International marketing: Ikea is Swedish and international company found by Ingvar Kamprad. IKEA designs and sells ready to assemble furniture and home accessories. The sources of IKEA’s successful entry into the furniture retail business were IKEA’s low prices and quality. Kamprad began selling furniture in his mail order company. Later he turned it into a business.
Their 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 will be able to afford them”. (Business concept, 2015) Private held The IKEA Group has been privately held by the founder of the company Ingvar Kamprad. All funds has to be either re-invested in the company or has to be donated for charity purposes. (Franchise structure, 2015) Opportunities Expending online sales In order to sustain its competitive advantage, the IKEA Group needs to expends its online
Ikea was founded in Sweden since 1943, IKEA has offered home furnishings and accessories of excellent style and performance at low costs, so the majority of the people can afford them. Ikea is the largest furnishing company in the world. The company known for its modern high quality furnishing, many people now buy their furnishing because of its high quality and lower prices which many furnishing companies failed to achieve both. Ikea now owns and operates 351 stores in 46 countries around the world. Also, Ikea is the most popular for college furnishings and its one of largest users of wood in the retail sector.
Some of these suppliers, in the Swedish Forests around the origin of IKEA, have been working with IKEA since its most punctual days. This empowers them to make the essential speculations and to guarantee the supply of crude materials over a drawn out stretch of time. This long haul supplier affiliation improves made products, additionally put in inside worth to the suppliers. Furthermore, this quality chain adjustment separates IKEA from specific
IKEA is the world’s largest furniture retailer from 2008. It is well-known for its low cost control, at the same time providing high quality product. Moreover, the corporate structure of IKEA is complex while it got a success in the global expansion. In the following parts, I will introduce the differentiation point of IKEA in different dimension, and how it achieves a lower cost position than its rivals. Since the 1990s, some of IKEA’s product was produced internally.
It negotiates prices with the various suppliers, checking the quality of materials and analyzing the global environmental impact that occurs and also evaluate the social and working conditions of the suppliers among the countries. More than 50% of the products are made from sustainable or recycled products. Ikea’s strategy is characterized by the use as few materials as possible to make the furniture, with the aim of not compromising the quality and durability of the product. Most of Ikea furniture is designed and sold in pieces for the customer to assemble. It is interesting that the pieces are placed into convenient, efficient and flat packages for low-cost transport, because they take up less room
In contrast, it might be interesting for IKEA to be aware of their brand strength and its development. Otherwise IKEA is a well-known manufacturing company which is not as dependent on the intellectual capital and brand value as other firms for example in the IT and technology sector. As a result the use of Brand Value depends on cost-benefit considerations of the responsible
IKEA began in 1943. It was founded by Ingvar Kamprad. According to Bloomberg, he was the richest person in Europe as of 2013 (as cited in Mukazhanova, 2014, p. 4). Today, the company is owned by for profit and non-profit organizations. The corporate structure is composed of “operations” and “franchising”(IKEA, as cited in Mukazhanova, 2014, p. 5).
Enlarging into international markets allows potential opportunities to companies. Let’s see the IKEA’s international strategy in the following Figure 1. IKEA has expanded from a small, family-owned home furniture corporation into a global retailer within 385 stores in 48 countries, during its 72-year history. After the opening of first store in Sweden in 1953, by 1960’s Swedish market was saturated and as Sweden is a small market, there is not much opportunities for growth any more. IKEA decided to expand its market international starting from neighborhood Scandinavian countries according to similar consumer tastes.
IKEA’s vision and business idea clearly reflects it’s strategy. ‘‘To create a better everyday life for the many people’’, this is the IKEA vision. IKEA’s business idea is ‘‘To offer a wide range of well-designed, functional home furnishing products at price so low that as many people as possible will be able to afford them’’ Source B, I.I.S. 2013 About the IKEA group. Available at http://www.ikea.com/ms/en_US/this-is-ikea/company-information/(Accessed on:12 February 2016) Here are some crucial aspects to IKEA’s success.