Therefor Ikea is more advanced than its competitors due to the showrooms and the cafeteria that they provide for the customers. This made Ikea being a unique place for customers to go. IKEA is also a standalone store, meaning shoppers do not have to go though shopping center traffic or any other similar conditions. Internationalization of IKEA was very important because it drove many IKEA’s top managers to positions of more responsibility, it increased profit, it enlarged the area of sales and it brought IKEA into new market places. It was also extremely important to make IKEA international because the Swedish furniture market was very adequate.
Their product-line could be expanded to low-esteem electronic or electronic widgets, for example, iPhone cords and covers. Besides that, their furniture should be even more innovative and utilitarian to manage space, as the land costs increase and price-sensitive people are prone to live in smaller places. IKEA is a famous brand with hundreds of stores around the world. In order to improve its performance, it must evaluate its competitive and external environment. IKEA reacts to both external and internal issues in a proactive and element way by utilizing its qualities and decreasing its weaknesses.
IKEA has about 1,220 suppliers in more than 55 countries around the world, providing the bulk of the company’s inventory. Furniture is sourced through an IKEA-owned manufacturer, Swedwood (now termed as IKEA Industry as of September 2013) as well. IKEA Industry is also the world’s largest wooden furniture manufacturer. IKEA targets middle-class customers worldwide. Its largest target market is the members of Generation Y, as they are young adults who will be purchasing furniture for their future or current homes.
Decreased quality 3. Negative publicity Opportunities: 1. developing online deals 2. better advertisement 3. further venture into developing economies Threats: 1. unorganized sectors like local manufacturers and carpentry stores 2. growth of average consumer income 3. intensifying competition Conclusion: In short, IKEA plan of action backing the IKEA domain extending development, its worldwide scale impact and esteem idea ceaseless uncover. Although it has towards globalization, yet at the same time did not overlook localization, their strategies in an increasingly uncertain financial environment timely conform. Based on IKEA existing business model, supply chain, innovative product design and renewable raw materials, IKEA will improve in
International marketing is when a business sells its goods and services to other countries and develops different strategies to adapt to the cultures. Ikea is a Swedish company created in 1943, that aims to produce high quality furnishings at a lower price, making them affordable and available to everyone. Being a global company, and having 373 stores in more than 40 countries, Ikea faces various challenges and opportunities, as they are obliged to address the people and cultures worldwide, while making profits and remaining competitive. Therefore, they develop different strategies to fulfil their objectives. Figure 1 represents the SWOT analysis for IKEA.
The company started in a place that used to storing milk churns. Now a days, IKEA has 225 stores around the world, over 30 countries, with annual turnover around $17 billions and more than 90000 employees. As a result of this effort, the Kampard is a one of the most richest men in the world ( $18.5 billion). Solutions To The Questions: (1) IKEA has a lot of innovative techniques to save the cost. One of the strong technique is transportation process .
Once IKEA decided to start up its business in Brunei, it definitely will incur a huge amount of initial cost. This is due to the reason that it requires capital, such as raw materials, human resources and so forth, to produce goods and services. Hence, it needs to obtain a large sum of finance resources in order to support its business. According to The Richest in the World (n.d.), Brunei was ranked at the fifth place for the richest countries in the world. Therefore, it is appropriate for IKEA to develop its business in Brunei.
They should include these key factor of IKEA in their advertisement. The DIY approach enable customers to customise their furniture the way they wanted. They can choose different accessories that they like and customise their furniture, by doing it yourself customers will have a strong sense of accomplishment. However, their targeted market usually like convenience product and they might not have the time to assemble the furniture themselves. IKEA could introduce some readymade furniture to target a wider range of
Ikeas supply chain is highly efficient in terms of the way its sells its goods. The stages of IKEA’s supply chain are the supplier, manufacturer, distribution centre, retailer and the customer. Ikea has over 1400 global suppliers with China and Poland being the largest market and 42 distribution centre. Despite the fact that Ikea has long lasting relationship with its supplier it has ownership of all their products which allows them to easily change a non performing supplier. IKEA retailers shops also serve as their warehouse for their products.
IKEA decided to expand its market international starting from neighborhood Scandinavian countries according to similar consumer tastes. Internationalization process Norway was the first country where IKEA started its international expansion in 1963. Denmark and Switzerland stores were the following foreign market entries. IKEA’s internationalization process is divided to three main stages. In the following Figure 2.