Executive summary ikea case study

This means that IKEA not only has high-income people but also has customers with medium income.

Ikea joint venture in china 1998

IKEAs well-known brand name srcinated a marketing model concept that shows its strengths. With this in mind, they are able to purchase good quality, economically produced designs that are bought in bulk to keep cost down. IKEA offers standardized products worldwide that are Scandinavian in design worldwide. The agreement has improved the efficiency of Ikeas services in these countries, which was becoming a key issue for the company. The products of IKEA are standardized with an assortment that is universally accepted. Other than these adaptations, IKEA maintained standardization of its concept, its packaging, its distribution characteristics, and a great part of its product characteristics. The European headquarters' excitement to enter new markets with proven best practices is something of the past, proving that the real shift in the global mindset is to recognise that local versus global can bring optimum results. This could make its operations, especially distribution and logistics, a bit challenging. It understood that in emerging markets, global brands may not replicate their success using a low-price strategy. The living standard of people in China is improving steadily and with the opening up of property market by the government interior decoration, design and DIY are becoming popular pastimes. They have been successful because of customer awareness. Chinese people liked the furniture very much but could not afford it.

This strategy gave them the competitive advantage. It took ten years for the U. They prospered during the baby boom wave.

Ikea global expansion case study

Although IKEA offers limited customer assistance it creates opportunities for consumers to choose, transport, and assemble units of furniture that no other furniture company offers. It took ten years for the U. Extensive training for the employees for better service 10? To gain competitive advantage in China IKEA offers fee9 based assembly service because people can buy assembled furniture at cheaper price due to the cheap labor cost in China. Other than these adaptations, IKEA maintained standardization of its concept, its packaging, its distribution characteristics, and a great part of its product characteristics. The main factor were associated with the economical and cultural environment. Globally this was a big hit especially in the 4 USA where people are very good at plumbing, fixing furniture and repairing their home. All materials on our website are shared by users. For India to kick its economy back to the growth rates necessary for meeting the aspirations of its citizens, we need to roll out the red carpet for foreign investors instead of red tape. The company has already faced a number of bureaucratic obstacles in Russia and further hurdles cannot be ruled out, with similar problems potentially arising in China. However, targeting so many different kinds of customers brings about certain weaknesses and threats such as local competition, increasing the amount of product recalls, barriers to enter the market and the higher requirements of the new markets by increasing its online sales and utilizing renewable sources, IKEA will still have a competitive advantage over its competitors. By integrating all of these in the customer experience process the company has maximized its branded customer experience.

The fact that Ikea targets all age groups and households makes it an attractive proposition to a wide spectrum of most countries consumers, especially amongst depressed retail markets, such as Europe at the moment.

IKEA has created a market for creative and innovative designs, high quality, and low affordable prices.

Ikea standardization approach

Harrison, J. With this in mind, they are able to purchase good quality, economically produced designs that are bought in bulk to keep cost down. IKEA had to cut down its prices to a point that was affordable to medium level income people. Make use of local expertise to gain knowledge about culture, history, market potential, social and political trends of the country? There were complaints that the furniture was uncomfortable and designed to big and rigid. IKEA offers standardized products worldwide that are Scandinavian in design worldwide. Free delivery system because in China local furniture stores provide free delivery service? They have successfully learned to meet the U. The global strategies of the organization is low cost and diversification. Indeed, local competitors copied IKEA's designs and then offered similar products at lower prices. The store faced several difficulties and challenges while entering the Chinese market. IKEA has employed the cost of leadership and product differentiation strategies. The market has grown by The development of premium lines, whether within existing stores or through new high street fascias complementing the out-of-town stores, and an increase of sales via the development of e-commerce sites in each country, are both improving customer service, and reducing the volume demand on existing stores. There always will be local manufacturers who will have a lower cost structure.

This paper will provide an analysis of how the company used customer segmentation as a marketing tool to expand the growth of the company internationally.

They launched a new marketing campaign targeting the U. The China expansion came at a cost.

Executive summary ikea case study

The objective of IKEA is to supply exclusive and reliable flat-pack Swedish designed furniture at bargain prices. Challenges IKEA faced many challenges in terms of culture and business practices as well as socio-economic and political conditions in China. IKEA already has had to wait a long time to get permission to open stores in India. By integrating all of these in the customer experience process the company has maximized its branded customer experience. They have always been innovators during their marketing campaigns in the community. The global strategies of the organization is low cost and diversification. Promotion adaptation: different slogans, different images, different channels etc. IKEA has built its stores near public transportation lines, offers local home delivery and long-distance delivery to major cities in China for a fee, maintains taxi 6 lanes, and also offers fee-based assembly services. It took ten years for the U. By not selling through dealers, the company hears directly from its customers. IKEA had to cut down its prices to a point that was affordable to medium level income people. They have successfully learned to meet the U. The European headquarters' excitement to enter new markets with proven best practices is something of the past, proving that the real shift in the global mindset is to recognise that local versus global can bring optimum results. In China, however, it faced peculiar problems.

By not selling through dealers, the company hears directly from its customers. This will mean the first store will take much longer to open than Indians expect and the rollout will be painfully slow. It understood that in emerging markets, global brands may not replicate their success using a low-price strategy.

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Executive Summary