Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Ikea's global marketing strategy
Introduction about ikea
Ikea's global marketing strategy
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Ikea's global marketing strategy
Introduction IKEA is a multinational company that sells furnishings and furniture. It is founded in 1943 in Sweden by Ingvar Kamprad. The company focused on furniture retailing at the early stage of the business and started to design its own product in 1955. The first IKEA store was opened in Almhult (Sweden) in 1958 (Woodham, 2004). The company has experienced growth ever since, by 2016 IKEA had 390 stores in 48 countries (IKEA, 2016). Since the company was founded its pricing strategy has mainly been low cost. IKEA is known for providing a wide range of low-cost, functional and well-designed products. However, because of the scale and size of the business, maintaining the standards and quality of the products has the potential to become …show more content…
Technologies have also enabled IKEA to conduct marketing research with a lower cost (Ayodele, n.d.). Porter’s five forces analysis helps an organisation to identify the level of competition within an industry. Industry rivalry: IKEA’s unique selling point is low-cost. Although currently there is more furniture retailers are adapting the same pricing strategy, IKEA is still the strongest retailer in the low-priced furniture industry. Power of buyers: The customers’ bargain power is high, as there are other retailers offering low-priced furniture. Power of suppliers: Bargain power of the suppliers are low, because IKEA seeks to commit a long-term contract with suppliers, the competition among the suppliers is high. There are a larger number of suppliers willing to work with IKEA (Dudovskiy, 2015). Barriers to entry: The barriers to entry the industry is high, because the low-cost furniture industry is saturated and the business requires a huge amount of financial investment and expertise (Dudovskiy, 2015). Threat of substitutes: Threat of substitutes is low because the range of products and services IKEA provides still remains attractive to its target customers.
One of the benefits from having low prices is that customers tend to migrate to the store that offers the cheaper products. Low prices and happier customers will have a positive impact on ALDI’s sustainability. Competitors that offer substitute goods are a step behind ALDI’s lower prices. However, because other companies such as Wal-Mart and Target, who are large corporations that have their hand in thousands of areas around the country, also sell products that are similar to what ALDI sells, ALDI is still faced with a
It makes demand elastic. Lowe 's recent appeal to women and product differentiation strategy are helping to mitigate this risk as their stores become more appealing to their target markets.
The threat of substitute products or services force represents the threat of limiting potential returns of an industry by placing a ceiling on the prices that firms in that industry can profitably charge without losing too many customers to substitute products. In addition, under the threat of substitute products or s...
Coles and Aldi are competing as they are both grocery stores located within proximity. Retail stores Noni B, Suzanne Grae and Millers are all competitors as they all target a similar age group. Kmart and The Reject Shop are competitors are they both sell similar items at similar prices. The centre has two jewellery stores which compete and two pharmacy’s which are very similar. Café Numero Uno and Perky Pets have no competitors since they are the only Café and pet store in the complex giving them an advantage.
Bargaining power of customers looks at the power of the consumer to affect pricing and quality. (Arline,
Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porters model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry.
We shall apply the Porter's 5 Forces model to examine the PC market and see how forces of competition influence the profitability of the market players.
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.
and will work their best to achieve them. With this management style, IKEA can use various methods of communications (see E5). However this type of management style could make decision-making slow and is not appropriate to some businesses such as, manufacturing industries. The organisational structure, culture and the management style of IKEA have to perform successfully so that, together they can achieve the company’s objectives. For example, to increase profitability: the communication within the organisation have to be clear so that, staff can understand what jobs have to be carried out; staff have to be motivated to perform the job; the relationship between managers and staff have to be strong and committing; the organisation have to encourage staff to create new ideas and share them amongst others; democratic managers have to listen and act on the opinions of workforce, democratic managers have to make sure that the workforce is well aware of the objectives of IKEA, etc.
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.
Buyer power within the industry is low as substitute products are not easily accessible, unless the customer decides to negotiate with the providers.
Porter’s five forces is a framework for analyzing an industry and business strategy development. It looks at forces that determine the competitive intensity of an industry and hence the overall attractiveness of that industry. The configuration of the five forces differs by industry. Understanding the competitive forces and their underlying causes reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition over time.
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 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...