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IKEA is the world’s largest furniture retailer, specialising in selling stylish, inexpensive, self assembly Scandinavian design furniture, home accessories, kitchens and bathrooms in their retail stores around the world. Delivering good quality contemporary design furniture to the middle class consumer is not the only focus of the IKEA group; it also sells a lifestyle that customers around the world recognise and embrace. IKEA is a global company that has invested and is present in many countries; it promotes its products and services using the same brand in all markets coordinated from its one main corporate office in Sweden which is responsible for a global strategy that concentrates on cost management, efficiency and quality. Globalisation, political-economical and social-demographical (see Appendix 1) factors, like: economic growth, deregulation, more disposable income, rising housing market led to the demand and opportunity for growth, which IKEA exploited.
The furniture retail industry is under a lot of competition and pricing pressure; as well as ever growing customer demand and growing environmental awareness. Through the control of the main four elements that can generate profit: product, place, promotion and price; enabled IKEA to expand and strengthen its positions through targeting a specific marker segment, product differentiation, unique value-chain and cost leadership.
Deregulation of foreign investment laws allowed IKEA to successfully enter the global market, i.e. Opening-Up policy in China 1978 invited the foreign investment which led to economic upturn, more disposable income, rise in the housing market and subsequently demand for home furnishings.
“The IKEA business idea is to offer a wide range of home furnishings with good design
and function at prices so low that as many people as possible will be able to afford them.
And still... [continues]
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