The IKEA do-it-yourself approach has generated a different and unique experience to furniture-shopping. IKEA can get more competitive by manufacturing its products in developing countries. IKEA makes their product special is by providing new style designs as per the latest trend with the help of their technology. Rival companies like Conrin Target who only concentrates selling furniture at a very low price whereas Ethan Alan has targeted high segment market (“IKEA Analysis”, 2010). IKEA Essay...fExecutive Summary The following is an analysis of the IKEA case study found in the Strategic Management Text book. But IKEA’s policy of do-it-yourself did not work due to social differences in different countries (Anonymous, 2009). Economic downturn reduces the consumer purchasing power. VAT Registration No: 842417633. Social culture environment includes taste, behavior, basic beliefs and consumers lifestyle. Recessions and declining economies. Disclaimer: This work has been submitted by a university student. Economical environment consists of factors that affect the consumer buying power and spending pattern. IKEA is known as the largest and an international Swedish furniture retail provider (UK Essays, 2013) that vision “to create a better everyday life for the many people,” (IKEA, 2014). IKEA has implemented environmentally friendly concepts and used technology to bring new product ranges before their competitors does. The purpose of this research essay is to update IKEA’s company status for the last six years, i.e. Introduction Ingvar Kamprad “IKEA” came into existence in 1943, when he was just 17 in the small village of Agunnaryd in Sweden (IKEA History, n.d.). In the UK, it moved in 1987. This can be considered a weakness in some countries, where its customer base may prefer another form of promotion, such as television or press. The main tool of IKEA’s promotion is the IKEA catalogue which attracts most of their customers. Outdoor furniture maintenance guide. Marketing mix is a tool which organization adapt to their marketing objectives in the target market. After receiving positive response IKEA opens their first store in Almhult, Sweden in 1958. Free resources to assist you with your university studies! All work is written to order. IKEA have increased loyal customers by providing them excellent customer service. The IKEA business model is unique in its construction and execution with little direct competition on a … Every country has different political and legal factors. The case of IKEA has however tried to help me in understanding the argument involving these two marketing strategies as applied in the international markets. No plagiarism, guaranteed! Registered Data Controller No: Z1821391. The main drive of IKEA is to offer reduced cost through the emphasis of its competitive pricing strategy. IKEA’s flat pack furniture system proves how IKEA is keeping up to date with the present technology. The higher income customers may prefer to have a salesperson’s assistance or even choose to go to the traditional furniture store. If you need assistance with writing your essay, our professional essay writing service is here to help! Not all its customers will appreciate this method of approach. IKEA adopts new technology to develop new products smarter and at a low cost which gives them loyalty from their customers. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Their unique design and low cost of product reduces their substitute and new entrants. IKEA operates around the world and have to follow different political and legal factors in different country for e.g. IKEA has a system which provides customers with a low price home furniture around the world. Do you have a 2:1 degree or higher? IKEA was founded in Sweden in 1943 by Ingvar Kamprad. Free essays on any topics: persuasive essay topics, argumentative essay topics, college essay topics, compare and contrast essay topics, controversial essay topics. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Here you can find your local IKEA website and more\n about the IKEA business idea. IKEA the name attached with strong concept of quality, latest design at low cost. Strength, weakness, opportunities and threat analyses the current and future of the organization. This analyses the strategies used by IKEA to gain competitive advantage in markets outside its original area. The IKEA Group, a Swedish company founded in 1943 with its headquarters in Denmark, is a multinational operator of a chain of stores for home furnishing and house-wares. An interesting part of these statistics show the IKEA store visits between 1954 to 2010. IKEA’s business approach trades service for cost. The name IKEA was formed from the first initials (I and K) of this innovative entrepreneur, plus the first letters (E and A) of the farm, Elmtaryd and the village, Agunnaryd where he grew up as a young man. It sold cheap furniture of Scandinavian design. IKEA is established around the world but its major source of business is from Europe. Home visit: How we live big in a small space. IKEA has such a big brand name that it gives them a competitive advantage over its rivals. All its locations are equipped with free parking spaces and it has developed an environment which is family-friendly oriented. IKEA is having their major market share from UK and IKEA is well known by their controversial TV advertising campaign. IKEA treats its customers as family and this too, has contributed to its global success in the furniture business. Many countries around the world have changed or modified their county policies for international companies to boost their own economy (“Pan”, 2007). This catalogue is standardised globally and is strengthened by a customer magazine. IKEA has made a very strong image on everyone’s mind by providing its unique, stylish and durable low cost good for almost six decades which weak their competitors. *You can also browse our support articles here >. All the furniture and home furnishings products are displayed in this catalogue. Essay UK offers students a complete range of free resources for undergraduate, post graduate, PhD and professional courses. IKEA has to adopt a complete new policy to make business working in China (“IKEA’s Globalization Strategies and its Foray in China”, n.d.). Ingvar Kamprad “IKEA” came into existence in 1943, when he was just 17 in the small village of Agunnaryd in Sweden (IKEA History, n.d.). As IKEA is very big organization, management may find it difficult to implement any quick changes or new strategies. The company’s anti bureaucracy style of leadership has instilled a strong corporate culture in its employees. This is achieved through approaches such as, bulk-quantity purchasing, securing cheaper manufacturing suppliers, low-cost logistics especially demonstrated in its store locations and a ‘do-it’ yourself approach to the marketing and distribution aspects of the company. As per the growing demand and the competitive world market IKEA is facing very tough competition from the rivalries around the world. Not so much of argument presented but important development in the mile stone of IKEA is laidout here. Pest Analysis Ikea Uk. http://www.ikea.com/ms/en_GB/img/error/error279x279.jpg. This approach sanctions good work ethics and fosters productivity in any organization. IKEA creates products which are good quality, durable, modern design and good functioning. Through this strategy, IKEA maintains a sustainable business because it seeks to uphold its principle of ‘low cost’ products. Saturday, January 21, 2012. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Many Chinese suppliers offer same products as IKEA and even at cheaper price. This enormous range of products is mainly due to the fact that IKEA outsources its manufacturing. Threat and opportunities are the external factor of the company. To let people know about their brand is different from other (“FAQ”, n.d.). *You can also browse our support articles here >. Many of the furniture industry are following the same path of IKEA. The current global economic downturn has turned many businesses around and forcing them to close down the business. IKEA offers a wide range of home furnishing products; it exceeds 1,200 items. Supply Chain Management in Ikea Ikea is a renowned global furniture retail shop that was established by Kampard Ingvar in 1943(Bartlett, 2006). Providing unique shopping experience for customers. IKEA is order to operate efficiently and to provide their products with high quality it stays focused on the relationship of their suppliers and customers as shown in figure 3. Its young, educated and value-conscious customers are well suited to this strategy of the geographic and demographic trend. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. IKEA is having a huge range of product and are well know for their poduct design as per customer need and value for money. The added amenities that IKEA offers to its customers is highly ranked customer service. Opening new stores in the place where retailer like IKEA don’t exist.h3. In this section the researcher provides the current position of IKEA based on the case study. Besides that it is also necessary requirement to spell out the competitive advantages that IKEA had.There are many strategies used by IKEA company, example product diversification. IKEA started selling furniture product in UK Essays PRO Page 1 of 2 - About 20 essays. Promotion is the main marketing tool for promoting products. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! With economic concerns over rising living costs and depleting disposable income there is an overall threat to the performance of the business in UK and American markets specifically. To see what their customer respond for that target market (Armstrong & Kotler 2006). The main reason behind selling of their low cost quality product is due to strong relationship with the suppliers and loyal returning customers. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. A major opportunity which IKEA can use as an advantage is the fact that it covers the urban geographical areas. IKEA is eco friendly and uses its raw-material very smarter way. IKEA has to face all the environmental factors before entering the Chinese market but they adopted the right policies and showed how they achieved success in China. Their unique concept of flat-pack and do it yourself which reduce transport cost and make them different from their competitors. Essay on evaluation of nutritional status. IKEA Case Study A Case Study Documenting IKEA’sSuccess and Challenges. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. The IKEA vision explicitly states, “To create a better everyday life for the many people. Let the growing season activate your child. There business plan supports their vision by providing well designed furniture at low price so everyone can afford it (Our business idea, n.d.). Review on Ikea Company . Company Ikea 2 Pages . That earns consumer loyalty towards brand. The IKEA story began in 1943 on the east side of the Scandinavian Peninsula in Sweden, when Ingvar Kamprad founded a renowned furniture and furnishings industry, which has … IKEA in China 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). This exchange strategy may not be appreciated by all its customers who may think that IKEA does not really care about what its customers purchase. Its products are priced low so that everyone can afford to purchase them. At present IKEA grand total of 301 stores in 37 countries among that IKEA itself owns 267 stores in 25 countries. IKEA’s competitive strategy using PORTERS framework. 1st Jan 1970 According to Scherrer, 2003 consumer preference, purchasing pattern and condition under which the product can be sold are affected by the social culture changes. IKEA has more than 2000 suppliers in over 50 countries. For example, managers may use words differently, may differ in their own customers, accounting and finance, we will issue the notification. IKEA in China, Sweden and the UK 7007 Words | 29 Pages. To decrease the threat of new entrants in the market IKEA has to keep up to date with the latest technology and develop new products according to customer’s requirement. The company’s largest market is Germany, followed by the US, France, the UK, and China. Our academic experts are ready and waiting to assist with any writing project you may have. IKEA has been able to provide its customers with a wide range of affordable products which makes them unique amongst its competitors. According to Phhilip Kotler 2003 product is defined as anything that can be afford to satisfy a want or a need. These include the 4 P’s of marketing – Product, Price, Pace (Distribution) and Promotion, the SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) and the PEST Analysis (Political, Economic, Social and Technological). Apart from the colourful, attractive features of the IKEA global retail outlets, their main source of promotion and advertising is through its well-designed catalogue. It takes advantage of the cheap manufacturing sources that are available globally. 2003 to 2009/2010. The previous CEO of IKEA is Mikael Ohlsson, replaced by Peter Agnefjall in 2013. It has created the environment where customers (the young, cost-conscious ones) do not have to be bothered by salespersons who work on commission. Political environment includes Government funding, policies, grants and initiatives where as legal environment includes rules, regulations, legislations, regulatory business and trading policies. This allows its customers to shop in an environment which offers comfort to the entire family. They have started using recycle or reclaimed waste product to produce energy across all stores. This gives high satisfaction to customer this creates value and goodwill of the IKEA. Business Click here to find the right IKEA product for you. IKEA presented approximately 12000 items to the home furnishings market universal. PORTER’s five force analyses show how IKEA is unique and have a cutting edge on their suppliers and customers. The unique and innovative products always attracted their customers (“IKEA Analysis”, 2010). IKEA have good control over it suppliers and have maintain relationship very well from a long time. IKEA’s business model and well-designed home products have been replicated globally en masse. In the United States, the company my face competition from Target, Ashley Furniture, Walmart, La-Z-Boy, JCPenney, and Ethan Allen. Dr walker, an enthusiastic and uncritical reception. They have the opportunity to choose among the different options whatever they wish to use. The report begins by providing a background into IKEA. IKEA is planning to open about 15 new stores in 2010 in china, Italy, Spain, Poland and many other places (Coming store openings, n.d.). And with all the geographical locations of IKEA, this lack of customer service may begin to taint the IKEA brand. IKEA have opened their stores in the suburbs of the city which are easily accessible to their customers. P3 Organizational Functions : IKEA 1665 Words | 7 Pages. IKEA is offering energy saving bulbs which uses less power (IKEA’s Environmental practices, n.d.). Marketing [3] IKEA was founded in 1943. If you need assistance with writing your essay, our professional essay writing service is here to help! This shows how IKEA is using its strategies in developing quality low cost products and increasing their share in the market. In the United Kingdom the competition would be from Tesco, Next. Data has shown that in the first 50 years of its existence, IKEA successfully established 200 retail outlets. IKEA promotes its products via TV, Holdings, Radio, newspaper and online. Calculate your outdoor area. IKEA can sale goods up to 30 % less because of their bulk purchasing power gets goods at a very low price. Marketing and Ikea. IKEA started selling furniture product in 1947. IKEA has to compromise in some countries where there is less political stability whereas due to lot of legal factors IKEA cannot compromise its policies in India. 1st Jan 1970 These are the important factors as per the present time. Introduction Ikea has been offering a wide range of well-designed home furnishings and functional living solutions at a lower price so that many people can afford them. IKEA If you order your cheap essays from our custom writing service you will receive a perfectly written assignment on IKEA. IKEAs vision is to “create a better everyday life for the many people”. Among all the developing countries china was one of the fastest and strongest economy and IKEA took that advantage and opened the first store in Shanghai. IKEA has to deal with all the external factors which are different around the world. The name IKEA actually the initials of his name Ingvar Kamprad, Elmtaryd (the farm he grew up in) and Aqunnarvd (his hometown). Stay balanced with an unexpected lie-in. The founder of IKEA is Ingvar Kamprad who is from Sweden. Browse online and in-store today! IKEA has implemented technology in their business by providing their customers to see online catalogue, iPhone app and online shopping. In six decades of IKEA’s experience they have went through many challenges but the company stayed strong and focused on their policies and overcome all the hurdles which came across whether it was political, economical, social, legal, technological or environmental. It was established on the basis of low cost and it uses contemporary and trendy furniture for all types of people at budget-friendly prices. Selling ready to assemble furniture, Kitchen appliances and Home accessories. Looking for a flexible role? Comparing IKEA’s macro environmental factors using PESTEL analysis shows that IKEA has performed well by adopting new changes when required. IKEA mainly provide all sorts of home furniture and appliances. Consequently, if manufacturing can be done at a reduced cost to the industry, it will be reflected in the overall price of the completed products. With essay writing skills, why study in uk chevening essay ikea Ukessays, how to write a narrative essay with dialogue how to start a mystery essay essay on human service workers. The flat pack furniture system is well known by customers around the world as it is very quick and easy to assemble IKEA’s products. Essays on Ikea. Do you have a 2:1 degree or higher? To date, IKEA’s turnover of sales has netted over 23.8 billion Euros. You can view samples of our professional work here. On the other hand, the do-it-yourself approach can be considered a weakness for IKEA. Uk p30 fiction focus. This database contains thousands of cheap manufacturers who supply IKEA with the necessary manufacturing that is required for all their home furnishings. Essay Sauce is the free student essay website for college and university students. It is amazing to note that in its lifespan, a total of 699 million customers have visited its stores globally. To accomplish this vision to provide well-designed, practical or functional home furnishing products to its target market – the young, and low to middle class consumer, IKEA has implemented a combination of strategies in its operations. The IKEA concept started with a simple, innovative idea to offer home furnishing products priced lower than its competitors, by using cost-cutting solutions that did not affect the quality of its products. Study for free with our range of university lectures! Strength and weakness are internal part of the organization and can be changes where as opportunities and threats are external part of organization which is hard to change. Previous CEO of IKEA, this lack of customer service may begin to taint the IKEA catalogue attracts! Them to close down the business like IKEA don ’ t exist.h3 country! 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