A firm advantage of IKEA is they have a dedicated supplier network so they are able to offer quality furniture at low prices. IKEA reaps huge economies of scale from the size of its stores and the big production runs necessary to stock them since the same furniture is sold all over the world. Since IKEA saves, they are able to match their rivals on quality and still manage to undercut their furniture by 30 percent. A country advantage is they have more than 2,300 suppliers in 67 countries. 2.
Cultural factors that can hinder market expansion abroad or local preferences, customs, and attitudes. Just because your product is accepted in one country, another country may not value it. IKEA has been able to rise above the cultural factors in their way by adapting their marketing strategies to each market. For example, in Canada, they incorporate the moose to signify “the north”, or in the U.S., they had to add more media advertising. 3.
IKEA is an example of how market expansion can prove successful if you have the right strategies. As IKEA takes over the furniture industry globally, it shows there is a profitable spot in the furniture industry and inspires competitors to enter the market. More competitors will also seek to expand globally. 4.
The 8 television advertisements featured customers at different transitional stages in their lives, where they were most likely to be in the market for furniture. The advertisements had an innovative and positive effect on IKEA’s image. 5.
IKEA should further expand in the United States and seek to focus on other countries, because they have been successful thus far. They should, however, be cautious of overexpansion.
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