOT Analysis of the FMCG Industry in India According to Bohm (2009, p. 2) SWOT analysis is a strategic management tool which can be utilized to evaluate the strength, weakness, opportunity and threats of the supply chain of the Indian FMCG market. SWOT analysis can assist in designing an effective plan that would capitalize the opportunities, utilize the strengths, by neutralizing the threats and minimizing the effects of weaknesses. Strengths All the major brands around the world are present in the FMCG market due to the strong supply chain framework in India. Even the base of the raw materials in the country is adequate for the procession of food products industries. The raw materials for the agro-based industries are also available and this is because of the diverse climatic condition which supports the growth of different crops in different parts of the country. Apart from these things, the production cost, delivery cost and the labour cost is also low, so this acts as a major advantage for not only domestic manufacturers, but also for the international manufacturing companies (Soundarapandian, 2002, p. 50-54). A good aspect of the supply chain in India is that it is uniformly spread in the urban as well as the rural areas of the country (Krishnamacharyulu, 2011, p. 404). Technological advancement in every parts of the country is also reflected in the supply chain segment too. IT enabled supply chain has high demands i n the Asian markets, which also includes India. In India the FMCG countries provide ample assistance to the rural sector and the agricultural industry too. That is why increasing usage of technology in agriculture is seen these days (Ferrell, and Hartline, 2010, p. 122-124). Weaknesses The major weakness is the growing market of fake products of popular brands. The Me-too products are sold less that their duplicates in the rural markets and also in the semi-urban markets (Kashyap, and Raut, 2005, p. 150-151). Though the usage of technology is growing, yet the scope of investment on technology is still limited. The risk is high and companies are reluctant to take risk (Mukherjee, and Patel, 2005, p. 124). Moreover, the export level is also high due to the increasing level of competition in the market. Though the raw materials are getting cheaper, but the FMCG companies are raising the prices of the products, and due to the vast market size, companies have become more interested in earning profit and creating power brands. Opportunities The Indian FMCG industry now has many suppliers who have identified ways of decreasing their cost and have introduced innovative ideas to enhance and improve the supply chain. Efforts should be made by the Indian companies to improve the quality of the supply chain. The population of the domestic market in India is 1.2 billion. The growth possibilities of the Indian companies are immense especially in the rural areas, as about 12.2 percent population of the country stays in rural areas (Euromonitor International, 2008). Apart from this the increasing focus and initiatives of the government towards the FMCG companies also depicts a growth prospect for the companies. Globalization and liberalization has also opened fresh horizons for the FMCG companies of India. Healthy products such as eco-friendly goods are gaining popularity in the world market; similarly Indian FMCG market should also utilize their resources to cash such an opportunity. Threats The rural India includes 627,000 villages (IIM Ahmadabad, n. d.). So challenges are faced by the supply chain companies in distribution networks. Problems related to IT sourcing, professionals and procurement activities for involving more and more members in the supply network can also be faced. Moreover, lack of investments for the technological advancement, lower level of computer literacy, and low penetration of internet facilities in the rural areas. The complex framework of the supply chain in the country may also make the distribution of products difficult. 1.4 Supply Chain in FMCG Sector In order to succeed in the highly competitive markets, companies should align the supply chain along the market demand and serve accordingly. The performance of the supply chain provides an edge to the company over its competitors. Supply chain management involves the right co-ordination of location, production, transportation, inventory, and information. Indian FMCG industry is ranked as the fifth most eye-catching and budding markets in the world, in case of supply chain management practices. It has also been graded second in the GRDI (Global Retail Development Index), which included a comparative analysis of 30 different developing countries (Munjal, Kumar, and Narwal, 2011, p. 156-162). The Indian FMCG sector is characterized by the stiff competition between the unorganized and the organized sector, and also among the highly established intermediaries and distribution networks. Even a strong presence of the multinational companies can be seen in the value chain of the entire FMCG sector of India. Though the performance of this industry had been inconsistent during the phase of 2000-2003, and even the investors in this sector could not derive any profit, but in 2005 and so on, the FMCG sector has seen a demanding growth. Further, in the year 2006, the FMCG industry not increased the disposable income but also improved the economic health of the country. The FMCG sector has grown further by 60 percent till 2010. The rural segment and the middle class of the country are considered to be the most promising segment of buyers in India. This also gives the brand makers the opportunity to convert these FMCG products into brands (Munjal, Kumar, and Narwal, 2011, p. 156-162). 1.5 ERP (Enterprise Resource Planning) in Supply Chain Over many years the companies have started embracing new style of resource management and planning software structure in order to integrate the different processes, manage the resources in a better manner and enforce the integrity of the data. The systems which contain all these qualities intact can be termed as an ERP solution or system (Davenport, 2000; Boykin, 2001, p. 99-100; Sadagopan, 1999, p. 179-181). Before ERP was introduced, the supply chain segment used to enjoy the advantages of material requirement planning (MRP) in case of delivering performance and inventory turnover (Schroeder, Anderson, Tupy, and White, 1981, p. 1-4). Though statistics speaks that 80 percent of the companies implementing ERP have failed (Sarkis and Sundarraj, 2003), Cliffe (1999) revealed that about 65 percent of the executives have a belief that the ERP solutions can be harmful, and these perceptions further lead to the failure of the ERP system or poor implementation of the systems that even lead to the bankruptcy of the companies (Appleton, 1997). However, it goes without saying that those evidences of failures are there, but benefits of ERP are also innumerable. The top management of the FMCG companies having clear vision regarding the implementation process and its results can utilize it for the success of the company (Holland and Light, 1999). A new perspective in the supply chain can be seen nowadays due to which companies are opting for ERP systems for the FMCG sector. Due to rising pressure of implementing green systems, and utilizing green resources by increasing on the manufacturers and marketers, the usage of ERP solutions specially designed to support green or eco-friendly supply chain have been launched in the market. Indian FMCG sector took like that of other countries has welcomed this initiative. Though the penetration level of such specific ERP system in the supply chain is less, but it is slowly gaining momentum (Wu and Wang, 2006, p. 882; Leedale, 2010, p. 1-3). 1.6 Outline of the Study It can be well understood that when the country has such massive establishment of FMCG industry, then supply chain would be surely playing an important role in this sector. Keeping in mind the significance of supply chain in FMCG sector in India and the increasing use of technology in the retail and FMCG sector, this study aims to thoroughly analyze the significant and the challenges of Enterprise Resource Planning (ERP) in the supply chain of the FMCG sector of Lucknow, India. ERP plays an important role in the supply chain of the FMCG sector because the motto of supply chain segment is to deliver the goods at the right time, in the right place and to the right people. The study is designed to include the both the secondary data and the primary data. Secondary data signifies the past research and literature that are available on the usage of technology based ERP solutions in the Indian supply chain segment of the FMCG sector, and primary data on the other hand would be collected thr ough questionnaire survey that would be conducted. Since the primary research that would be conducted would be specifically based on the FMCG industry and its supply chain in Lucknow, India, the research study begins with an overview of the nuances of the FMCG industry, the role of the supply chain and the significance of the ERP solutions in these sectors in India. This would give the readers a clear view of the country as a whole. The next section would be a literary analysis of the supply networks in India, especially in the northern parts where Lucknow is situated, the penetration of technology, especially solutions like ERP, and also a brief overview of the supply chains of the companies in Lucknow chosen for this research study. Further a research would be conducted and results drawn would be analyzed to suggest recommendations. 1.7 Research Objectives The objectives of this research study are stated below: To comprehend the notion of ERP in supply chain management, in the FMCG sector and focus on the significance and relevance. Analyze the importance of ERP by studying the past literatures available, so as to evaluate the theories of other researchers in this regard. To scrutinize the activities in supply chain management and understand the operation functions of major FMCG companies of India, which are also based in Lucknow. To study the activities and functions of ERP in the supply chain of these companies. To analyze the results of the findings and throw light on the similarities and differences of ERP usages of these companies in their supply chain management. 1.8 Problem Statement The study would investigate the responsibility and the challenges of ERP in supply chain segment of the FMCG sector in Lucknow, India. The issues which the supply chain companies face due incorrect ERP implementation or inadequate training would also be discussed. Further, instances of breakdown of the supply chain services in the FMCG sector due to ERP problems would also be discussed. 1.9 Research Question Q1: What role does supply chain play in the FMCG sector of Lucknow, India? Q2: What improvements can be seen in supply chain after extensive usage of ERP? Q3: What challenges supply chain departments or companies and the FMCG companies face specially due to ERP? Q4: How the major FMCG companies in Lucknow, India utilize ERP for their supply chain? CHAPTER II LITERATURE REVIEW 2.1 Supply Chain Sector in India The traditional boundaries are the things of past. The new horizons of technology have introduced an array fresh business opportunities and also infused various challenges that needs to be mastered or trapped. In order to maintain a significant position in market nowadays, companies have to concurrently manage the efficiency of the various business activities, such as distribution, manufacturing, and services, effectively. Competitive advantage is governed by innovation, visibility, customerization, velocity, scalability, and cost governance. The future of business depends on serving the customers properly, and maintaining a trustful relationship with the suppliers, and partners. In order to attain all these criteria and objectives, organisations apply the concepts of supply chain management (SCM) (D. Simchi-Levi, Kaminsky, and E. Simchi-Levi, 2000; Sahay, 2000; Derocher, and Kilpatrick, 2000). The concepts and theories of SCM can be traced back to the ages of Forrester (1958, 1961), who recognized the dynamics of several response to the changing demand in the various situations that arises in supply chain. Forrester had acknowledged that dynamic complexities create distortion in the patterns of demand by shifting the demand from the end users to the manufacturers, and the raw material suppliers. One of the major implications in SCM is that all the participants are interdependent, which is both the strength and the weakness of this system. The interest in SCM has increased since 1980s after globalisation and free flow of trade and commerce. Organisations started viewing the benefits of collaborative trade relationships. Though management concept has vast scope for growth in India, but the proliferation of the variety of products and the reducing life cycles of the products have forced the Indian companies to think beyond the boundaries of just maintaining collaboration with the supply chain partners (Vrat, 1998, p. 10-24). The dramatically changing environment has made the Indian organisations realise the effect of competing unnecessarily without the assistance of the supply chain associates. The requirements for adaptation of collaborative methods are high because of the recent deregulation in the global economy and also due to globalisation and its effects on the Indian economy. The traditional defensive industrial, organisational and economic boundaries have now been demolished (Saxena and Sahay, 2000). However, new and emerging markets bring in new opportunities, as well as new rivals too. The rules of trading relationships and economy are now ascertained and re-defined by technology and information networks. This is the reason why it has become mandatory for the Indian organisation for look out for such SCM methodologies and process which can maximise their efficiency not only beyond their operation, but also make them eligible to compete with the top FMCG brands of the world (Sahay, 1999). Many Indian companies have not operated in the open economy system. So working with appropriate business partners, developing mutual trust, designing a flawless SCM system, etc are altogether an alien ball-game for them. It has been studied that the Indian industry spends about 14 percent of the GDP on the logistics, and about $25 billion is attached to the inventories or stocks in the supply chain system around the country. Though India is one of the fastest developing countries with more than a billion populations, it should think of integrating highly advanced SCM theories and approaches for sustainable economic growth (Korgaonker, 1999a, 1999b). The significance of supply chain in organisation is being recognised in at the corporate level. The Indian supply chain plays a significant role for the growth and development of the FMCG sector. With the motive of overcoming the challenges that the retailers face and also to develop new systems and solutions for the organisations in India, the Supply Chain Council was formed (Supply Chain Leadership Council, 2012). Supply chain assist in organising the business activities in the FMCG by establishing a shelf-centric partnership between the manufacturers and the retailers. The nature of the supply chain in India is relatively fragmented because of less availability of fresh produce. This reveals the requirement of more advanced and organised supply chain in the country. The supply chain networks play significant role in India because they assist the customers to purchase variety of products at affordable prices. It is because of the supply chain the customers can get various offering that the company has designed for the customers based on the changing taste and preferences of t he customers. The Indian Infrastructure in terms of rails, roads, and air transportation are not sufficient. In these cases warehousing play a very important role in the operations of the supply chain system. In order to overcome these issues the retailers in India are trying their level best to decrease their transportation cost and are also outsourcing their supply chain system to the specialized companies for best logistics. Supply chain is required for the development of cost effective collaboration in order to survive in the competitive environment. India has a diverse economy which ranges from village farming, handicrafts, agriculture to technologically advance modern industries, and other diverse services. However the major source of economic growth of India is the Services offered to customers. It has been analysed that approximately 60 percent of labours or work force are into the agriculture (Hirway, 2008, p. 1-14). This compels the government of the country to improve the standard of living of the rural citizens of the country by developing the basic infrastructure for them, making available the resources such as education, medicines, health care facilities, or food, etc for the overall development of the country. The reduction of control on FDI is an initiative to welcome foreign investors so as to encourage free flow of trade and commerce and improve the economic condition of the country. The Indian logistics and supply chain had played an important role all through these years and still evolving for the better. Constant improvement of the supply chain framework has made India the global hub for auto ancillaries, manufacturing of sophisticated products like luxury cars, pharmaceuticals, electronics, textiles, food processing, etc. It also has a significant role to play in the service sector through BPOs, tourism, health services, and education facilities. SCM has occupied a value spot in the corporate level. This is the reason it is studied by young entrepreneurs in business schools to implement an organised supply chain framework in the new emerging India. Companies nowadays directly focus on reducing cost and reaching out to the customers in the shortest possible time. For this reason the objective to design and develop the best supply chain system for increasing the profitability is the best solution. 2.2 Role of Supply Chain in the FMCG Sector of India The FMCG industry follows a simple strategy that is to keep the price margins low, and volume of products high. In order to continue business in this manner FMCG companies in India need to plan the entire operational functions and the different value chain actions to the last details, so as to ensure guaranteed profit. Branding assists in differentiating the products, while supply chain or distribution system would determine the faith of the FMCG companies in the long run. The diversity of the Indian market and the huge opportunities in the vast untapped rural market of India provides opportunities to the FMCG companies to explore these areas and connect them through effective supply chain networks. Though the level of competition, and changing business environment has transformed the significant of each elements in the supply chain, but the major elements remains the same. The activities, level of performances, resources utilised and the approaches of utilising the resources have ch anged with requirements and time. There are five specific factors on the basis of which the supply chain of the FMCG sector in India functions. They are stated below: Combined scheduling, forecasting, offering customer services, and building relationships: The supply chain system has the duty to reduce the lead-time and deliver the goods per performance on time to the customers for building a strong relationship with them. It must possess a strong demand and supply forecasting structure for correct supply chain arrangement and movements. Responsiveness of the supply chain is also necessary towards the customers and is regarded as the most critical factor for success. The forecast for collaboration with the customers is prepared by taking into account the sales figures of the past and a project figure for the future. An effective mechanism for customer care and services is prepared so as to offer customized services to them and provide value based services. Point of sales, inventory and real time demand like concepts are given importance and data related to such approaches are collected from retailers for survey or research in order to improvise th e supply chain system (Gentry and Vellenga, 1996, p. 37-44). Establishment of operational system with the suppliers and formulating provisions for logistics services: The agreements at service level with the transporters assist in providing the reliability and the effectiveness to the logistics framework. The requirements of the customers are analysed and accordingly designs are developed. The feasibility of producing those designs are also checked steps involved in developing a new product is followed to develop the idea into a product and float it in the market. Networking and clustering with the intermediaries and the suppliers for deciding the location of the firm is important, so that the location may act as an advantage for the company. Nowadays outsourcing partial activities of the company proves to a cost and time saving step. After this the selection of a dynamic route for the distribution of the product is selected. The suppliers are selected keeping in mind that the product reaches the customers on time and also large accumulation o f stock in the shop is not there. So the approach of Just-in time is preferable in such cases (Mathur, 2010, p. 391-395). Lean approach for operational improvements in the supply chain is also an intelligent initiative. Companies also develop transport rating systems for tracking and enhancing the performance of the distribution system and logistics, while the suppliers evaluate the cost, but not the unit prices of the products or the services. Cross Functionality through establishing collaborative activities with the dealers and suppliers: The immediate demand is shared and information assists the supply chain to smoothen the flow. Though previously the suppliers were reluctant to use technology or IT services, but now IT is welcomed and deeply integrated in the supply chain system of India. The activities in which the company does not have much experience or competency, is usually outsourced now to save cost and time. Organisation, especially FMCG companies in India have now realized that working in close relationship with the suppliers, intermediaries and the supply chain is critical for the success of the company (Lambert, Stock, and Ellram 1998, p. 3-28). Strategic Partnership and the practice of outsourcing to survive in the competitive environment: The organisations in FMCG sectors prefer to have strategic partnerships with selected well established suppliers. This is the reason why the competition among the suppliers is also increasing. The suppliers are encouraged by the organisations to offer cost effective and quality services. The modularity of the supply chain system is also beneficial for the successful establishment of SCM. The organisations share the rewards and risks associated with the suppliers and the supply chain as the market is volatile and changes in the market negatively affects the suppliers. The selection of suppliers strategically, evaluation and development: The preference for selecting the suppliers depends on the flexibility and customization of the volume of goods. It is the suppliers who should involve in the development of new product so as to deliver the new products to the customers in no time. The suppliers balanced scorecard should be made so that the performances of the supply chain can be assessed (Lambert, Stock, and Ellram 1998, p. 3-28). 2.3 Usage of Technology in the Supply Chain Segment Supply chain management (SCM) plays an important role in companies for the creation and maintenance of sustainable relation with the customers and the suppliers. According to the Global Supply Chain Forum (GSCF), SCM is the incorporation of the major business practices to the customers with the help of the suppliers that assist in transfer of goods, services and relevant information and add value to the offerings offered to the customers and other stakeholders. The process of supply chain management involves all the activities from transporting raw materials to manufacturers to supplying finished products to point of purchase and also to the point of storage (Hanfield, and Nichols, 1999, p. 143-156). SCM includes all activities that are associated with the achievement of competitive advantage and sustainability of the business. In this sphere internet is affecting the process in which nowadays goods are distributed and bought. The advent of Internet has changed the ways of conducting business. Companies are injecting technology in various departments of the organization to discover new ways of earning revenue, finding new customers, and managing the supply chain of the company. E-commerce is one of the parts in the technological environment (Bushry, 2005, p.87-88). It enables the marketer to sell the products and services through a virtual marketplace and the payment for the product is also done online through the use of internet services. In large manufacturing companies, the supply chain segment has to manage multiple suppliers and vendors at the same time and also regulate the flow of goods to the different target markets. Technology is now treated as agents who help in solving the major problems of management or information overload. The collaborative information agents play very significant roles in SCM. The pressure of global competition is increasing day by day, so the requirement for streamlining the supply chain in order to make it responsive and flexible is also increasing. The traditional ways of distributing the product led to the inaccurate assumption of demand and exact supply figures. The suppliers and the marketer also faced problems in the maintenance of records in the warehouses and while production. Due to these issues, the whole supply chain infrastructure started evolving and moving towards the electronic transfer of data, and electronic supply chain systems. There are few characteristics which can be seen in the present day supply chain and its philosophy, such as sharing of information, management of inventory, adopting flexibility readily, cost minimising strategies, coordination of all the intermediaries in the pipeline. The business environment of all the industries is becoming more dynamic, so the product life cycles are becoming shorter, and the demand of produ cts and services are uncertain (Sheth, and Sharma, 2000, p. 55-60). The supply chain environment has changed in the recent times as the warehouses have reduced in number, competition level has increased, third-party services have increased, channel integration, etc. The traditional supply chains are reactive rather than being proactive, uncertain, extensive lead times, deficiency of flexibility in operation, etc. The next generation of supply chain system should be customer centric, have scalability, flexible, open, integrated, capable of functioning autonomously, optimization and negotiation capability, etc. It must have the capability to forecast accurately, and it should be compatible with the manufacturing process (Anderson, and Lee, 199

Literary Analysis of ?The Grandfather? by Gary Soto Essay -- essays re

â€Å"[Gary Soto’s] power comes from showing, from painting pictures that allow the reader to feel the wonder promise, and pain of everyday life† (Fabiano185). Gary Soto’s writing goes right to the center of the Chicano experience (Dunn 284). In â€Å"The Grandfather†, Gary Soto presents the feeling of what everyday life would be like when living in a Hispanic community. Soto is able to do this with a naturalistic writing style, writing in a simple style, and using his real life experiences as a basis. Naturalism is a writing style in which the writer takes a slice of life and makes it last forever. In â€Å"The Grandfather† Soto uses a naturalistic style of writing. In his writing Soto contemplates over everyday life such as marriage, parenthood, friendship, or making a living (Fields 284). In â€Å"The Grandfather†, Grandfather had â€Å"s settles in Fresno and works thirty years at Sun Maid Raisin†¦Ã¢â‚¬  to make a living (Soto 6). Soto writes about everyday events and he does not try to butter anything up. The critic Geoffrey Dunn states that Gary Soto recalls dad to day traumas, tragedies, and triumphs (283). This can be seen when Soto writes about how Grandfather waits his whole life for his favorite tree to give it’s fruit, and after twenty long years, it does (Soto 9). The tree finally giving fruit is Grandfather’s triumph. Soto’s naturalistic writing style is one of the elements that makes his stories so inciting. Cavazos 2   Ã‚  Ã‚  Ã‚  Ã‚  Soto also writes in a very simple style....

IKEA in China, Sweden and the UK Essay

For IKEA the step into the Chinese market was a big step, maybe as big at the first step abroad to Switzerland and the first store on foreign soil (Spreitenbach) in 1973 (Torekull, 1999). It meant entering China and its gigantic – at least potentially – consumer market. IKEA targets different group of people in China than in countries later in the IKEA ‘life cycle’ (i.e., life cycle based on how long IKEA has been on a market). The main target group is female customers – 65 % of all customers. Women, according to IKEA, stand for change in China and they welcome change (and IKEA see them selves as providing the tools for change in at least one area). 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. Customers are aged 25-35 (the core customer is around 30). Many from IKEA’s target group are what in China is know as ‘the little emperors’: the generation born into the One Child Policy (today 15-27 years old). This segment of the population includes some 30 million people. One of the characteristics of this group of consumers is that they are impulsive, easy to influence and are very social. And committed to foreign major consumer brands (Gunnarsson, 1997). They are also known as the ‘the me-generation’ or ‘the lifestyle generation’ (e.g., Schà ¼tte & Ciarlatte, 1999, p 139), IKEA’s customers are also well educated, living in big cities in China. With increasing salaries of the target group, the target group for IKEA increases every year. The customer in China buys less when they visit the store than the IKEA average customer. But in Shanghai for example, the core customers visit IKEA more often than anywhere in the world: 33% come every month. This means – among other things – that there is a need for a lot of change in the store. The Shanghai store rearranges room settings at least seven times a year, for new product or just for different holidays and campaigns etc. IKEA’s offer is to supply affordable solutions to Chinese customers, but the overall image is another one (see below) forcing IKEA to offer other values to their Chinese customers. In the Shanghai stores primary market area the core customers’ monthly household income is 6000 RMB. This is high by Chinese standards but in the IKEA world it is not very high: IKEA compares different countries by using a typical IKEA basket of goods. The Swiss only have to work 2 months to buy the basket while the Chinese will have to work 1 year and 6 months. Merchandise Some of IKEA’s major challenges are summed up in the citation below, featuring IKEA’s current Asia boss: â€Å"When Ian Duffy was first put in charge of IKEA’s China stores four years ago, he spent hours at the checkout line observing customers. He didn’t see many. Instead, he saw plenty of people crowding the Beijing store for freebies – air conditioning, clean toilets and even decorating ideas. Adding insult to injury: shops right outside were offering copies of IKEA’s designs at a fraction of the cost. So, to lure shoppers, the Englishman launched what could be the cheapest IKEA non-sale items in the world: a scoop of vanilla ice cream in a cone for 12 cents. Thus began IKEA’s strategy to beguile the finicky Chinese consumer by slashing prices in China to the lowest in the world – the opposite approach of many Western retailers.† (The Wall Street Journal, March 3, 2006) IKEA is used to be perceived as having low prices, this also one of the competitive cornerstones of the whole concept of IKEA (see above). But this is not the case in China; here the perception is a fairly exclusive western retailer, a store for the higher middle class (Lewis, 2005). For example, for the Chinese, Billy (the inexpensive, high selling book case) was perceived as a luxary (Jungbluth, 2006).  While IKEA has accepted that to some extent, the main strategy has been to cut prices. And to do that, IKEA in China has been allowed to ‘break’ unbreakable codes and rules in the IKEA organisation. China is a big sourcing country for IKEA. Still, for many products IKEA China sources were everybody else in IKEA sources, for example Poland. In China that has meant that imported product were subject to import taxes (22%) and it also involved a lead-time of 12 weeks (it is now down to 5 weeks). To be able to keep cutting prices on the China market IKEA China has been allowed to exceed and expand its sourcing of products in China, while the rest of IKEA still sources the same products somewhere else in the world. The actual figures differ a little on how much in a Chinese IKEA store that is sourced in China. Some say that half of the products in an IKEA store in China are made in China, compared to 23% in IKEA stores overall (The Wall Street Journal, 2006). IKEA says 30 % and in addition to that 500 more articles were the local trading office are now looking for Chinese suppliers. According to IKEA, this has really resulted in lower prices as prices have dropped at least 30% since 2003, on some products the price has dropped as much as 90%. IKEA’s single-seat Ektorp armchair retail for 112$ in China, 67 % lower price than one sold in the US (The Wall Street Journal, March 3, 2006). IKEA, like many other companies doing business in China, is subject to copying. One observer noticed that many Chinese shoppers in IKEA were drawing pictures of the furniture and scribbling down descriptions of the products but not necessarily buying them. (Lewis, 2005). Copying IKEA furniture and style is to some extent easy. The catalogue and the store provide in many cases even measurements of furniture. And IKEA style home furnishing has in some areas become a concept of its own, outside the control of IKEA. If you search the baidu.com, a local Shanghai website, for ‘IKEA style’ you will get more than 39 000 hits. With a focus on delivering help in home decoration rather than individual products as such, it is easier to achieve a position that is not taken over by competitors that copy your individual products: the Karlanda sofa is easy to copy but not the home decorating skills provided by the company in the store, on the web site, in the catalogue etc. While price will not in the foreseeable future be IKEA’s main argument in China, what is? IKEA tries to position itself as a company with an unique competence when it comes to interior design. Helping customers with this is the basic message, rather than selling individual products at low prices.  Focus here has also been on selected areas, like storage. Many Chinese live in small apartments and IKEA can help with smart solutions for storage that makes life easier (is the argument). IKEA’s argument is very much about function while this contrasts to traditional furniture manufacturers in China were everything is about tradition. From experience IKEA know that markets run through some kind of life-cycle: when stores open in a new country most customers buy what IKEA call market-hall products, i.e., everything but furniture. In established countries the proportion is said to be 65 to 35 between furniture and market hall products. It varies across IKEA stores in China but China has matured relatively fast with proportions between furniture and market hall fast approaching those in older markets like Sweden and Germany.  Chinese see IKEA products as innovative and not traditional. Square tables are for example not traditional (round tables are tradition) and many of the colours used are not traditional to the Chinese. Everything in an IKEA store, in China as everywhere else in the world, is sold under the private brand ‘IKEA’. In the Sweden shop in the IKEA store (outside Sweden) there are exceptions as it holds famous Swedish food and drink brands, but in home furnishing it is IKEA. According to IKEA, ‘IKEA’ is a well known brand. In Shanghai, 96 % in the catchments area of the store know of IKEA. Fortune Cookies (Dagens Industri, 20060505) first market and opinion poll in China shows that, among people with a monthly income of no less than RMB 2500, living in urban areas and aged 15-55, 75% know of IKEA. The meaning of IKEA in Chinese is positive and very appropriate: IKEA’s translation in Chinese means ‘desirable for home living/comfortable home’ which is regarded as a very good translation in China. It is pronounced â€Å"Yi Jia†, similar to the English pronunciation of IKEA. All products, here as everywhere else in the world, have Swedish names and the assortment in a Chinese IKEA store is very similar to one in the US, Sweden etc. In 1998 three products were added for China – chopsticks, wok  with a lid and a cleaver – but they are now in almost every store around the world. The Chinese IKEA stores have a special set of tea cups for the Chinese New Year. Also, 500.000 plastic placemats are produced to commemorate the year of the rooster (Business Week, nov 15, 2005). At the moment mainland China, as well as in Hong Kong, the beds sold are shorter (190cm) than standard-sized beds (200cm). This is currently being reviewed but so far constitutes another adjustment in the assortment to fit demands in the geographical area. Many Chinese live in apartments with balconies and this space of the apartment is very important to the Chinese. IKEA has added settings in the store that show how you can furnish your balcony and a special balcony section in the stores (Lewis, 2005). Location and store formats The big-box IKEA format is unusual in China were shopping traditionally is done locally and with specialist stores. IKEA stores in China are located closer to city centre than what is the case in other parts of the world were IKEA stores are usually located well outside city centre and suburbs. In China the location is closer to some type of city centre while the location is not exactly down town. A location well outside the city would not have been ideal in China as consumers do not have access to cars like European and US customers have. Here the stores have to be where public transportation can take people, and where there is some kind of hub where many people pass through. A good example is the Shanghai store which is very close to several bus lines and one of the metro lines in Shanghai. However, as the Shanghai store have 700 parking places under the store, IKEA is expecting Chinese shopping patterns to change in the future (= more private cars to go to the store). Public transportation to the store is a contributing factor to the service level: home sending services are more common and more used here (while they are available also in other parts of the IKEA world). Also, outside the store in Shanghai (and outside other IKEA stores in China) you will see entrepreneurs setting up to transport home for people and also following that with actually putting the furniture together for IKEA  consumers in their homes.  In the new Beijing store – the larges IKEA store outside Sweden (the Stockholm ‘Kungens kurva’ store is the biggest in the world) interesting adjustments have been made to the store format. The store here have wider aisles to cater for the fact that IKEA stores in China have up to three times more visitors than IKEA store elsewhere in the world (The Wall Street Journal, 2006). Advertising and promotion One of the big differences when it comes to communication with the consumer in China compared to the rest of the world is the reliance on the catalogue. Here it is impossible – cost and reach wise – to distribute it like in many other countries. The catalogue is distributed in the store and in some of the primary market area but here the reliance is more on smaller brochures that are sent out several times during the year. These brochures are produced by the same people in Älmhult in Sweden that produces the catalogue, in order to make sure that the brochures have the same layout and IKEA ‘feel’ as the catalogue itself. An example of PR activities is that IKEA a couple of years ago transformed the interior of 20 elevators in less affluent residential districts in Beijing. Nice environment in a dull place, this is to reach untapped markets (‘Change is easy’). PR activities are also important, taking Chinese journalists to Sweden and Älmhult, teaching them about Sweden and IKEA and the roots of the company. IKEA is known for its ‘out of box’ thinking when it comes to creating interest for IKEA and its products. IKEA in China is no exception. IKEA is supposed to have started or sponsored a TV-show were the viewers are offered lessons in home decorating IKEA have run many different ads in China, in TV, newspapers and in print. Themes in campaigns are the same as everywhere in the world but with the Chinese twist (be different, break tradition). Maybe the IKEA advertising line in China is a little ‘softer’ than in other places like in the UK. More humble advertising, do not stand out very much, friendly, home furnishing solutions, educate the consumer, offer partnership for the future in new  home furnishing solutions. The ad featured below is typical: The message of the ad is ‘Small changes, a refreshing new life’. Life can be made better, easier and nicer with small means. Small changes are the key word in IKEA ads and in-store. Other ads that IKEA have run have the theme of â€Å"do not be like your parents†, a theme that seems to speak directly to IKEA’s target group of young women 25-35 years old (Lewis, 2005). The web sites of the different stores in China is also argued to be important: the Internet is a common source of information for the target group, the younger middle class. Also, this source is used as a way to educate customers before coming to the IKEA stores on the concept and how the shopping experience will be (see below also). 12 IKEA Family was introduced in China in 2007 and much is expected from how this will work to attract Chinese customers. The selling environment and service While the products available in the Chinese stores are basically the same as in any IKEA store in the world, the stores do not look the same inside. What IKEA tries to do is to build the room settings not like in the US, not like in the UK or Sweden but in a way that feels relevant to Chinese customers with sizes of rooms and kitchens that are realistic by China standards. So even with the same products, the aim is to make the store in Shanghai look very different from the one in Malmà ¶ by the set-up of rooms. Thus: basically the same product range – but adaptation in the store: presentation of goods and home solutions offered. In China the store layouts reflect the layout of many Chinese apartments. One obvious example was mentioned earlier, balconies are present as many Chinese apartments have balconies. (The China Business Review, July-August, 2004). Overall the shopping experience is different. As other customers are an important part of the shopping experience the way the store is used – as reported above – by Chinese consumers not only as a shop but also as a social area, make for an  (compared to IKEA stores in Europe and the US) different experience. In the beginning, Chinese came not to shop but to socialise in a nice atmosphere, unlike other furnishing shops in China (were you are not allowed to feel and touch the merchandise). This is still true – you find people in the Shanghai store that seem to sleep in the beds and sofas, those that read a book with the feet on one of the tables in the room settings, take a nap – but IKEA try to put up with this as they hope that these people will later return as customers. For example, on in-store sign portrays an older couple whose child just moved away from home to attend college. The couple discusses how IKEA help them to convert their son’s former bedroom into a new room for their own use. The store’s room setting are full of furnishing and dà ©cor ideas for this purpose, the ad argues. The Beijing store is expected to take 20 000 visitors a day, and weekend crowds are so big that staff need to use megaphones to keep crowds in control. 20 000 a day add up to some 6 million visitors each year. To be compared with the ‘normal’ number of visitors for an IKEA’s store elsewhere which is 2 million visitors/year. As the staffing is the same as in other IKEA stores around the world there are of course consequences for the service level. IKEA’s own CSI (Customer satisfaction index) shows that – expect for service and shopping experience – China is below the IKEA average. IKEA scores high on product range and fashion. Seeing the number of people that visit the stores in China it is no wonder satisfaction levels were down. Today overall satisfaction in China is argued to be equal to the rest of the world, despite a lower score in some areas. When it comes to inspiration, waiting times and helpfulness of staff IKEA in China scores above average. Another thing puzzling the Chinese customers about IKEA are the added labour one has to put in oneself. Besides the self service concept throughout the store, having to visit a warehouse to pick your stuff up – the customer have to assemble it at home. While you do not need many tools to do this, as China does not have a DIY culture, who has even the most common tools in their houses? When you need something done you call for someone as labour is less expensive. To try to explain and justify the DIY concept – which is at the heart of the IKEA concept – is thus hard work in China. IKEA provides home delivery – long and short distance – as well as assembly service for a low fee (home delivery short haul for RMB 50 and assembly one piece RMB 40). IKEA has also created – not intentionally but still – an industry around itself of delivery drivers that also help assemble your IKEA furniture. These pick-up trucks with drivers are lined up outside the stores (Lewis, 2005). However, when Chinese shop at other places this is included in the price. In Europe and in the US the price is so low that the consumer can see the benefits to do things myself but here when the price of the products at IKEA are not that low and you are expected to do things yourself that no other retailer here makes you do†¦.it is easy to see the uphill struggle. IKEA tries to acknowledge this and provide information in the stores, on the website and in the catalogue to prepare the Chinese consumer for the IKEA store experience. They even have shopping hostesses walking around the store explaining and showing how the concept works to customers. And it is progressing, IKEA representatives argue, but slowly. As indicated above, consumers in China are demanding when it comes to service. They are used to, if not world class service, but at least that there are people to help you with all kinds of tasks. The self service concept of IKEA and the DIY is one thing that is hard for Chinese to accept. And what about service orientation among staff in an IKEA store? This is difficult to get an indication about. IKEA uses mystery shoppers to get some information here but it is hard to say something general. If you take into account 50 years of dictatorship, state rule, state owned enterprises with little room for the individual etc – how service minded can you expect the Chinese to be? IKEA tries – here as everywhere else in the world – to implement a staff strategy that makes everybody coworkers rather than employees. This is something that ought to be contrary to the culture in a country with high power distance relationships. IKEA argue that it is improving as conversion ra tes – consumers visiting stores that are also buying something – are improving, and are now well above 41 %. IKEA has another challenge that affects service and that is the fact that many products – despite increased sourcing in China – have huge lead times  in terms of shipping from Europe and other sourcing markets to China. That have historically made it necessary for Chinese stores to push and sell what they got in store rather than what they do not have in store (but is in the catalogue). Due to a lot of work being work being put in to improve this – increasing domestic production, a new warehouse in China – availability in China is almost the same as for the rest of the IKEA group. IKEA in Sweden IKEA’s first store in Sweden, the first in the world, was opened in 1959 in Älmhult, in Smà ¥land (a county in Sweden sometimes rumoured to be very barren and with people that are extremely stingy). IKEA today has 17 stores in Sweden and IKEA is a big part of home decoration in Sweden – and has been so for many years. IKEA’s statement in the business mission that they make furniture for ‘the many people’ is very true in Sweden very penetration of their products are very high, much higher than in many more markets. Accordingly, IKEA is well-known in Sweden, i.e., Swedes have knowledge about IKEA products, stores and the company, many Swedes have had IKEA furniture for generations. This is from a company perspective also a challenge, not just a good thing as   IKEA becomes associated with boring furnishing styles of older generations. IKEA is still in Sweden seen as innovative with very good prices.  While ‘the many people’ is an accurate description of consumers of IKEA in Sweden, in actual marketing work it is a bit smaller. It is women 20-49, often with children. In addition, an important target group in recent years has been +55 years that think they have done enough home furnishing, have no kids in the home and have a good financial situation. Merchandise Overall, the IKEA assortment is around 10 000 products that the stores can choose from. In Sweden the stores are fairly small and carry only 6-7 000 of the available products in the general assortment. While there is no adjustment made in the assortment to the Swedish market, adjustments are made to the local market by the stores (in terms of marketing and the local competition situation) who have the authority to adjust to local competition and have during the latter years received and developed more marketing  initiatives than previously. Price (as a marketing tool) is central in Sweden as IKEA is known for its low price. This is done by have a low price promise and the aim is to have a low in comparison to competitors in different areas. In recent years, here as in most parts of the IKEA world, cutting prices has been a major marketing strategy, by some 20% over the last 8 years. Sourcing for all the larger and transport wise heavier and bulkier products are done in Europe (and Sweden itself is one of the larger sourcing countries for IKEA outside Asia). Location and store formats In Sweden IKEA stores are located as in much of the IKEA world: outside city centres, with a focus on consumers using their own cars to travel to and from IKEA stores. For IKEA, establishing an IKEA store in Sweden if fairly easy, IKEA gets many propositions from different areas and towns in Sweden wanting an IKEA store. One of the recent and much publicized openings of IKEA stores in Sweden was the store in Haparanda Tornio. Haparanda Tornio is in the far north of Sweden (on the border to Finland) and launch of the store there has been a big success not only for IKEA but for the whole community (which is an area where depopulation is a major problem). However, event though it is easy to find places to establish IKEA stores in Sweden, there is still (also for IKEA) competition about the good places to locate a store. As mentioned above, IKEA stores in Sweden has been fairly small, in the lower rim of square meters and number of articles stored (except the big store in Kungens kurva which is the biggest IKEA store in the world). There are plans to refurbish stores and make them bigger, and new stores are always bigger than the older ones. Otherwise the format of the store follows the IKEA standard layout with parking lot outside the store and a two floor store. Some new stores, like the new store in Malmà ¶, is planned to be build on pylons and have the car park under the store (like in Shanghai for instance). Advertising and promotion In Sweden the catalogue is the most important promotion tool. It makes IKEA unique, is a source of inspiration and is the most important printed marketing tool IKEA has. In Sweden the launch of the new catalogue is a major thing, something that all major newspapers have lengthy reports about and that is a major PR thing. In 2008 IKEA furnished the waiting hall of Stockholm train terminal when the new catalogue was launched August 14th.  IKEA Family was first launched in Sweden and was at that time one of the first loyalty cards and clubs in Sweden. Today it is still one of the bigger ones with 1,7 million members and is still a very important marketing tool for IKEA in Sweden. The web is also important for IKEA Sweden, maybe especially for new groups of customers (for example younger customers) and because it is a good way to make customers prepare for the store visit and it is also there IKEA can make accessible different planning tools like for instance the kitchen planning tool. IKEA’s approach to the Swedes in advertising and promotion is intended to be youthful and different, fun and surprising, emphasising that nothing is impossible but that the company also is very honest and human. At the moment IKEA in Sweden is in a period of ‘re-launch’. While being well known (as IKEA is in Sweden) is often an advantage, it can also be a disadvantage. Consumers get used to the company and the rebellious attitude and image is hard to keep when penetration – in many age groups – is very high. Compared to many other IKEA countries, IKEA in Sweden is in another part of the IKEA lifecycle where consumers have homes filled with IKEA furniture and accessories, IKEA is the market leader for kitchen in Sweden etc. How do IKEA make the Swedes still find it exiting and new? The line for 2008 is ‘Decorate the home as you want to live’ and ‘Long live diversity’. Examples of IKEA address Swedish customers is a campaign that is a few years old and went from the fact that in IKEA target group there are a lot of divorced parents that share custody of children. So the campaign focused on how IKEA contributed to the slogan ’Better divorce for everybody’. IKEA has also focused on campaigns which points to the diversity of the Swedes in terms of ethnicity, showing different ethnic groups in Sweden as customers. One of the more well known and longest running campaigns is the one with the slogan ‘Not for the rich but for the wise’ emphasising that IKEA has high quality for low prices and that wise customers realize that. The selling environment and service The stores are the main marketing tool of IKEA in Sweden, this is where the customer come and this is where they can see what it is all about. As indicated above, IKEA stores have been fairly small in Sweden which has meant that it in many places has been difficult to expose and show the width and depth of the assortment IKEA actually has. Increasingly new and bigger stores are built to allow for showing the customer more of the IKEA product range. The stores in Sweden are set up in a fairly standard way. The common store planning which is the IKEA store planning blue print is used as a starting point – but that then meets the actual or planned store which makes for adjustments in the standard layout. As in all IKEA countries, the furniture part of an IKEA store (the room settings on the 2nd floor of the store) is always opened by 5 rooms that are the same all over the world – but these are also adjusted locally to see what the local markets can do with this. While the stores are to some extent set up the same way, local adjustments are made to the normal room-size of a living room or a bed room of the country market, the interior of the kitchen etc etc. A Swedish IKEA store for instance have often kitchen room settings 16 with what is called a kitchen island (part of the kitchen is a stand alone part integrating cooking, washing up and eating places in the kitchen) and walk in closets. To Swedes the DIY concept of IKEA (and DIY in general) is an accepted concept: you collect your flatpacs, carry them home, assemble and you pay a lower price. Still, in recent years IKEA in Sweden have added services concerning home delivery and assembly service at a cost for customers that want this. When it comes to the Customer Satisfaction Index (CSI) that all markets in IKEA do regularly central factors are waiting time and product in stock, which is something that IKEA Sweden has worked with a lot and have improved in recent years. This also indicates that one major problem in IKEA stores in Sweden has been queues in stores and out of stock of products. IKEA still get high points from Swedes on innovativeness and the low price level. IKEA in the UK IKEA has a fairly long history in the UK, having entered the market in 1987 and now has 17 stores in the UK. Expansion plans include a further 7 stores in the near future. The UK is one of IKEA’s major markets, the second to third one in size after Germany and the USA. The current CEO for IKEA, Anders Dahlvig, was the country mananger during much of the 1990-ies when a relaunch and repositioning of the brand in the UK took place. The target group is mainly women in families aged 25-45 and middle-class. This then varies with different products and product groups. Merchandise Overall the assortment in UK stores are not different from anywhere else in the IKEA world. The beds sold at IKEA are bigger than the normal UK size but that is something that IKEA tries to make a point of (so no adjustment has been made here). Adjustment of electrical products are, of course, made but in general there is no adjustment in the merchandise sold in the UK. All the normal supply chain is used and larger products are sourced in Europe while accessories are sourced in other parts of the world. IKEA in the UK also has a low price image and promise to the consumer, this is very important in the marketing: low prices but good quality. In recent years, as elsewhere in the IKEA world, one of the premier marketing focuses has been on cutting prices. Allegedly prices has been cut by more than 20% over the last 8 years. Location and store formats The fact that the UK has 17 stores and around 60 million inhabitants, Sweden has 17 stores and 9 million inhabitants tells us that UK retail planning laws are very strict and difficult for big block out of town retailers like IKEA. The lack of new established stores has been a major concern for IKEA UK for many years and that also forced some new thinking concerning the layout of an IKEA store. Normally it would be big parking space and two stores but starting in the UK, IKEA has started thinking differently on how an IKEA store is set up. This has lead to an adjusted concept store in Coventry with three levels and a closer to city centre location. Whether that is now the solution for IKEA UK to set up more stores or not is not clear. Most of the stores in the UK are set up the standard way and has an out of town location, encouraging customers to use their own cars to access the store. Advertising and promotion Also for IKEA UK the IKEA catalogue dominates marketing efforts. While now 70% of the marketing budget, efforts are made to lower that as it is believed that it is very expensive to distribute in high population markets like the UK and it is also no longer as effective a marketing tool as is once was. One of the most noticeable things about IKEA in the UK is the daring and challenging approach that has been used through the years. The IKEA and St Luke’s campaign ‘Chuck out the Chintz’ from 1996 is famous (even Tony Blair referred to it) as is the ‘Stop Being So English’ campaign. In the UK IKEA as dared more than in many markets when is comes to challenging the market and its customers. The preferred approach is being different – but do it in a way that connects to the fact that IKEA sells home furnishings. According to IKEA, the Brits should appreciate their homes more (and spend more time there) and IKEA can help with low prices, good products and design and the fact that IKEA has 65 years of experience in home decoration. The launch if IKEA UK in Scotland is a good example of adjusting to the local market while sticking to the mail IKEA ‘be different’ message. The campaign focus on two very hard looking Glasgow guys – that go soft with soft pillows and green plants from IKEA. The web is very useful in the UK, as the stores are only 17 and there is a need for information on availability on products and to prepare the store visit IKEA family was launched in 2007, and is reported as very successful also in the UK. However, compared to the British grocery retailer Tesco who runs probably the worlds most successful (in many aspects) loyalty card, IKEA has a long way to go before the IKEA Family loyalty club generates as many advantages as Tesco’s club does. The selling environment and service UK customers are said to be demanding and does not mind airing their problems and IKEA Still, Brits generally live in the houses that they own and are not alien to the DIY concept, even though the IKEA DIY is somewhat extended compared to the original meaning of DIY. Here, as in Sweden, services offering to take out some of the DIY parts have been (home delivery and assembly service at a cost). UK has struggled with some things that relate to selling environment and service. It all comes back to having only 17 stores and being 60 million people and IKEA UK being one of IKEA’s biggest markets – i.e., IKEA is very popular in the UK and that leads to problems that can be seen in the IKEA CSI. Access to stores and products out of stocks are areas of concern as customers say that it is difficult and time consuming to get to the stores – and they also often run the risk of not being able to take the products home with them from the stores as they are out of stock. This is of course things that are acted upon, through the long range work to establish more stores to planning of personnel in the stores (which is difficult in itself with a fairly large personnel turnover in the UK). Still it 18 is a major concern, making this area of the marketing effort a challenge. The Brits are satisfied with the prices that they feel are low for the quality that the customer get. Summing up IKEA in China, Sweden and the UK In figure 1 we attempt to compare IKEA in China, Sweden and UK. For comparison there is also a more ‘general’ picture of IKEA in the world. The comparison is done for the four different dimensions of retailer marketing strategies that we have investigated. As the comparison is done on a general level it lacks detail but is even so considered to give a good overall picture of how the different countries relate to each other on the different dimensions. Summary and conclusions In the case of China it is clear that IKEA have had to adjust and work harder with some its basic principles than on other markets around the world (maybe Eastern Europe and Russia being the exception), certainly than in Sweden and the UK. Low prices are one of the cornerstones of the IKEA concept. In China IKEA have had to drop some of its basic principles – centralised sourcing and supply chain – to be able to develop its business in China. Prices were too high and are coming down in a rate the demonstrate how wrong the prices were – for the Chinese market – to start with. Also in the case of location and communication (advertising and promotion) we can see adjustments to the characteristics of the Chinese market that are larger than on other markets. Here the special situation in the UK with retail planning laws have forced IKEA to innovate – and adjust – its basic store placement and format to fit regulations in those markets. Here it also seems like Sweden is following with plans to set up new stores (sometimes) in a different way. The adjustments to local humour and preferences is clear when it comes to advertisements, where the approach in China seems ‘softer’ and less provocative than is the case for Sweden and the UK, but in relative terms it may be as provocative. Sweden is a special case as IKEA has been present there for so long, leading to – within a standardised frame of communication – communication that builds on peoples familiarity with the brand. The selling environment and service levels have not been changed in China, Sweden and the UK compared to other places to a large extent. It seems like innovation to fit the Chinese consumer – offering home delivery, assembling service etc – was invented here from necessity and then spread to other markets like Sweden and the UK. From IKEA’s perspective, China has been a real trial of the business concept. To some extent the jury is still out on whether or not it is a success but from IKEA’s point of view the ‘worst’ part of the China experience is over. IKEA have learnt many things in China and many of these lessons will be useful in other markets around the world. One lesson for IKEA – according to senior managers at IKEA – is the fact that it has not been able – in order to succeed on the Chinese market – to rigidly cling to the marketing  strategies that on other markets have meant success and meant working towards the 19 business concept. While keeping tight some areas – assortment, brand name, overall communication, store concept etc – IKEA has been able (and forced to) adjust some other parts to be relevant on the market. Without adjusting prices radically and changing sourcing and changing main communication (not catalogue), it might have been another story. From IKEA’s point of view the lesson might also have been that it is not critical that it can not achieve the same results with the same tools on all markets. Adjustments have to be made on alien markets like the Chinese. But as the Chinese market experience shows: adjustments can be made and still be true to the overall business concept (as some of important pillars of the IKEA concept have not been changes, just the ways of achieving them). While IKEA in China is about introducing a business concept that is – to some parts at least – different to what customers are used, IKEA in Sweden and the UK have different situations. Swedes have 50 years of experience of the IKEA concept and the risk is always that it gets boring and something that is seen as old-fashioned, if the innovativeness is not continued. And that innovativeness is something that – for a standardised retailer – needs to be found within the business concept somehow. Brits have 20 years of experience of IKEA so the challenge is also here to continue to be innovative while being more and more of the establishment so to speak. However, in the UK there is still much less penetration of the concept than in Sweden so the marketing strategy work is somewhat different. From a general retail standardisation and adaptation point of view, the IKEA case shows that it is possible to work a fairly standardised concept also on markets that are very different from the ones were the business concept have originated from. However, the case also shows that there are limits to how far you can go in standardisation. In the IKEA case it is clear that to some extent they need to adapt in order to be true to their business concept. This also means that it may be more interesting to focus on whether or not companies are true to their business concept than if the are using the same  marketing strategies all over the world. It is the business concept that is exported and in order for that to be the same all over the world, marketing strategies sometimes need to be adopted rather than standardised.

A Weekend with My Grandparents

Last weekend was one of the most enjoyable weekends I have ever had. I spent it with my grandparents not their farm. I have often stayed on the farm before but this was a special occasion. It was my first visit during the middle of the fruit season. My grandparents have a huge orchard full of fruit trees such as durians, lychees and mangosteens. The fruits in the orchard are deliciously sweet and tasty, as I have often tasted. When I arrived early on Saturday morning,my grandmother told me that grandfather was at the orchard.I immediately set off on my bicycle to the orchard that was only five kilometers away. It was a pleasant ride because it was cool and the air smelt clean and fresh, quite different from the air in the city where I live. Soon, I reached the orchard and went looking for my grandfather. He was of course thrilled to see his only grandchild. When I offered to help, my grandfather gave me a basket and told me to pick up the ripe mangosteens. He also gave me a long stic k with a knife attached to one end.This was to help me reached the fruit that were high up on the tree. there were several other men who helped to pick the fruit. These were the workers who had been hired for this specific job. B lunchtime, I had already filled many baskets and put the fruits into large containers. We had a brief stop when the women brought food for all of us. We sat under the shade of the trees while my grandfather told me stories of the days gone by. Then we continue plucking the mangosteens.By evening, all the mangosteens had been plucked before the fruit seller arrived. He weigh the mangosteens and then put them onto his lorry. When we went home that evening I was tired but happy. My grandfather told me I had done a good job although I had eaten quite a lot if the fruit that I had picked. The next morning, we again set off to the orchard. This time we were supposed to gather the durians and the mangosteens. Since I had no experience, I was not allowed to gather the durians. I just helped with the mangosteens.There were not that many trees so we finished by lunchtime. After lunch, my grandfather, who knew how much I loved durians, opened a few of the durians for us to eat. The flesh was smooth and creamy and tasted delicious. After the fruit seller had loaded up the fruit, my grandfather and I went back home. I spent the evening taking with my grandparents who had many interesting stories to tell. Then, my parents arrived and we all had dinner and it was finally time to go home. My weekend had been extremely tiring it it was thoroughly enjoyable.