Ikea

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Economical factors
Created in 1943 by Ingvar Kamprad Turn over : 21,5 billion €uros (+1,4% in 2008) 16,3% market share in France Staff : 128.000 persons 267 stores in 25 countries Visitors in stores: 590 millions 561 millions/year visitors on the website Ikea.fr

Graphs

PESTEL IKEA

Economical factors
Better purchasing power of emerging countries Pricing different according to the country Low price strategy in general

Technological & Legal
Technological factors Creation and innovation of new products Better stock management Legal factors Strengthening of international importation regulation Norms

Environmental & Social
Environmental factors Create products with a minimum of impact on the environment IWAY Partnerships with many environmental organisations Social factors Decent work condition to its suppliers IWAY Partneships with many social organisations

Structure & Organisation IKEA

Structure and organization IKEA
In charge of the development of the assortment of IKEA (10000 products) IKEA has 43 offices of purchase distributed in 33 countries Suppliers distribute in 55 countries

Structure and organization Swedwood
The industrial group of IKEA is specialized in the production of furniture and wooden components 32 factories in 9 countries Swedwood is specialized first and foremost in the sectors where IKEA has difficulties The IKEA’s Group is supported by 9 departments

The watchword at IKEA
Decentralization
To have economies of scale To maintain low prices

But certain fields of expertise keys are centralized (IKEA IT, IKEA Food Services…)

Almost 300 stores in more than 35 countries

The concept ?
« IKEA offers a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible can afford them » IKEA corporate web page

Standardised approach
To keep the prices low and attractive To create one single image everywhere The target group ? « Many people »

6 marketing aspects OF IKEA STRATEGY

(1) PRODUCT RANGE
Supposed to be the same everywhere

10 000 Items
Very small adaptations The Swedish product names are also used in store and in the catalogue

(2) THE STORE
Store format standardised with 3 different sizes

Two levels
Same layout everywhere : signage, displays, design and colors

Goal

the same shopping experience

(3) CATALOGUE

70% of the annual
marketing budget
17 languages 22 countries

Standardised layout

(4) PRICES
To deliver high value at low price The price is relative and compared to the marketing in each country.

Results ? Different prices on the same product in different countries

(5) IKEA Family
Loyalty program including a magazine, special assortement of products in store The content is different between countries and the most of this promotion doesn’t exist

(6) ADVERTISING
Responsability of the local store manager

New York, USA

Copenhague, Danemark

The strategic work with the press differs between countries

Standardised approach to the world (6) (5) (4) (3) (2) (1) Advertising IKEA Family Prices The catalogue The Store Products and products range Global

Local

Standardised approach to the world

High-level of standardisation with some adjustments

Adaptation or Standardisation ?
CHINA EXAMPLE

CHINA IKEA
“IKEA” is a well-known brand. Chinese buy less when they visit. They visit more often than everywhere : 33 per cent come every month. The food has been changed : a wok, and a lid added with a special set of teacups. New specific model of sets and special balcony because many Chinese live in flats. The image of IKEA is not low prices, in China it is the opposite : western retailer and the store is for higher-middle class. Chinese IKEA store are sourced in China to reduce costs. Store are close to midtown. Home delivery service is common in China and often used. Chinese standards. Focused on culture-specific aspects.

CHINA IKEA...
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