Delivering Value: A Case Study of IKEA

Topics: IKEA, Marketing, Ingvar Kamprad Pages: 13 (3908 words) Published: April 23, 2015
Delivering the Value Case Study Analysis
Renée Williams

Marketing Management – MKTG – 522-2776

DeVry University, Keller Graduate School of Management

February 8, 2015

Table of contents

Delivering the Value Case Study Analysis1
1.0Introduction3
2.0Brief Description of IKEA4
3.0Industry Analysis & Industry Trends5
3.1 Environmental Impact7
3.1.1.Economic7
3.1.2.Social7
3.1.3.Technological7
3.1.4.Legal8
3.1.5. Political8
3.1.6.Environmental8
3.1.7.SWOT ANALYSIS9
4.0Target Market10
4.1IKEA in China10
4.2IKEA in India11
5.Challenges11
5.1Cultural Environment12
5.2Underdeveloped distribution systems in emerging markets12 6.0Alternative Solutions13
6.1China14
6.2India14
7.0Recommended Course of Action15

1.0 Introduction
In China, as living conditions continue to improve, people are becoming more and more willing to invest in home decoration. People’s increasing purchasing power has driven the furniture market to develop in leaps and bounds. From 2010 to 2013, the sales value of wholesalers and retailers above a certain scale in the industry grew at an average annual rate of 41%. In 2013, the growth slowed down somewhat to 21%, with sales value reaching Rmb195.75 billion.

China’s furniture market has vast room for expansion. Take the furniture replacement market as an example. According to statistics, there were about 438.93 million households in all provinces, autonomous regions and areas directly under the central government in the Chinese mainland. Based on the assumption that people would replace their home furniture once every 10 years, around 44 million households would replace their furniture each year. If each household were to spend Rmb1000 on average, total value of the furniture replacement market would amount to Rmb44 billion a year. However, urbanization, as China’s leading policy of stimulating domestic demand in the years to come, is bound to bolster developing the furniture market. Data from the National Bureau of Statistics of China shows the urbanization rate in China reached 53% in 2012, rising by 1% on average every year. In this urbanization process, wage and salary earners as wells peasant families who have settled in towns and cities have become major consumer groups in the furniture market.

At present, a wide range of products are available on China furniture market and they can mainly be classified into home furniture, hotel and guesthouse furniture, office furniture, and public institution furniture (Wong, B. 2014). 2.0Brief Description of IKEA

IKEA is a Scandinavian company famous for furniture from living rooms to children’s bedrooms. IKEA is among the biggest retailers of furniture in the world that sells more than 10,000 furnishing products from well over 300 stores in approximately 40 countries. The company has more than 600 million visitors to its stores, and its successful website attracts more than 600 million visitors every year. It is easy to think about the present without considering the future. Consumers want more goods and services to improve their standard of living. The problem is they make choices about goods and services that have long-term importance for the environment. In our modern world, organizations need to show responsibility. This means that they use resources efficiently, do not harm the environment and consider how what they do affects the ability of future generations to meet their needs. IKEA aims to be a responsible organization. It sells low-price home furnishing products around the world. These include furniture and accessories for kitchens, bedrooms, living rooms, bathrooms and children’s rooms: IKEA now has stores in approximately 40 countries around the world. It has come a long way in its 60 years of business.

The IKEA vision “to create a better everyday life for the many people” gives IKEA...

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Wong B
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