Ikea Case Study

4544 WordsApr 22, 200919 Pages
IKEA CASE STUDY (Current Position, Value Chain Approach, Goes Forth) Word Count: 2,884 IKEA is the world’s largest furniture retailer, specialising in selling stylish, inexpensive, self assembly Scandinavian design furniture, home accessories, kitchens and bathrooms in their retail stores around the world. Delivering good quality contemporary design furniture to the middle class consumer is not the only focus of the IKEA group; it also sells a lifestyle that customers around the world recognise and embrace. IKEA is a global company that has invested and is present in many countries; it promotes its products and services using the same brand in all markets coordinated from its one main corporate office in Sweden which is responsible…show more content…
For example, IKEA monitors the legal obligations of its suppliers and shows its environmental responsibility through the partnership with World Wide Fund for Nature (WWF) on forest projects; in China it promotes the supply of word certified wood products through the identification of key preservation value forests. There always will be a vocal public minority who will be against IKEA’s huge showrooms that creates sometimes overwhelming competition for small local businesses, long lines, and local congestion. However, as long as IKEA remains customer oriented and cultururally focussed it will retain the upper hand. Price With further global expansion, in order to maintain profitability it was crucial for IKEA to establish the main potential customer group, who would not only appreciate the product concept but will be able to afford it and recognise it as being a "good-value”. The IKEA concept proved to be successful in the developed countries and free trading markets, but the same acceptance can’t be anticipated in the countries with large variations in exchange rates, high inflation and/or high import tax and other restrictions, e.g. bureaucratic obstacles in Russia and China. Necessary product modifications can have implications on price, whilst the same product would need to be sold at a lower price in developing countries. IKEA lowered their margins per unit sold to gain overall targeted customer acceptability, which can result in an overall

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