This website uses cookies to ensure you have the best experience. Learn more

Ikea’s Global Strategy: Furnishing The World

3725 words - 15 pages

IKEA’s Global Strategy: Furnishing the World
submitted by Brian Albanese
April 26, 2014

Executive Summary
This author has provided an analysis of the IKEA case study found in the Marketing Management textbook. It analyzes the strategies used by IKEA to gain competitive advantage in markets outside of its original market. The report provides a background of the organization, recognizes IKEA’s main markets and examines corporate level strategies by identifying its target market and evaluating its pricing strategies. This case study will further analyze how culture, design, and price play significant roles in determining IKEA’s success. In addition, IKEA’s “global ...view middle of the document...

The financial recession of 2008 is clearly the greatest economic factor for IKEA. According to, “the first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated” (Willis, 2009, p. 1). In addition, IKEA’s management team understood the effect the recession would have on the currency exchange. As a result, the Swedish krona grew strong against the U.S. dollar, thus increasing the cost of raw materials from Sweden. As the United State slowly moves out of the recession, the cost of raw materials will slowly decrease simultaneously.
Cultural and social values and trends. The cultural differences between Europe and the United States plays a significant role in IKEA’s business strategy. While Scandinavian design became popular as the years went on, Americans became more interested in the functionality of the product. In addition, people worldwide tend to inherit furniture from previous generations. Sometimes, this furniture may last for generations to come. However, while this practice is more common in European countries, the American culture has changed dramatically.
Political and legal issues. There is currently no data about the political influence over the industry. This ensures there a healthy business environment politically speaking.
Technological factors. Some factors include research and development activity, automation, technology incentives, and rate of technological change. IKEA developed several unique features in the furniture industry that set itself apart from its competitors such as self-assembly. This feature enabled IKEA to ship its products in flat-packs which reduced the damage while transporting.
Summary of environmental opportunities and threats. Today, more and more customers are concerned about the environment. In response to this, IKEA must create products with vast customization that consume less water so the carbon footprint will be at a minimum. One of IKEA’s main objectives is to provide products at a cheaper rate than its competitors. Since this objective does not recognize the necessity of a constant development of design and quality, the organization could possibly lose a major portion of the market who wants these in their products. This customer trend should lead to IKEA to creating a good quality product at a low cost. Since 2007, the global economy has been suffering from a recession. This economic condition has strongly affected every business including IKEA. Since the purchasing power of buyers has gone down, they would be reluctant to purchase products that are not vital to them. This could decrease the sales revenue of IKEA worldwide dramatically, especially in the United States.

Classification and definition of industry. “IKEA is a furniture manufacturer and retailer, well known throughout the world for its knockdown furniture” (Peter & Donnelly, 2013, p. 410). The furniture industry in Europe is well developed with a number...

Other Papers Like Ikea’s Global Strategy: Furnishing the World

Communication and the Global World Essay

1256 words - 6 pages October 14, 2014 Gangone, A. (2010). Ethical issues in international business. The USV Annals of Economics and Public Administration,, 10`(3), Special Number, Retrieved October 14, 2014 Liu, S., Gallois, C., & Volcic, Z. (2011). Introducing intercultural communication: global cultures and contexts. London: SAGE., Retrieved October 14, 2014 Ni, L., & Alonb, I. (2010). U.S.-Based Fast-Food Restaurants: Factors Influencing the International Expansion of Franchise Systems. Journal of Marketing Channels, 17(4), 339-359., Retrieved October 14, 2014

Look at the Indian Organised Retail Industry. Would Collaboration with Global Retailers Such as Wal-Mart and Tesco Be a Better Growth Strategy, or Would It Be in Understanding Who Their Major...

652 words - 3 pages Look at the Indian organised retail industry. Would collaboration with global retailers such as Wal-Mart and Tesco be a better growth strategy, or would it be in understanding who their major competitors are and matching their capabilities and out competing them? The recent wave of reforms by the Government to incentivize Foreign Direct Investment (FDI) in various sectors is bringing a new zeal to the investment climate in India. One of the

Ikea - Case Study

1098 words - 5 pages Case Study: IKEA’s Global Strategy: Furnishing the World By John Rubas Embry Riddle University Worldwide MBAA 514 November 15, 2012 IKEA’s Global Strategy: Furnishing the World IKEA is a Swedish furniture store chain known for its low priced home products and sells ready to assemble furniture. With IKEA’s successful choice of inexpensive products and its unique marketing strategy, the company has been able to expand

Ikea- Strategic Planning

3500 words - 14 pages meet the Asian style. (The China Business Review, 2004) IKEA had to also later two of the most important aspects of its time-tested and proven global-strategy when it came to China; while elsewhere in the world, IKEA had always located its sotes in less expensive areas and sold its furniture on the do-it-yourself (DIY) principle, these elements had to be change in China. According to (Pralahad and Hamel, 1990) IKEA claimed that it had been

Ikea-The Global Retailer

829 words - 4 pages CHAPTER 6 Closing Case: IKEA – The Global Retailer IKEA may be the world’s most successful global retailer. Established by Ingvar Kamprad in Sweden in 1943 when he was just 17 years old, the home furnishing superstore has grown into a global cult brand with 230 stores in 33 countries that host 410 million shoppers a year and generates sales of €15 billion ($18 billion). Kamprad himself, who still owns the private company, is rumored to

Ikea Case

2451 words - 10 pages global strategy was “one-design-suits-all”. This case “IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor ” is about IKEA’s development from a backyard company to one of the world’s largest furniture retailers, which has to deal with the issues of child labor and how they should behave considering economical issues and the company’s policy. Business Manager Marianne Barner has to face tough decisions on How to effectively enforce their

Analisis de Coosto Beneficio

4772 words - 20 pages products is demanded by the customers, customers may purchase the lower price with high quality products. IKEA’S pricing strategy targets consumers with limited financial resources and differentiate itself and its products from competitors is needed. So, IKEA need to reduce production cost in order to attract customers with high quality. There are also many competitors from the same industry is entering the low price household and furnishing


2452 words - 10 pages Progress and Global Expansion after applying the strategies: OPPORTUNITIES AND CHALLENGES To grow the market, Ikea’s main targets are US, Russia and China markets. SWOT analysis for Ikea for its targeting market competitiveness: Strengths: • Economies of Scale in the affordable Contemporary Design household market. • Identifiable concept with clear strategy of cost leadership and middle class target consumers • Recognizable store structure

Ikea Analysis

1320 words - 6 pages , while Crate & Barrel is growing up: housewarming gifts, engagement parties, wedding registries and dinner parties. This strategy has carved out a nice niche for Crate and Barrel, but IKEA is still viewed as the preferred brand How IKEA Stands Alone IKEA’s devotion to Environmental design allows designers, product developers and technicians to consider a product's safety, quality and environmental aspects, from the initial design stage


1564 words - 7 pages -­‐carrefour-­‐tesco-­‐ metro-­‐successful-­‐global-­‐growers-­‐what-­‐can-­‐we-­‐learn-­‐from-­‐them/     Mayer,  H.  (2011)  Corruption  halts  IKEA  in  Russia.  The  Age.  Retrieved  2014-­‐08-­‐18  from­‐halts-­‐ikea-­‐in-­‐russia-­‐20110306-­‐ 1bji5.html       Nikishenkov,  O.  (2010)  IKEA  case  exposes  bribe  culture  in

Ikea Strategy in China

984 words - 4 pages different ads in China, in TV, newspaper and in print. Themes in campaigns are the same as everywhere in the world but with the Chinese twist (be different, break tradition). Small changes are the key word in Ikea ads and in-store. Other ads that Ikea have run have the theme of “do not be like your parents”, a theme that seems to speak directly to Ikea’s target group. IKEA also adjusted its store location strategy. In Europe and the U.S

Related Essays

The Glocal Strategy Og Global Brands

3257 words - 14 pages difficult decisions regarding what marketing strategy to adopt. Global marketing strategies aim to maximize standardization, homogenization and integration of marketing activities across markets throughout the world. (Kotler, 2009) However, global marketers must address a number of issues in their marketing strategy to ensure their brand will be successful worldwide. Examples of such issues include differences in the economic, political, social and

Global Outsourcing And The World Trade Organization

2000 words - 8 pages economy.The WTO continues the efforts of NAFTA to help negotiate free trade around the world. It consists of 148 countries who agree to keep their trade barriers low to encourage trade on a global level. The WTO assures its members that they will be able to have "secure supplies and greater choice of the finished products, components, raw materials and services that they use. Producers and exporters know that foreign markets will remain open to them

Has Market Economy Led The World To The Current Global Crisis

2629 words - 11 pages | Has Market Economy approach led the world to the current economic situation? | | | | By:Divya Padmanabhan IES Management College and Research Centre Mumbai, India | Executive summary: “If war is God’s way of teaching geography to the world, recession is His way of teaching everyone a little economics”. The global financial crisis has questioned

The Global Aids Crisis And Health Care In The Developing World

1573 words - 7 pages Paula Bent Research Paper 12/19/2010 The Global AIDS crisis and Health Care in the Developing World The global epidemic of HIV/AIDS is rapidly becoming the worst infectious-disease catastrophe in recorded history, surpassing the bubonic plague of the fourteenth century and the influenza epidemic of 1917, each of which killed some 20 million people. (1) The HIV/AIDS epidemic, first identified in 1981, remains among the greatest threats to