International Market Operations: IKEA Case Study

Topics: Ingvar Kamprad, IKEA, Älmhult Municipality Pages: 2 (993 words) Published: October 23, 2014

What was the source of IKEA’s success in Sweden early on (50s and 60s)? In 1943, IKEA was founded by Ingvar Kamprad at his home town, selling mainly pencils, postcards and other merchandise. From late 40s to early 50s, manufacturing furniture was introduced as a complement to general merchandise. This enabled Kamprad to step in the furniture business and exploring situation and finding new opportunities. The business had gain massive success in the domestic market for the since opening and the key to its achievements is Kamprad’s leadership. He not only had the vision for the furniture industry, market’s situation, and enthusiasm for business, but Kamprad also played an important role in managing the company’s resources, turned it into capabilities and prove IKEA’s distinctive core competencies. Example for that can be IKEA’s leap on the furniture retail industry: more affordable products to target the large amount of customer, showroom and store’s concept, better customer experience… IKEA’s strategy and business model was also the company’s source of success. IKEA’s prioritize the need of customer, in which price and product range rank the first when it comes to satisfy customer demand, following by IKEA store, catalogue… Marketing strategy was also totally different from other market player at that time, with free and comprehensive catalogues, IKEA was able to introduced customer with a new shopping experience. IKEA’s simple objectives were also needed for its growth. IKEA stated that low costs in all operations are prerequisites for the lowest prices. Low prices give big volumes in sales and long-term profits for IKEA. How was IKEA able to apply this source of success to the international markets when this industry is clearly domestic? At the moment when the domestic market was already saturated and demand for furniture had decreased, IKEA’s business model haven’t been widely accepted by competitors’ in the industry, and similar situation at the...
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