IKEA Analysis Report
Sherry L. Crowe
April 16, 2015
IKEA Analysis Report
Having a successful company takes a lot of work and researching. You see a lot of big successful firms go out of business after many years of being open due to lack of marketing and not being able to keep up with the rapid growing competition. It takes the integration of sales, marketing, front of the line staff and knowing your customers wants and needs to be successful for decades. Not listening to customer demands could be detrimental to your organization. Even if you are successful now, another competitor can rise and take away your market share. An organization should not only care about sales and revenue growth, they need to also be conscience about the environment and care about the working environment of their employees. IKEA is a Swedish company that dominates in the furniture industry and is very successful with their sales and marketing strategies. They are also very conscience about the external environment. They have been in the foreign market since 1973, they currently have stores in over 37 countries and are continuing to grow (most recently Asia). By following the traditional pattern of globalization, first operating in countries with similar cultures and then expanding to the foreign market, they were able to have great international success (Burt, Johansson & Thelander, 2011). We will discuss in detail why IKEA strategies are so effective and why other organization should learn from their current success. IKEA’s marketing
There are generally four retail marketing items: merchandise, location and store format, the selling and service environment and market communication. Merchandise is the item you are selling to the consumer inside the store. In marketing terms, being creative and making the items attractive to lure customers into the stores (Burt, Johansson & Thelander, 2011). Location and store format means where does the organization choose to locate and operate their stores? The format is how the store sets up the physical layout of the store. The selling and service environment of the stores is the environment inside the store, including layout, atmosphere and the selling environment (Burt, Johansson & Thelander, 2011). As we know, IKEA has very attractive store formats, attracting consumers by creating model rooms with their furniture items. This is a great marketing strategy, it empowers IKEA to show the consumer how the set up would be like if the items were in their home. Visual imagery is very powerful and can entice the customer to purchase the item over just seeing a bunch a furniture clumped together in one room. On the IKEA’s Corporate Website (as cited on Burt, Johansson & Theleander, 2011) their vision is to be able to enhance and create a better daily life for people. They are able to do this by offering a huge selection of well designed, functional home furnishing products at prices so low that as many people as possible can afford them. They also make sure that this same method is applied in every country that they are associated with. These are the marketing strategies that satisfy the wants and needs known as value proposition. This strategy is attractive to customers, and by not offering expensive high end furniture it does not apply to a certain demographic, it is available for most individuals. This is what is known as positioning differentiation, there are not many low priced high quality furniture stores, this puts IKEA ahead of all their competitors, locally and globally. The location and the real estate of IKEA is also important, they tend to choose areas in major cities making it easily accessible for most (Burt, Johansson & Thelander, 2011). Take for example Circuit City, which was a giant in the technology industry in the 1980s. They tended to choose poor real estate locations to save money,...
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