The brand I will focus on for my project will be ‘IKEA’. My rationale in choosing IKEA is to examine how ‘IKEA” the furniture and home goods retailer as of 2016 without any major repositioning is in the #62nd, position on the Forbes List of ‘The World’s Most Valuable Brands’. Although the brand first opened its doors in 1942 (Frede, J, 2015), and currently holds the 62nd place on ‘The Forbes List’, the brand as of 2016 has experienced little or no growth in Europe or US markets. The brand, on the other hand, has lost its ‘cult’ status with the 18-44 target market and is hurting from the lack of convenient urban locations, making it easier for consumers to look to competitors i.e., Target, Pottery Barn, and Walmart for moderately priced furniture and home goods. As a prior employee with ‘IKEA, I believe using repositioning, I’ve identified several concepts for ‘strategically changing the distinct image and identity that its product or brand occupies in consumer minds’ (Schiffman. L, Wisenbilt. J, 2015 ). Target Market IKEA’s, target market are considered ‘the millennials’ the 18-35 demographic, male and female and middle and low income are greatly attracted to the wide variety of well designed, hard to pronounce, functional merchandise. To attract them, Will Mckitterick, a research analyst at IBISWorld, stated “Ikea has stepped up its strategy for accommodating small living spaces, whether in Moscow, Tokyo or New York City, which should go a long way toward appealing to
Click here to unlock this and over one million essaysGet Access
The most important and significant ownership advantage of IKEA is their brand value. With a brand value of 15,885 million USD, IKEA is ranked 26th on the top 100 of Interbrand’s Best Global Brands. IKEA had an increase in sales and operating income in 2013 of respectively 3 and 15 percent (1). Interbrand uses three key components to evaluate the brands. The first key component is a Financial Analysis which measures the economic profit of the brand. Economic profit is the difference between the earned revenue and the opportunity cost of the input (2). The second key component is the Role of Brand or in other words the influence on customer choice. Role of Brand measures the proportion of the decision to purchase that is attributable to the brand relative to other factors. Applying Role of Brand to forecast profits gives the earnings attributed to the brand alone. Interbrand’s last key component is Brand Strength, which is a diagnostic tool for measuring brand performance relative to competition. It supports brand management with identifying areas of highest business impact (3). Applying these three analysis on the brand IKEA backs up the claim that IKEA belongs in the top 26 of firms with the highest Brand
The philosophy states “ Our vision is to create a better everyday life for the many people. Our business idea is to offer a wide range of well-designed, functional, home furnishing products at prices so low that as many people as possible can afford them.” IKEA needs to create products following this motto but have these products molded to the tastes and styles of the U.S. population. The prices must still be low but IKEA must force the message that even though the price is low that does not mean the quality of the product is poor. This message will be key for expansion in the U.S. to be a success. IKEA must maintain their shopping experience as that is a strong competitive advantage, and tweak their philosophy so it fits the American lifestyle. If they do this then they will have success in expansion.
This report analyses IKEA’s issues, drawbacks and its implications in the global market. Along with reasons behind the furniture giant’s pitfalls, presented are a few solutions to overcome these drawbacks.
Strengths are company resources that represent competitive assets. Next to this strengths are very important for a company’s competitiveness and ability to succeed within a market. IKEA’s strengths can be defined as following;
Since its 1943 establishing in Sweden by Ingvar Kamprad at 17 years old years, IKEA has offered home furniture and frill of good outline and capacity at low costs so most of the general population can manage the cost of them. IKEA 's vision is to: "Make a superior regular life for the numerous individuals" Its business thought is "To offer an extensive variety of all-around outlined, practical home outfitting items at costs so low that whatever number individuals as could be expected under the circumstances will have the capacity to bear the cost of them"(IKEA 2004)
market as many consumers actively buy into the cost-conscious mentality. Furthermore, the standard of living is higher than most countries. Quality is highly important as consumers are driven by value and demand quality products (Ferrell & Hartline, 2014). Ringstrom (2016) acknowledge that, IKEA relishes in the fact and status that they are a place for individuals that enjoy value and have thin wallets. The goal is to make customers and potential customers aware of their higher-quality goods all the while maintaining a popular appeal. They essentially build their success from low priced goods and
The debate about standardization and adaptation for international markets has continuously attracted more attention from multinational companies for several years. 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.
Looking into the sourcing of a multinational company is very important as we would know risks of investing on that company well. Inter IKEA Holding S.A. is a fully owned by Interogo Foundation in Netherland, which is an enterprise foundation registered under Liechtenstein law. It has no listed their shares on any market in world, the company elaborates that, they wish to create ownership structure that stands independence and long-term approach. Their profit will only be reinvested into IKEA Foundation for charitable purposes and keeping purpose for future investment. As a result, they used Euro (€) as their main currency.
IKEA is known for its affordable and innovative product. IKEA was founded in 1943. IKEA home furnishing product also known for its light weight and the easy steps to assemble their products. IKEA name was form by the initial of the founder Ingvar Kamprad (IK). The places he grew up, Elmtaryd and Agunnaryd (EA). (Ikea.com/sg)
Ikea – the world’s top furniture retailer with its annual turnover $37.8 billion is larger than the GDP of some nations such as Serbia (msn, 2015). In the era of digital marketing, website is one of the most efficient and powerful tool that can help a company reach out for customers outside domestic market to expand sales. With the business steadily spreading throughout the world as it has operations in 43 countries at the moment, Ikea has done a very good job in generating a multilingual website that attracted 1.9 billion visits during 2015, up 21% from 2014 and contribute about $1.2 billion in 2015 sales revenue (Ikea, n.d.). For better understanding how Ikea’s website functions can contribute to the increase in sales, this paper will provide subjective analysis on the site based on its design and appearance, navigation and content and giving some recommendations on how to improve the site to make it more user-friendly.
The world’s biggest home furnishing retailer has 298 stores in 37 countries. It ranks Number 41 on Forbes’ reputable World’s most respected Brands list, and took in thirty 5.5 billion in sales in 2013. IKEA has actually come back an extended method in its sixty years of business since its 1943 start in Kingdom of Sweden.
IKEA is targeting at two groups of customers. The first target group is the young adults from low to middle income family who may have or have no children. The other target group is business customers and they are normally running small to medium size of offices.
IKEA is a manufacturer of home and business furnishings who offer interior furnishing products to consumers in several countries across the globe. Before IKEA plans on expanding and entering any new market, they are required to obtain a clear understanding of what consumer behaviour and requirements are in that particular market. There are basically two types of Markets which include Consumer Market and Business Market.
In august 2008, IKEA had total 253 stores where 560 million people visited. Here the total sales became 23 billion Euros. Considering 20% sales profit here IKEA’s average customer per store and cost per store are given below: