This case study is to deliberate about IKEA’s marketing strategy in reaching out customers. Also discussing about IKEA’s business idea and IKEA follows a quite traditional pattern of internationalizing and also drives the localization thoughts in different market place to stay competitive. Their vision “To create a better everyday life for the many” and their ultimate business idea “ To offer a wide range of well designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them” actually has inspired many shoppers and influence the way people shop. IKEA’s Background
IKEA is an internationally known home furnishing retailer. It has grown rapidly since it was founded in 1943. The company was founded by Ingvar Kamprad when he was 17 year old boy. At that time, IKEA was one–man mail order furniture company. Originally, it sold pens, wallets, pictures frames, watches, and jewellery. Kamprad had a habit of going into wood factories to look at the “off cuts” which mean timber to be thrown away as waste. He made good use of these no value timber an created well and extraordinary priced products. He opened the IKEA store in Sweden in 1958. Today it is the world's largest furniture retailer, recognised for its Scandinavian style. The majority of IKEA's furniture is flat-pack, ready to be assembled by the consumer. This allows a reduction in costs and packaging. IKEA carries a range of 9,500 products, including home furniture and accessories. This wide range is available in all IKEA stores and customers can order much of the range online through IKEA’s website. There are 18 stores in the UK to date, the first of which opened in Warrington in 1987. In July 2009 IKEA opened a store in Dublin too - it’s first in Ireland. IKEA stores include restaurants and cafés serving typical Swedish food. They also have small food shops selling Swedish groceries, everything from the famous meatballs to jam. Stores are located worldwide. In August 2008 the IKEA group had 253 stores in 24 countries, with a further 32 stores owned and run by franchisees. It welcomed a total of 565 million visitors to the stores during the year and a further 450 million visits were made to the IKEA website. IKEA sales reached 21.2 billion Euros in 2008 showing an increase of 7%. The biggest sales countries are Germany, USA, France, UK and Sweden. In 2008 IKEA opened 21 new stores in 11 countries and expects to open around 20 more in 2009 as part of its strategy for growth. Reasonable prices are one of the keystones of the IKEA concept and help to make customers want to buy from IKEA. This low price strategy is together with a wide range of well designed, functional products. IKEA’s products cater for every lifestyle and life stage of its customers, who come from all age groups and types of households. This is vital in times when the retail sector is depressed, as it increases IKEA’s potential market. Since it was founded IKEA has always had concern for people and the environment. The IKEA vision ‘to create a better everyday life for the many people’ puts this concern at the heart of the business. IKEA has reacted to the public’s rising concern for sustainability in its choice of product range, suppliers, stores and communication. It has also spotted business potential in providing sustainable solutions. IKEA’s concern for people and the environment inspires it to make better use of both raw materials and energy. This keeps costs down and helps the company to reach its green targets and have an overall positive impact on the environment.
IKEA's goals of sustainability and environmental design are central to its business strategy. It has launched a new sustainability plan...
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