IKEA & Pro Flowers
Reconfiguring Industry Value Chains to Create
competitive Business Model
IKEA
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A Swedish company that is registered in Netherlands.
Design and sells self-assembly furniture
Founded during 1943 by Ingvar Kamprad
Company is known for eco-friendly simplicity product
Modern architectural design for various types of furniture and
appliance
IKEA
• In 1943 IKEA is mostly a mail-order sales business, five years later is started
to sell furniture
• As of Jan. 2014 it operates 349 stores in 43 countries
• IKEA stores are represented with color blue and yellow( Sweden’s national
color)
Pro Flowers
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Major “flower” retailer company in the United States
An E-commerce company
Started during 1998 by Jared Polis
Online retailer that ship fresh flowers, but was sued by Florist Worldwide
Delivery (FTD)
Question 1
• Do you think that IKEA and Pro Flowers
have plans that effectively describe
what the firm offer to customers. How
could these firm’s models be changed so
they would be more appealing?
• In my opinion, both companies describe effectively what they offer to
customers through their plan (or model).
• IKEA provides stylish, good value furniture with a very competitive price for
customers who do not mind assembling those products by themselves. With
a substantial cost savings through the new value chain, IKEA becomes even
more unique with playrooms for children and Swedish cuisine restaurants
which are offered in its stores.
• ProFlowers is able to offer a wider selection than most florists with a lower
price also. In addition, its customers can receive fresher and higher quality
flowers
How could these firm’s models be changed
so they would be more appealing?
• Both two firm’s models are successful
in taking advantage of cost savings
which is enable them to add more
values to their customers.
• Those values adding to customers help
IKEA and ProFlowers to become more
appealing compared to other firms.
Question 2
What is IKEA’s core competency? What are its strategic
assets? Is there anything about IKEA’s business model that
makes what the company is doing hard to replicate?
• IKEA’s core competency is the “outsourcing service”. It gives IKEA
several distinct advantages.
• IKEA’s strategic assets
 Well design products
 New value chain
 Good customer service
• IKEA’s business model take the advantage of pioneer.
When the model becomes old, it is hard to be
successful for those who come later.
Question 3
Supose that you are CEO of Pro Flowers and you just receive an email from Carolyn Anderson, a highly reputable and sought-after
rose grower, who is interested in learning more about your
company. You have to convey her that your organization has a good
story and she should be part of it.
• Pro Flowers was the first company which has developed
Unique Business Model in our industry.
• We are successful to improve Quality of Service by offering
only fresh and wide range of roses to each home within the
country with new business model.
• Only Best Rose Growers are chosen and we hope to
cooperate with you because of our benefits
• Our good service with your good products will be Perfect
Combination for our customers, and it will be also the
Good Business Fit for both sides
• We would like to announce you that most of the Reputable
Rose Growers are doing business with us, and we are doing
business successfully with High Profit. Moreover, our
business will develop faster due to higher demands.
How does ProFlowers business model
motivate its customer and partners to
participate in business?(Scale 1 to 10)
The Traditional Flower Industry Value Chain
(all, or most, steps completed by different companies)
Grower
Importer
(distributor)
Wholesaler
Retailer
Customer
ProFlower’s Reconfigured Flower Value Chain
(ProFlowers e-commerce platform enables the process)
Flowers delivered to customer via
FedEx or UPS
Grower
Customer
• In our customer point of view, this kind of business, quality is
very important.
• We can scale their company as 8 or 9 , reasons are because they
deliver their product on time and the freshness of the product is
still remain.
• Grower may find a hard time to keep up with the demands of the
customer or chances of having shortage on flowers.
• The customer may enjoy the less cost for the shipment and less
time to wait for the product they have ordered.