Ikea Marketing Analysis : Ikea

Unfortunately, for IKEA, I am well-aware of its main weaknesses, which are; its limited product designs, and its DIY concept for customers that prefer items assembled. Essentially, this weakness provides Zappos with a unique opportunity to capitalize on the market of unsatisfied IKEA customers. For example, Ferrell & Hartline (2014) explains that, “some customers may not appreciate IKEA’s do-it-yourself approach. Moreover, IKEA targets young, cost-conscious customers who want stylish furniture. However, these same consumers also like convenience and usually have the money to pay for it. Consequently, for them, the time and effort involved in shopping for furniture, bringing it home, and assembling it may not be worth it. Furthermore, some customers enjoy having a conversation with a salesperson and getting individual ideas and advice from employees. Therefore, these customers may continue to buy furniture from traditional retailers” (p.498).

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;

As IKEA stores are located away from the urban areas, many customers may only patronize the stores during weekends. Hence, the store may be relatively quiet during the weekdays and highly packed with shoppers over the weekends. In the case of IKEA, although it adopts the self-service concept in their stores, it actually still maintains a high level of contact with their customers. To ease and facilitate consumer’s shopping, IKEA provides catalogues, measuring tapes, shopping list and pencils. In addition, IKEA stores are designed to have a ‘family shopping experience’ with customer services and facilities such as a restaurant, day care facilities and a Swedish shop. Parents can leave their kids in a supervised play area, or keep their children with them in pushchairs provided (Slack, Chambers and Johnston, 2007). The key point about IKEA is that it is different to the rest of its industry. In typical furniture stores similar products are grouped together and the final delivery of products to customers may take several weeks.

IKEA is a business that designs, produces, and sells a furniture to the worldwide market. The company was founded in 1940s in Sweden by Ingvar Kampard (Milestones, n.d.). IKEA brand has been known by customers and become to the world’s largest furniture company. In 2016 IKEA sales increased by 7.9% and total sales amounted to €34.2 billion. IKEA stores are in 28 countries and more than 340 stores. Also, it has an online shopping available in 14 countries (IKEA Group, 2017). A good perspective of IKEA founder has driven the company to be accepted in the marketplace. Kampard has used the word “together” for inspiring the company and IKEA employees to work in the same way. Several reasons have built IKEA more achievement and managed the global environment in terms of operating business, saving cost, managing employees, and expanding IKEA in a new country.

TLMBA 2012-2014 Strategic Management Final Exam Ana Tomaz – 153 012 155 1 Furniture retailing market Japan 50% China 17% Latin America 2% 8 €/inh. Brasil 65% 400 Bi euros in 2012 Others 2% Asia 18% EU 25 45% NAFTA 33% 210€/inh. Imports 9,5% 165€/inh. Imports 32%( 20% from Asia and 5% from Europe) 1 – Furniture retailing business analysis and its KSF Macro Environmental Analysis 2 Furniture retailing market Schools, hospitals, hotels and churches

IKEA’s success is thanks to their constant adaptation to up-and-coming marketing trends.  Being that the global retail space has a large online component, a store such as IKEA that sells furniture products that are preferred to be seen and purchased in person could struggle to adapt to become an online retailer.  IKEA has to create and maintain a phenomenal online presence and marketing plan in order bridge the gap between ‘clicks and bricks’ – the e-commerce versus the brick and mortar store.  IKEA’s website states that, “Marketing allows us to reach the many people to explain the IKEA offer to them.  IKEA wants to reach the many people on each local market.” (Getting, 2016).  To

The most important core competencies of IKEA is their ability to design furniture and interior products with a strong focus on a nice and appealing design combined with the lowest integral costs. IKEA uses its open warehouse and self-service approach as a USP (unique selling point), while at the same time it reduces space requirements and thus costs. Their unique level of core competencies enables IKEA to use their formula Europe – and even worldwide. IKEA developed the recombination ability via learning by doing. If necessary, IKEA redesigns its products to local habits and demands and is also able to adapt its routines. For

This was Mikael Ohlsson, IKEA’s Chief Executive, speaking in 20121 while reporting a sales increase of 6.9 per

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)

Marketing Function is Typical marketing function types within a more substantial business includes executing general market trends, making marketing plan, and product development, market development, market penetration as well as strategically caring for advertising, distribution on the market, costs, after sales customer support and pr. Operations Management is Procedures management involves planning, organizing, and supervising processes, and make necessary improvements for higher profitability. The modifications in the everyday businesses must support the company's strategic goals, so they are preceded by deep analysis and description of the current techniques.

As IKEA is expanding rapidly around the globe, it faces a number of challenges in terms of varied cultural, demographic and market specific needs. The 'one-design-suits-all' global expansion strategy might not be suited for the culturally diverse markets, yet the brand is perceived in a similar way by the customers around the globe exhibiting low price as the core brand value. As IKEA expands globally, the branding strategies revolve around providing value (quality and design) to the customers at affordable prices.

Consumer behaviour is defined as the study of customers and the methods that they take to choose a product or service. Marketers spend millions of dollars in research of consumer behaviour and the creation of consumer strategies. These consumer strategies are used in different industries to improve the image of a company and increase their sales. These strategies increase a customer’s desire for a particular product, and can often confuse them into believing that their product is a necessity. This is how small businesses are able to become wealthy global industries, such as McDonald’s and IKEA.

IKEA is a multinational group of companies, specialized in designs and sells home furniture (ready to assemble). They also sell accessories, bathroom & kitchen items and lately they have offered food market in their retail stores around the world. It was founded by Ingvar Kamprad who born in southern Sweden in 1926 and who was listed as one of the world 's richest people in 2013. The company is known by its modern (simplicity) design, cost control, operation details and continues product development. Today, IKEA owns and operates 225 stores in more than 30 countries. IKEA have a very nice catalogue, published in twenty languages. It is their main market tool for the retail giant.

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:

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.