Ikea In china
Table of Contents
Introduction
IKEA is recognized as one of the reputed brands of Sweden, operating in the segment of ready-to-assembled furniture’s, fittings, appliances, and many others designed accessories and equipments. Although it entered in this segment in the year 1943 in Sweden but very quickly it expanded its operations in the markets of China as well. It is mainly due to its modern architectural stylish designs and eco-friendly nature. This helped Ikea to improve its brand image and profitability by almost 50 percent as compared to previous years. This proved extremely effective for Ikea to enhance its customer bases and reliability in the market among many other rival players (Inter IKEA
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Apart from this, as customers are offered highest attention, so best sort of shopping experience is offered to them (Porter, 2008, pp. 123-134). A very nice and comfortable atmosphere is created within the stores of the Ikea in order to make the customers more dependable or reliable over the brand. Due to these reasons, the organization and the products of Ikea is offered high preference by the customers of China as compared to other competitors.
Conclusion
Conclusively, it might be stated that, the organization of Ikea positioned itself as one of the reputed brands among others by modifying its designs and styles. This proved extremely effective for the organization thereby amplifying its profitability and market share as compared to many other rival players of China. Moreover, the customer services offered by the organization of Ikea are also another reason for the improvement of its competitive position in the market of China.
In addition to this, the prime reason for the success of Ikea in China is the strategy of maintaining premium prices for its designed and trendy products, so as to attract a wide range of high-class customers. This proved extremely effective for the organization of Ikea in the market of China as compared to Europe. Along with this, promotion of the stylish and designed products helped the organization of Ikea to increase its demand and profitability as
IKEA is considered to be a low cost, high quality producer in the furniture industry, therefore it is important to
Founded in 1943 by Ingvar Kamprad, IKEA is, over 60 years later, the world largest furniture retailer, providing products in a flat packing concept and at low prices. They have 226 stores in Europe, Asia, and America with revenues of $17.7 Billion as of August 2005. 70% of their marketing communication is based on their famous annual catalog. There are many environmental factors that affect IKEA’s global and domestic marketing decisions. An analysis of those factors, the influence of the global economic interdependency and the effect of trade practices and agreements, the demographic and physical infrastructure, the cultural differences, social responsibility and ethics versus legal obligations, the effect of political systems and the influence of international relations and the Foreign Corrupt Practices Act of 1977, and finally the effect of technology are discussed herein.
In this report I will be examining Ikea in the Chinese market. First I will carry out an analysis of the company using Porter 5 Forces and SWOT frameworks. After this I will highlight the key issues of IKEA in China, which I will discuss market entry of IKEA in China. Finally, I will discuss my recommendations for IKEA in the Chinese market. Appendix and references therein.
To answer this question the current situation of IKEA will be taken into account in this report. Next to this also other aspects like a SWOT analysis and other theoretical information will be used to come to conclusion, recommendation and possible implementation.
The target group of IKEA is consumers with limited financial income. Therefore, this economic situation will impact and influence IKEA’s business due to a slow down consumer spending and income reduces.
IKEA is a manufacturer of home and business furnishings who offer interior furnishing products to consumers in several countries across the globe. Before IKEA plans on expanding and entering any new market, they are required to obtain a clear understanding of what consumer behaviour and requirements are in that particular market. There are basically two types of Markets which include Consumer Market and Business Market.
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.
Product – In terms of product, the author will perform an analysis among the IKEA competitors and identify whether this product line is appropriate or not. Is this product line serves the customer expectations? In addition, the author will provide recommendations on the changes should be made in how the products are being handled where applicable and necessary.
the China market IKEA China has been allowed to exceed and expand its sourcing of
Ikea is not only a furnishings market brand, but also a furniture brand. Through a series of operations, in people 's eyes, Ikea is not simply a purchase house ware places, it represents a way of life. In our mind, Ikea 's success not only depends on its integration of the trade, logistics, but it used to integrate the core idea of trade, logistics-lifestyle (Margonelli, Lisa 2002). As we said before: using Ikea’s products is just like eating McDonald 's, drinking starbucks coffee, becoming a symbol of a lifestyle.
Touch experience play an important role for the perception that respondents have towards IKEA. The most common and interesting phenomenon is that always see people sleeping on the bed, sitting on the sofa chatting with friends and hold the pillow. Our respondents said that they like this kind of experiential shopping which they could touch and experience everything in IKEA that make them feel good.
At the outset, it may be useful to characterise IKEA in terms of the characteristics of demand (also known as the four Vs, see Slack et al. p 20). First, IKEA is clearly a high volume operation – as indeed most international retailers are – which lends to systematising operations but which implies capital intensive processes and therefore cost considerations will be crucial. Second, IKEA offers a large number of products (up to 14000 depending on the country/store) so there is high variety in the
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.
Considering the previous mission statement with a unique customer vision IKEA is clearly antagonistic with specific customers’ needs. That lack of adjustment to customer needs is the main reason for not getting the same results in China than in Northern Europe.
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)