IKEA Case Study Pirsoi Teodora C1

* IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring

3. What environmental forces have created challenges for Mattel as it continues expansion into global markets? Which markets have created opportunities?

This paper aims to demonstrate a detailed description of the elements of ‘IKEA’ company based on its famous name in the furniture industry.

4. What’s your interpretation of the company’s philosophy posted prominently over the door of its design studio? What does it say about innovation?

The services and products offered by IKEA provide value to its customers in various ways. For one, the products and services are very affordable. The products and services are not priced highly and therefore, the average customer can enjoy them. At the same time, the products are of high quality. From IKEA’s slogan “low prices but not at any price”, it is clear that the company prices its products lowly but that does not mean that the quality is compromised. IKEA satisfying its customer’s needs through providing them value for their money as they provide quality products that will last for a long time, and at affordable costs. The fact that the company has set the minimum acceptable standards for its wood, implies that it is also keen on quality and on the environmental impact of its action of making furniture ( Edvardsson, Enquist & Hay, 2006).

The success of the industry was the huge experiences in the product differentiation, cost leadership and retail market. IKEA unique concept is that furniture is sold in kits that are assembled by the customers at home. The company remains one of the world most successful multinational retailing firms, operating globally. This report will explains IKEA internal and external environment using PESTLE, PORTER FIVE FORCE AND SWOT. Furthermore IKEA globalisation and localisation strategy breakdown will be examined, CSR and ethic and recommendation will be also examined.

While the company, CEO, and staff were all dedicated to the nine cornerstones of the business there were still some issues that IKEA would have to deal with, suppliers and sub-suppliers. IKEA ran into trouble in 1981 in Denmark when government regulation was changed with regards to formaldehyde emissions for building products. When

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

IKEA is one of the largest multinational companies in the world dealing with several products. The company sells and designs furniture appliances and home accessories at an affordable price. Ikea has over three hundred stores worldwide enjoying the good name it has created for itself. While they are one of the most profitable furniture companies in the world there are significant challenges and threats that have been overcome and are still needed to be tackled.

1.      Until now, IKEA’s international marketing strategy has been centrally controlled by corporate headquarter. However, the case study identifies a number of challenges facing the company including culture and demographic differences around the world. How should IKEA react to this challenge?

Like any teenager, this 17 year old Kamprad do his sell from home for the first year and his customers can do mail order for the product. On 23rd March 1963 IKEA made the move to other area outside Sweden and that was in Asker. Now year 2006, the store is expanding and is also under renovation and remodeling. IKEA 's international mission is to provide the world with the most comfortable household products and decors as well as their motto is "Affordable Solution for Better Living" (http://en.wikipedia.org/wiki/IKEA).

IKEA also based on low cost to achieve hybrid strategy. Big items are all flat-packed that the customers transported and assembled themselves. This saves IKEA with shipping costs from suppliers and delivery costs to customers so that they can pass this benefit to customers through low price. In the stores, there are no armies of sales staffs. Customers are providing with tape measures and pencils so that they can self-served. This reducing the number of sales staff required. IKEA encourages customers to create value for themselves by taking on certain tasks traditionally done by the retailers and their low expectation on service levels keeps costs down. Additionally, IKEA choose most economical suppliers over traditional suppliers around the world. The company buys great volume of materials from suppliers to get the economies of scale. Since the labour in UK is expensive, their products are produced in

The organization has mastered the art of doing business internationally and is considered to be one of the strongest global entities in today’s world. Although IKEA has succeeded on many levels, leaving the competition far behind, there are a few possible threats the company may face in the future while doing business:

Based in Denmark, IKEA International A/S is one of the world 's top retailers of furniture, home furnishings, and housewares. The company designs its own items, and sells them in the more than 140 IKEA stores that are spread throughout approximately 30 different countries worldwide. The company also peddles its merchandise through mail-order, distributing its thick catalogs once a year in the areas surrounding its store locations. IKEA is characterized by its efforts to offer high-quality items at low prices. To save money for itself and its customers, the company buys items in bulk, ships and stores items unassembled using flat packaging, and has customers assemble many items on their own at home. The company is owned by

The next one will be the economical environment. During the economic recession, most people don’t want to spend too much. Customers will think twice before they pay for the product. IKEA have the advantage that the price is very reasonable for the general public. They can