Ikea in China

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.

* 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

The research findings have been crucial to IKEA’s success in global expansion, having pointed out many differences in homes worldwide, that IKEA has integrated into their product mix to new markets. For instance, it found that in China their sofas were being used as a backrest when people sat on the floor (FORTUNE, 2015). The company could then adjust the product to this specific use in order to improve its quality for Chinese customers. Additionally, research has shown that in cheap labour markets, such as China, the famous DIY-approach of IKEA is not as popular as it proved to be in Europe. IKEA responded by putting a focus on lowering the price of their assembly service. (MILLER, Paula M.,

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’s low-cost structure is the very essence of their success. It keeps the company profitable while other competitors struggle to survive in the market and the weakened economy. IKEA has continued to see positive revenue growth. Their other competitive advantage is treating the environment with care and concern. They are rated in the top 100 companies to work for by Fortune magazine and by offering a fun work environment for employees to maintain

Today IKEA is progressing towards being one of the top furniture retailers in the world. In 2002, they served 286 million customers through 154 stores resulting in $12 billion in revenue. Although IKEA has several stores placed around the world, they are not always thought of as the most popular furnishing store in America. All the stores are self-service and are based on a do-it-yourself shopping experience. There are few contacts with customer service representatives within the stores, except for when the customer enters the transaction phase of their buying experience.

Ikea has established strong branding with wide range of stylish products. It focus on offering low-priced and affordable furniture. The furniture is easy to assemble and ship. It offers one-stop shopping and featured the amenities as playrooms for children and Swedish cafes, bank and enough parking spaces. It creates a friendly atmosphere and services to shop and design the store layout for a nice journey of shopping. It has strong global sourcing capabilities.

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.

Ikea offers a wide range of home furniture and accessories, from bedroom furniture to kitchen appliances. It also has a wide variety of style which it represents in all of the various showrooms within the store. It’s able to produce low price products that are high in quality.

IKEA’s financial position in year 2014 has increase compared to the previous period of time. Due to Ikea’s solid financial position, the company is able to commit to considerable R&D expenses to further strengthen its global marketplace. It can play an important role of cushion in times of downturns and decrease in

1. Design- IKEA designers work in exactly the opposite way from their competitors. They design their products in such a way so that they can keep the prices low. IKEA designers design every product starting with a functional need and then decide on price. With the help of their vast knowledge in innovation and low-cost manufacturing processes through a large network of suppliers, they design the final product which can fulfill consumer’s functional needs. Large volumes are purchased to push prices down even further by distributing the R&D cost. Most IKEA products are designed in such a way so that they can transport in flat packs and assembled at the customer's

Value is the biggest reason for IKEA’s growth and popularity. The overall concept acknowledges that IKEA provides functional well designed furniture at low prices that makes it affordable for as many people possible. This helps create a better life for many people (Ferrell & Hartline, 2014). IKEA implements designing products that are stylish, functional, and essentially low in cost, however, customers must assemble themselves. The furniture is shipped in flat packs to save money in manufacturing and distribution and then passes it on to customers in lower prices at retail.

Ikea is a renowned global furniture retail shop that was established by Kampard Ingvar in 1943(Bartlett, 2006). The business began as a grocery and stationery of mail order and later turned into furniture as its main business. Currently, it has over 292 branches in 34 countries globally. Ikea has been operating on the motto “better life for everyone”. Ikea focuses basically on good quality of household furniture and low prices of goods. Ikea strives to build a good social benefits structure and good customer care.

IKEA established itself as the largest furniture retailer in Sweden by the early 1970s by reinventing the wheel of furniture manufacturing at that time. Majority of furniture manufacturers in Sweden produced expensive products with designs that were basic or passed down generation to generation, additionally other manufacturers stores where located in downtown congested areas. IKEA’s strategies which consisted of low cost low priced furniture, brave intricate designs, self-assembly,

* It’s playing in a free market segment, in which only appear two strong players, retailers normal range and other high-end retailers, basically segmented for the sole purpose of design and range. In that IKEA can enter a new position that could almost say that would be unique, not only combines the range and design if not a series of factors such as the relaxation in the various restaurants, and other activities that do get results not seen before.