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Ikea Analysis

2364 words - 10 pages

IKEA Analysis Repot

Having a successful company takes a lot of work and researching. You see a lot of big

successful firms go out of business after many years of being open due to lack of marketing and not being able to keep up with the rapid growing competition. It takes the integration of sales, marketing, front of the line staff and knowing your customers wants and needs to be successful for decades. Not listening to customer demands could be detrimental to your organization. Even if you are successful now, another competitor can rise and take away your market share. An organization should not only care about sales and revenue growth, they need to also be conscience about the ...view middle of the document...

The selling and service environment of the stores is the environment inside the store, including layout, atmosphere and the selling environment (Burt, Johansson & Thelander, 2011). As we know, IKEA has very attractive store formats, attracting consumers by creating model rooms with their furniture items. This is a great marketing strategy, it empowers IKEA to show the consumer how the set up would be like if the items were in their home. Visual imagery is very powerful and can entice the customer to purchase the item over just seeing a bunch a furniture clumped together in one room.
On the IKEA’s Corporate Website (as cited on Burt, Johansson & Theleander, 2011) their vision is to be able to enhance and create a better daily life for people. They are able to do this by offering a huge selection of well designed, functional home furnishing products at prices so low that as many people as possible can afford them. They also make sure that this same method is applied in every country that they are associated with. These are the marketing strategies that satisfy the wants and needs known as value proposition. This strategy is attractive to customers, and by not offering expensive high end furniture it does not apply to a certain demographic, it is available for most individuals. This is what is known as positioning differentiation, there are not many low priced high quality furniture stores, this puts IKEA ahead of all their competitors, locally and globally. The location and the real estate of IKEA is also important, they tend to choose areas in major cities making it easily accessible for most (Burt, Johansson & Thelander, 2011). Take for example Circuit City, which was a giant in the technology industry in the 1980s. They tended to choose poor real estate locations to save money, therefore, many consumers did not make the commute to their stores that often since they were so out of the way. Making the sacrifice and spending more on real estate will greatly benefit the organization in the future. By IKEA choosing prime real estate locations, they were able to increase sales and attract a wide range of individuals.

Value Chain
The three sources of value are economic, social and environmental. The values of IKEA are the following: 1) Cost consciousness- IKEA does this by emphasizing saving resources. 2) Simplicity in the use of manufacturing and the distribution. 3) Innovative thinking- with keeping price tags low, this is a challenge and needs creative and smart solutions 4) Being responsible for the environment (Edvardsson & Enquist, 2006). Keeping costs low and delivering good products takes some smart innovative thinking. Distribution is often very simple since they usually carry most of the items at the store itself in a large warehouse area of the store. The have a Corporate Social Responsibility (CSR) which means the treatment of the environment and people. This would be IKEA’s relationship with the larger society and...

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