Case Study Of Ikea

International marketing:

Ikea is Swedish and international company found by Ingvar Kamprad. IKEA designs and sells ready to assemble furniture and home accessories.

The reasons of IKEA’s successful entry into the furniture trade business were IKEA’s low prices and quality. Kamprad began selling furniture in his mail order company. Later he turned it into a business. In 1935, the furniture prices increased quicker than any other trade good. Kamprad reacted to this by selling his furniture in a price that all could afford. People saw IKEA furniture as an investment for the next 20 years. IKEA is known for paying the workers a living wage and is very transparent about the process of how the products are processed. Ikea works hard to achieve

It was also extremely important to make IKEA international because the Swedish furniture market was very adequate.

One of the challenges that IKEA faced was the fact that the average age and the income level in most developed countries was expected to increase while IKEA’s target market of young families which have a low to middle income, would be decreasing. However to overcome this issue, IKEA choose to solve this issue by expanding to different categories of furniture depending on the age factor; such as a variety of traditional designs for older people who are financially stable. Also different work based furniture for workers. IKEA also had to think about the different trade rates and the economical status.

In 2012, IKEA apologized for the removing of a woman on a Saudi Arabian catalogue. The Saudi Arabian catalogue looks exactly the same as the Swedish one, except the absence of

The IKEA entry into India has met five important customer needs; like: good value of money, exclusive products, inspiration and ideas, facility of shopping, and enjoyable. 3

Globalization will allow IKEA to produce even more and sell in a wider range in different parts of the world in a larger market and it will increase the level of investment. Products become cheaper and good are quicker to get.

Some of the risks that multinational businesses might face when entering the market could be the lower skills and motivation in the working area in underdeveloped countries. Rapid trained workers are more likely to be more costly due to the mistakes. Also the workers are not paid well and low salaries cause the workers not to be motivated and dedicated to work. Since there are many other furniture businesses, IKEA might face some bigger competitors that compete more with IKEA than the competitors near the origin county of the business. The different customers might have different choices due to the different cultures. This might be a risk for IKEA since it is mostly based on western