Case Study Ikea

As explained in the “bargaining power of consumers”, it is hard to substitute the products that are offered by IKEA. This is further intensified by the fact that IKEA has formed a brand perception that makes it stand out amongst its

Considering the previous mission statement with a unique customer vision IKEA is clearly antagonistic with specific customers’ needs. That lack of adjustment to customer needs is the main reason for not getting the same results in China than in Northern Europe.

IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international

Being one of the leading Companies in Furniture, IKEA offers an extensive variety of decently composed, useful home outfitting products at costs that are reasonable to individuals who are attracted to their Swedish design. This is the real trick which led to IKEA’s success, advancement in product design development, targeting proper designers and suppliers to how they offer their products in IKEA stores. Over the past six decades, IKEA went from the cozy forested areas of southern Sweden to being a one of the largest competitors in the retail industry in over 40 countries around the globe. The story of IKEA began in 1926 when organizer Ingvar Kamprad is conceived in Småland in southern Sweden. He is raised on 'Elmtaryd' where he began his entrepreneur skills by selling matchsticks as a source of income where he discovered bulk purchases at discounted rates and learnt how to expand his inventory which in turn led to IKEA. IKEA expands their markets, for example, Japan and Russia. Everything from the

In a very competitive market, IKEA remains industry leader over the years and decades. The reason why IKEA have the capacity can continue as an industry leader is IKEA able to maintain their Vision “to create a better everyday life for many people,” customer trust and love IKEA vision with their low-price. In this report, will be analyzing Porter’s five forces and value chain analysis. The two tools will enable readers to have a clear understanding on IKEA form internal value to external value, which included not limited to primary activity, secondary activity, internal power, external power and threat of substitution. Bygone through these points above, readers can identify and understand IKEA operational details and strategy they use.

A different approach about Ikea’s success is given by Sara Kristofferson in her book Designed by Ikea, London 2014. In the first chapter, Kristofferson refers to the relationship between the swedish goverment and Ikea.

IKEA’s vision is to design a better life at home. Making it affordable as possible so that many people could have admirable furnishing. IKEA use function, quality, design and value to obtain their customer needs. IKEA learn to synchronise the contingency of the supplier and needs of the customers. Using that strategy to sustain the low prices. In order to gain a good condition of a product, IKEA go in for highly automated production. Together with mass producing and keeping long-term relationship with the supplier, IKEA is able to prolong their vision and aim to serve their customers. (Ikea.com/sg)

IKEA is the largest furniture chain in the world, and in 2011 the Swedish company operated over 270 stores in 25 countries. In 2011 IKEA sales soared to over $35 billion, or over 20% of the global furniture market. Most of its stuffs believed IKEA will massive growth throughout the world in the coming decade because IKEA could provide what customer wanted: good design, and good made contemporary furniture with an affordable price. In one word, IKEA’s global approach focuses on simplicity, attention to detail, cost consciousness, and responsiveness in every aspect of its operations and behavior. (Jones, 2013)

IKEA is recognized as one of the reputed brands of Sweden, operating in the segment of ready-to-assembled furniture’s, fittings, appliances, and many others designed accessories and equipments. Although it entered in this segment in the year 1943 in Sweden but very quickly it expanded its operations in the markets of China as well. It is mainly due to its modern architectural stylish designs and eco-friendly nature. This helped Ikea to improve its brand image and profitability by almost 50 percent as compared to previous years. This proved extremely effective for Ikea to enhance its customer bases and reliability in the market among many other rival players (Inter IKEA

There are many things to the secret of IKEA’s success. There is the design of the store which requires the customers to walk a long way before reaching the exit. The lack of customer service requires customers to shop alone without interruption. IKEA also has an interesting coffee shop that supplies Swedish meatballs and orange juice to hungry shoppers. Interesting is the simple furniture which requires assembling by the purchasers. All of

IKEA mission is to offer consumers good value for their money. The typical IKEA customer is young low to middle income family. IKEA success in the retail industry can be attributed to its vast experience in the

Human: IKEA employs over 123,000 people worldwide; a decline of 5,000 personnel decline from 2008. In North America there are approximately 15,500 employees. IKEA is bouncing back from the recession and with that new job opportunities are posted everyday on their website. At present they are looking to hire 98 people for varying positions across North America. Human resource retention a strategy for the company to reduce costs and hiring within is encouraged. Experience: IKEA was established almost 70 years ago, and the original founder still participates in some activities. Experience is also derived for the Board of Directors. Relationship with Customers: IKEA truly takes care of their customers, and their customers are brand loyal. Some of the current strategies they have in place to satisfy customers are their services offered in store, like childcare, and also 90-day return policies, and customer service contact information. On the market research website SocialMention.com, IKEA has a 5:1 sentiment rating; this is the ratio of people on social medias that write about the brand in a positive way. Relationship with Suppliers: IKEA has developed a name for building very strong, long-term relationships with its suppliers. It currently works with over 1,400 supplies across the globe. IKEA tends to

IKEA’s strategy before the mishaps in America could be characterized as going against the norm charting their own path to success using low priced manufactures to secure lower selling prices aimed to target those who were of older age and of middle class standing. Their new strategy was to target those of a younger demographic, young married couples, college students, and 20-30 something singles. By reemphasizing design, promoting through hip quirky advertisements, and encouraging consumers to do away with their old furniture, IKEA revenues doubled in a four-year period. IKEA today has adapted somewhat of a local customization strategy where their store layouts will resemble that of many local household layouts as proven by their success in China where they failed to expand beforehand. They also keep their prices extremely low in some areas as China by sourcing a large percentage of products in the area of operation.

The Swedish firm, IKEA, is still investing heavily on physical stores however the Germany head IKEA Group expects 10% sales to come from e-commerce. IKEA is reluctant, at this moment, to embrace e-commerce because it wants to give the customers a shopping experience, such as cafes with play areas as well as driving incidental purchases of high margin accessories. “When associates are engaged and energized, they bring a brand to life through

IKEA vision is “To create a better everyday life for the many people. We make this possible by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”. (4) One of those keynotes is to create a range of low prices products that make as many customer will be able to enjoy IKEA services. To achieve this vision IKEA is keep seeking hard the best procurement environment.