Essays on International Marketing - IKEA Case Study

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The paper "International Marketing - IKEA" is a perfect example of a marketing case study. IKEA is a Swedish multinational company that deals with the design and sale of home furniture, appliances and other accessories. The furnishing retailer has grown to become a world leader in Do It Yourself (DIY) home furniture. Most of the company products are sold as a flat pack where the consumer is responsible for assembly. The company range of products is 9,500 products. The customers can order their products online or through stores. The company was started in the 1940s and grew to a multinational with more than 300 stores and presence in over 40 countries.

The company has employed over 154,000 workers and had a sales turnover of 27.5 billion in 2012. At the moment, the company has diversified its products and offers food and prefabricated housing on top of furniture (Hellströ m & Nilsson, 2011). This report will take a strategic analysis of IKEA focusing on customer, competitor, SWOT analysis and target market positioning. The vision and mission of the Organization IKEA vision is to create a better everyday life for many people.

This has helped the company to put the interest of their customers at heart. The issue of sustainability has been one of the most areas looked at. This is due to rising public awareness on environment. Due to IKEA concern in making everyday life better, they have been involved in making better use of resources and energy. The company have been able to reach the environmental sustainability target and reduced costs through environmental sustainability. The mission of the company is the same as vision.

Through implementing its mission, the company have gained increased market share for their products. Creating a better life for the customers makes them achieve permanent customer base (Hellströ m & Nilsson, 2011). Competitor Analysis IKEA operates in a very competitive market sector. This is due to other low priced and good quality manufacturers. The main competitors for IKEA are British B& Q and The Home Depot. British B& Q have a trusted brand and offers classes on the do it yourself (DIY). They are also active in charity hence able to create a good reputation.

This makes them a threat to IKEA in the Do It Yourself furniture market. They are also known to employ trade experts in a bid to capture more market. By looking at their market share, B& Q are still ahead of IKEA hence their presence in the market cannot be ignored. They have been able to attract new customers through a free appointment with design consultants which have helped in making their brand trustworthy. British B& Q have been able to capture the Chinese market and become the largest dealer of DIY.

B& Q is the fourth largest dealer of DIY and the second-largest retailer of DIY in Europe (B & Q, 2007). Home Depot is the largest dealer in the Do It Yourself furniture globally. The company has been able to offer IKEA stiff competition due to its presence globally. Home Depot has been able to establish themselves across the United States with their megastores. At the moment, they have been able to outdo all the rivals in the American market to achieve the top position. Home Depot has also been able to win customers through their sustainability efforts and philanthropy.

The company has invested in philanthropic efforts that have served several causes. (Home Depot, 2014). As with IKEA, the company has also been devoted to the diversification of its products. This has been achieved through fuel centers which offer snacks, beer and providing trucks fuel. The competitors are increasing their stores worldwide hence creating a competitive market. This has made IKEA look for ways in which it can reduce competition in the market. In order to do this, IKEA has analyzed the competitors’ activities.

Cost leadership and design differentiation are the most used activities by the IKEA competitors. IKEA have used differentiation and enhancement of the customer experience in their stores. This has been achieved by understanding what the customers want and working to achieve it. As with customers from competitors, they need unique designs and experts help in making home interiors. This has been done by IKEA in a bid to win the customers. The shopping experience at IKEA has been cited to give the company a competitive advantage (Hellströ m & Nilsson, 2011).

References

B & Q (FIRM) 2007, You can do it: the complete B&Q step-by-step book of home

improvement. London, Thames & Hudson.

De Wit, B & Meyer, R 2005, Strategy Synthesis, London: Thomson Learning

Hellström, D & Nilsson, F 2011, ‘Logistics-driven packaging innovation: a case study at

IKEA’, International Journal of Retail & Distribution Management, Vol. 39, no. 9, pp.638 -657

Home Depot 2014, Home Page, Viewed 19 April 2014,

http://www.homedepot.com/c/HomePageRegional4?s_tnt=56312:2:0

The IKEA concept, 2014, The IKEA concept, Viewed 19 April 2014,

http://franchisor.ikea.com/concept.html

Zentes, J., Morchett, D. & Schramm-Klein, H. 2007, Strategic Retail Management, Gabler,

Wiesbaden.

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