Ikea - Global Marketing Report

IKEA is an abbreviation of Ingvar Kamprad Elmtaryd Agunnaryd. The initials come from the name of the founder, the farm where he grew up and his home parish. The firm has grown rapidly since it was founded in 1948.

As previously stated the buyers in the furniture manufacturing industry are furniture retailers. Therefore they will require furniture to continue business. There are no substitutes that provide the same use as furniture. In relation to the furniture industry as a whole, there are still very little substitutes to furniture aside from a higher use of closet space or unorthodox measures by consumers. An example of this would be one's choice to live without furniture, which in most cases is very unlikely. Furniture has become a household necessity and consumers have little or no desire to change their lifestyles by eliminating that need. Therefore the threat of substitutes to the furniture manufacturing industry is very low to the point where it is almost non-existent.

Despite being well-established, over the last three years, sales at Atherley Furniture Company have remained the same while profits have declined by almost 24%. Their chair division produces three different types of chairs, the Atherley, the Caledonia and the Parkdale. Each model has its own production plan and production costs. The increasing production costs, alongside the intense competition the company faces, have become a great cause of concern for John Atherley.

The household wood furniture industry is healthy and growing. Total industry sales in 2007 were estimated to be $31 billion at manufactures prices. Three categories of furniture divide the industry. First upholstered furniture which makes up 50% of sales, Secondly wood furniture at 40% of the industry market share which has grown 2.5% in 2007 and is projected another 4% in 2008, this second category includes dining room and bedroom furniture. Third and last is the other category at 10% this includes ready to assemble and casual furniture. Haverwood has established themselves as a medium to high priced furniture company through 1,000 carefully selected high

Today’s world is facing strong influence of globalization in each and every aspect of our lives. It is expressed through: free trade agreements, foreign direct investments, international trade, facilitated movement of labour, capital and resources, as well as a strong competition that eventually gives more power to customers. In addition, it resulted in the economic boom of the developing countries, with substantial dominance of China that mainly benefit from their massive labour force, its low cost and high comparative efficiency. This phenomenon has impacted all industries around the world. In particular, furniture production is going through a trend of moving to China that “in 2002

Companies should invest in ergonomically correct furniture because it will earn them money in the long run. Workers will be sick less often, be more productive, be absent less and quit their job less often. Workers will be sick less because of less dust in the air around them and will be injured less because ergonomically correct furniture drastically lowers one’s risk of musculoskeletal and other injuries. They will be more productive because they are happier, healthier and not be fatigued or sore from incorrect posture or equipment. This will also lead to them calling in absent less as they enjoy work and are not injured or sick from the workspace. Finally, there will be less employ turnover because the employs will be happier and will love coming to work.

* Furniture industry comes under an oligopoly market, where there are a limited number of sellers.

I figured being a furniture salesman would be a smooth, and easy job while I was studying for a degree in intelligence. I learned very quickly, that the area that I am currently in is not so friendly on the furniture market. People use furniture every day; when you wake up in your bed in the morning, sit at a table to have breakfast, or relax on the couch after a long day, it is scattered all over your house. In 2013, the furniture industry sold over $101 billion, making it one of the most popular, and best-selling commodities in the United States (U.S. Furniture Retail, n.d.). The market for this product can be a very interesting, and dependent market, especially in my area, Fort Myers, Florida (Southwest, Florida or SWFL).

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).

In this business report on the global retail business IKEA, it will cover the nature of business, influences on operations, operation processes, operation strategies and how the business can sustain competitive advantage. IKEA was founded in 1943 by Ingvar Kamprad in Älmhult, Sweden. The business established after and with the money his father awarded him for succeeding in his studies, Kamprad sustained a cash inflow by selling pens, wallets, watches, picture frames, table runners, jewellery and nylon stockings at reduced prices to customers. Although, later on in 1958, IKEA was introduced as a leader of Swedish Furniture Company as they started to produce local furniture by the Swedish local manufacturers, which gained positive attention from their customers. Eventually, developing flat packs of furniture for storage and self assembly, making their signature style of IKEA and turning the small business into a global sensation.

The stores have restaurant, childcare facilities and plenty of parking. Customers can drop off their kids at the playroom and have delicious meal when they are tired. All of these not only provide customer with a comfortable shopping environment but also let them make an ‘IKEA trip’ and enjoy the fun of buying. Besides, IKEA’s distinctive show rooms help creating differentiation. Products are strategically placed in different small spaces like rooms which allow customers imaging this furniture in their own home. This makes everything looks more attractive.

the China market IKEA China has been allowed to exceed and expand its sourcing of

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

In PEST analysis, we will look into what will be affect by the business environment. It includes political environment, economical environment, social environment and technological environment.

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: