Swot Analysis Ikea

Introduction

IKEA had success in furniture retailing in European countries since it has unique selling strategy and perfect price for low and middle-income classes. It became global company operating in different parts of the world. But entering not at all countries was successful and profitable. Asian countries in the 1980s were considering as attractive markets for direct foreign investment and IKEA was interested to opening new stores there as well. Asian market met furniture giant with misunderstanding and distrust. The main issue was cultural differences which IKEA didn't take into consideration before going to Japan and China. With time taking into attention all mistakes and analyze them IKEA returned to these markets with new concepts

Headquarter is located in Sweden where design and product range is developed. But company manufactures its product in developing countries for saving costs. So, IKEA offers functional furniture items at a low price to make more people be able to afford it. The vision of IKEA is "To offer a wide range of well-designed, functional home furnishing products at prices do low that as many people as possible will be able to afford them" (official website).

About Strategy

As for IKEA strategy, it is different from other furniture retailers. First of all, perfect price for furniture should be noted since it is not expensive and too cheap at the same time. It still creates a value of purchase as a good thing for the acceptable price. This pricing strategy is smart for solving important issue of all furniture retailers. Usually, people buy furniture for a long term 15-20 years, but now after it is broken or not likable anymore customer can get rid of it easily thanks to price was low. The target market was young people with advanced taste and low- and middle-income level.

Then company developed convenient flat-pack form selling. Which means that all furniture components come separately from manufacturers and customer are supposed to assemble them by him. For example, doors are coming from the door factory and shelves from the saw mills. In some cases IKEA staff can help with assembling.

In stores you will not meet intrusive salespeople; there are only helpdesks for more information about particular furniture. Customers can walk freely around the store and select items by themselves.

Having success and positive growth in Sweden IKEA continued its expansion to outside of home country to increase sales what was consecutive decision. IKEA started its entry in Japan and China after internalization experience in Europe and America. These two countries are very different from the point of culture, lifestyle, economic and political features and that's why the new strategy was