The Swedish home-furnishings company IKEA has three hundred and twenty-six stores in thirty-eight countries. In the fiscal year 2010, it sold $23.1 billion worth of goods, a 7.7 per cent increase over the year before. IKEA is the invisible designer of domestic life, not only reflecting but also molding, in its ubiquity, our routines and our attitudes. Bill Moggridge, the director of the Cooper-Hewitt Design Museum, calls IKEA’s aesthetic “global functional minimalism.”. The main office of IKEA is Älmhult, a small village on Sweden’s southern peninsula. There, in 1953, IKEA’s founder, Ingvar Kamprad, who is now eighty-six, opened the first IKEA store. As of October 2011, IKEA has 332 stores in 38 countries and most of which are IKEA owned, but several have been sold off to franchisees, and left in their capable hands. IKEA's vision is to create a better everyday life for the many people. Their business idea is to offer a wide range of well-designed, functional, home furnishing products at prices so low that as many people as possible can afford them. This is the idea at the heart of everything IKEA does, from product development and purchases to how they sell their products in IKEA stores globally. It is leader in the sector of furniture and it is one of the most prestigious and innovative company in the world; IKEA has the largest market share of the sector but it has to be inconstant vigilance and innovate to continue being the leader
There are three different sectors of business. That is Primary, Secondary and Tertiary sector. IKEA operates in the tertiary sector, which provides service to the people in the economy. It is the world’s largest retailer of flat pack furniture and home furnishings. IKEA is in the service sector and focuses on product design and distribution. IKEA is a privately owned, international home products retailer that sells low-price products, including flat pack furniture, accessories, bathrooms and kitchens at retail stores around the world. This means they are a multinational company which operates in more than one country. The corporate structure is divided into two main parts: operations and franchising. Most of IKEA's operations, including the management of the majority of its stores, the design and manufacture of its furniture, and purchasing and supply functions are overseen by INGKA Holding, a private, for-profit Dutch company. A franchise is a form of business organization in which a firm that already has a successful product or service (the franchisor) enters into a continuing contractual relationship with other businesses (franchisees) operating under the franchisor’s trade name and usually with the franchisor’s guidance, in exchange for a fee. Inter IKEA Systems earns its money from the franchise agreements it has with each IKEA store. All franchisees pay 3% of sales to Inter IKEA Systems, who is the franchisor. The franchise approach has helped IKEA to grow rapidly and it has been openning approximately three new stores worldwide every month in recent times. Regarding the Human Resource of IKEA, they specifically sets out to recruit individuals who want to improve the company and themselves and who are open-minded and straight-forward in their approach, rather than status conscious. They offer a working environment where team spirit is a core value and where there is the chance to take greater responsibility following recognized good results, regardless of age.
ANALYZE MARKETING CONCEPT
Marketing is the process of communicating the value of a product or service to customers. For IKEA , its unique selling point is its flat pack formula which it has applied to furniture giving it a mass market appeal with functionality and quality at a very low price.
It has built market share through a market penetration strategy using price penetration and a programme of regular store openings around the world....