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1- IKEA’s market targeting
Ikea's global success
1- IKEA’s market targeting
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Situational Analysis The rivalry between existing companies is intense in the global furniture market and key industry players in Europe include Designs Inc, Galiform plc, Wal-Mart Stores Inc., Argos and others. However, Ikea today is the undisputed market leader in the furniture industry discount on the global scale. The threat of new entrants in the industry is low, and the chances of entrance of new competition Ikea is scarce because the current market is saturated and the significant amount of financial investments and experience are necessary to become a shop furniture discount on a global scale. The bargaining power of customers of Ikea is strong, as competition is intense and customers have a wide range of alternative options offered by …show more content…
Various competitors have adapted or created a similar approach to marketing furniture and fittings and therefore Ikea’s market share is being threatened. Most of Ikea 's rivals are located in Europe where Ikea makes most of its revenues, but the competition is very limited everywhere else due to Ikea’s excellence in cost leadership and differentiation in their products. Ikea’s main competitors: Designs Inc, Galiform plc, Wal-Mart Stores Inc., Promotional recommendation - Ikea need to upgrade their website in order for customer to view the availability of products /items in all store location. - In a case where a customer visits Ikea and the requested product is not available Ikea should follow up with customer by calling them or emailing them when the products are
Ikea is a Swedish company that provides furnished products throughout the world. Ingvar Kamprad founded it in the year of 1943. Its furniture is self-assembled thus allowing the company to reduce its expenditures and offer customers low prices in return. When segmenting a market, IKEA usually focuses on age, income level, and lifestyle. It aims to attract young, underprivileged individuals who look to buy furniture for the first time. An example of this would be college students; they are often confused, doubtful, and looking for something cheap. IKEA currently operates in twenty-seven countries including Korea, China, Sweden, and Netherlands amongst many others (IKEA.com). Although it is
...t and satisfactions. In addition, IKEA’s threats are poor understanding of cultural needs and demands. Economically, IKEA's growth had increased due to their low price furniture. The threats, are IKEA had failures to look into the quality of the product. Technologically, IKEA products able to standardized globally. Perhaps, to maintained IKEA's business they tried to stabilize their business with different angles such as stabilizing political status by maintaining good rapport and follow legalization rules all countries. IKEA has also use good method of approaching all the people and improve the performance of their services and products. Furthermore, the entrepreneurs good in assessing, planning and implementing accordingly in order to face any challenges. IKEA has able to accommodate the actual demand in the market towards new technology and younger generations.
Parnell states that business level strategies “also known as competitive strategy, addresses the competitive aspect in terms of who the business should serve and what needs should be satisfied” (2014, p.183). Therefore the business level strategy goes one step closer by discovering insightful trends, strategies regarding competition, and gaining insight on the consumer and business needs. Home Depot business level strategies speak to their product diversification and integration process. The case study (2014) reveals that Home Depot initial inception focused on competing with hardware stores, providing DIY materials and lawn and garden tools (Parnell, 2014, p.378). However, if you were to walk into Home Depot today, they have turned into a one-stop shop for all home remodeling needs down to the furniture and accessories that will be placed in the home. This type of product diversification and unique mix of innovative products confirms the differentiated strategy in which it
The sources of IKEA’s successful entry into the furniture retail business were IKEA’s low prices and resilience. First, Ingvar Kamprad, the founder of IKEA, began selling furniture in his mail order company. Then he was faced with a social problem and turned it into a business opportunity. Since 1935, furniture prices rose faster than any other retail good at 41%. Kamprad responded by creating a line of furniture priced so that all could afford it. The present furniture cartel attempted to stifle Kamprad’s growth and success. The cartel banned Kamprad from selling directly to the consumer at shows, then managed to persuade the manufacturing cartel to stop supplying Kamprad with furniture. Kamprad responded by supplying elsewhere and now could charge even lower prices. IKEA’s success was due largely to low prices and Kamprad’s ability to capitalize on bad situations.
Bowell states that IKEA is establishing themselves “...as a leader in creating and running innovative sustainable places.” This means that IKEA is taking their job seriously. They want to be the ones to help and inspire their customers into following the methods of sustainability. The “People & Planet Positive Strategy” allows the customers individuals to learn about how they can make a change in their own lives by the implementation of products from the company. IKEA is in the process of adapting to the lifestyle of being environmentally friendly. It is necessary for them to become net-positive. Most appliance retailers do not maintain this type of
The selected organization for the marketing Audit is IKEA Group. As part Phoenix University marketing course, the author of this document (hereafter referred as “author”) will review the marketing process of IKEA and will provide an audit report at the end of the course.
This section describes the strengths, weaknesses, opportunities and threats (SWOT) analysis of Indonesia’s furniture industry to identify the competitiveness of Indonesian furniture product and the condition of Indonesian furniture industry to meet EU market access requirements.
The website that has been chosen to be evaluated by me is IKEA’s website. IKEA website is actually one of the profit-making website. The website enables people to choose for their items and make a list before they make a real purchase at the real IKEA store. Basically, IKEA store is a store that provides home furnishing products such as sofas, beds, kitchen stuff, toiletries and some others. And even more, they had a showroom to inspire people to decorate their own house. So, in the website, there is also a preview of the showroom as it will helps for those that did not get a chance to go to the IKEA store.
Years ago Ikea committed to sustainability, its vision “to create a better everyday life for the many people” and its values standing at the base of this primary goal. The company seems to improve itself and make big steps toward this sustainable approach year by year, offering its customers a great value for money spend on all of their furniture products. The concept itself characterizes well its Swedish ruts, where individuals are accustomed to live a life
Apart from that, this firm also concerns about cost control, operational details and continuous product development that allow IKEA to lower its prices by an average of two to three percent over a period of global expansion. Now, IKEA operates 349 stores in 43 countries in January 2014. Current strategy - 1. Low cost strategy leadership IKEA is known as a unique furniture business that involves the customer’s needs with the potential on the factory floor. IKEA has its own abilities to develop its products directly based on the understanding and knowledge about the life and home challenges among the customer’s needs with low cost and high quality product.
Competitive advantage is more likely to be created and sustained if the organization has distinctive or unique capabilities that competitors cannot imitate. This may be because the organization has some unique resources and core competences (Johnson, Scholes and Whittington, 2005). The unique resources of IKEA are leadership and Scandinavian style designed. IKEA had a presence in more than 43 countries and was well known for its good-quality products marketed at relatively low prices. This accomplishment has been achieved by the vision of the founder Ingvar Kamprad. IKEA have consolidated designed department, Com-in, to discover consumers’ need and design for them. All Com-in specialists are from either an interior design background or visual merchandising, and are responsible for the presentation or IKEA product offers using all current range presentation medias and techniques. Core competences are cost leadership, global sourcing, differentiation, and branding. IKEA controls every aspect of the process, from manufacturing to the time the product reaches the consumer. And at every step along the way, IKEA cuts its costs through global strategies. Moreover IKEA buys in global quantities; it is able to get goods manufactured at a relatively low cost. In addition, the company is intent on having good made in the most economical way possible, even if that means using unconventional suppliers to produce furniture or using different suppliers for different components of one item. Furthermore, IKEA outsources its manufacturing in many different countries and also outsources final assembly and delivery to the customers themselves meanwhile IKEA expands its brand with its concept worldwide (Zeller, 2002)
The response could serve as a benchmark for IKEA to deal with the long-term issue of child labor in many industries in India and other developing nations. Positive results could be seen in the development of programs that publically show IKEA taking an interest in the lives of the families affected by poverty and those who are forced to allow very young children to work. The publicity as well as social development could ultimately aide in the overall goal of mitigating the challenges of global sourcing and globalization in general. The negative outcomes would be the initial cost of such program development and implementation would affect IKEAs profit margins and the possibility of sales cost will increase and affect customers, hence awareness may be required to highlight the cost shift, with education and possible displays demonstrating proactive intervention on the part of IKEA.
E-commerce is available on Ikea’s website to selected countries, and they provide an e-mail address to customers who have queries about their business.
IKEA has a slightly different organizational structure compared to other large worldwide company. Ingvar Kamprad founded IKEA in Sweden in 1943 when he was 17 years old. The company vision is ‘To create a better everyday life for the many people’ (Inter-IKEA Systems B.V., 2014). Truly, IKEA has provided many home furniture that at acceptable price for the consumers. Besides, The IKEA group of companies has an ownership structure that ensures independence and keep the long- term sustainability for the business. The IKEA group includes the INGKA Holding B.V. is still a privately held company, both parties were owned by the Stichting INGKA Foundation (Inter-IKEA Systems B.V., 2014). The Stichting INGKA Foundation can only use their funding either to donate to charity through the foundation or to reinvest int...
IKEA is more than a furniture store they are a company driven by values (IKEA, 2014). The company seeks to make their consumers lives easier by providing them with modern, innovative, inexpensive products which they use to tackle daily home activities. IKEA Group has 298 stores in 26 different countries (IKEA, 2014). The company’s vision is “to create a better everyday life for the many people” (IKEA, 2014, para 1). Using innovative techniques for creating, producing, and marketing their products IKEA can provide consumers with durable products for reason...