Ikea 's Successful Entry Into The Furniture Retail Market

This paper aims to demonstrate a detailed description of the elements of ‘IKEA’ company based on its famous name in the furniture industry.

IKEA-products are extremely popular, there are very few people that never heard about the yellow-blue brand. Moreover, it will (even) be hard to find people that have no products from IKEA in their houses. This makes us wonder: “Why is IKEA so successful?” We will analyze IKEA’s marketing department to answer this question. We think IKEA’s marketing strategies are very unique and therefore an important factor causing IKEA’s success. Our main belief was that IKEA is a company with a great proficiency in pricing. However, after some readings about the company we discovered all the 4p’s of the marketing mix are very well developed and still very innovative. IKEA’s marketing strategies are based on its democratic design statement; “Democratic design brings good design to the many

Generating awareness in a new country is a very expensive task whereby you need unique techniques to help the community recognize IKEA as a company and the products it sells. The most common methods used were TV and radio advertisements, sending marketers to the markets to do the marketing one on one with the customers or the buyers in the community, and by putting up billboards and posters around urban areas. Due to its exposure in different countries, they had to train employees who have been working with the company for several years to learn foreign languages to help expand the company. This idea helped the company venture into a new country and do the marketing.

1. List IKEA’s external and internal challenges. Looking at IKEA’s challenges, which do you think pose the greatest threats? Why? How would you address

IKEA, is known around the world for its stylist low cost furnishings. However, developing and maintaining relationships in the U.S. market is paramount to its continued success. This assignment, will discuss whether value or image is the biggest reason for IKEA’s success. Additionally, I will discuss which is more important to it maintaining and developing relationships in the U.S. market. Notably, IKEA founder Ingvar Kamprad, started the business in 1943, as a mail-order business. However, in 1948 Ingvar started exploring making furniture, in 1951 IKEA’s first catalog was published. Moreover, in 1953 the first showroom opens, by 1955 IKEA is designing its own furniture. Additionally, in 1958 the first brick and mortar store opens in Sweden. Consequently, from the late 50’s to early 60’s Ingvar accomplished some successes and losses. Nevertheless, by the 1970’s the first IKEA store opened outside of Sweden, in the 80’s Ingvar realized he needed to plan for international expansion. Therefore, according to IKEA.com (n.d.), Ingvar separated the ownership of the retail operation from the ownership of the concept and the IKEA brand – to keep these separate roles in independent business groups, operating under a franchise system. Furthermore, Ingvar Kamprad thus donated a large number of the operating companies to a Dutch Foundation, the INGKA Foundation, which today owns many of the IKEA franchisees. Consequently, the franchise business model, with both franchisees owned by the

IKEA is a non-profit organization which differentiates its business structure compared to other furnishing companies. This structure gives IKEA two main advantages:

IKEA is one of the most successful manufacturing and retail furniture companies operating in today’s global marketplace. IKEA manufacture from the bottom up, top down furniture that offers environmentally friendly, state of the art designed furniture that is both affordable and attractive to its customers via their online, catalogue and worldwide distribution channels, with a logistics network that are low cost footprints with the enforces on cost efficiencies couple with technology, product design, excellence and customer satisfaction. IKEA was founded by Ingvar Kamprad in a small village in Sweden. Its Scandinavian–style home furniture offer attractive designs at affordable prices. And IKEA is obtainable from 275 stores

An article, written by Saabira Chaudhuri, presents Ikea’s most recent plans to expand their market. The information, released in this article, illustrates both strategic and marketing planning, evident in Ikea’s latest venture. As Michael Levens explains, in our text, “strategic planning identifies the overall direction of a business”, while “marketing planning includes those activities devoted to accomplishing marketing objectives”, further explaining that it “connects businesses to the consumers of its products and services” (32).

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 organization has mastered the art of doing business internationally and is considered to be one of the strongest global entities in today’s world. Although IKEA has succeeded on many levels, leaving the competition far behind, there are a few possible threats the company may face in the future while doing business:

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.

IKEA can establish their business by targeting both markets as their product range of interior furnishings are required by both households and business establishments. However, in either case, customers are the target for any company. To be able to find out the requirements of the customer is the challenge and is the area that the company needs to analyse

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 was founded in Sweden by Ingvar Kamprad in 1943. IKEA has been established around the world in 26 different countries. Within these countries IKEA has a total of 303 stores. This business is effective in adapting to change through the use of the four key business functions; operations, finance, marketing, and human resources.

The brand I will focus on for my project will be ‘IKEA’. My rationale in choosing IKEA is to examine how ‘IKEA” the furniture and home goods retailer as of 2016 without any major repositioning is in the #62nd, position on the Forbes List of ‘The World’s Most Valuable Brands’. Although the brand first opened its doors in 1942 (Frede, J, 2015), and currently holds the 62nd place on ‘The Forbes List’, the brand as of 2016 has experienced little or no growth in Europe or US markets. The brand, on the other hand, has lost its ‘cult’ status with the 18-44 target market and is hurting from the lack of convenient urban locations, making it easier for consumers to look to competitors i.e., Target, Pottery Barn, and Walmart for moderately priced furniture and home goods. As a prior employee with ‘IKEA, I believe using repositioning, I’ve identified several concepts for ‘strategically changing the distinct image and identity that its product or brand occupies in consumer minds’ (Schiffman. L, Wisenbilt. J, 2015 ).