Case Study IKEA’s Global Strategy: Furnishing the World.
The inadequate marketing research done before entry into the North American market (US) militated against the fast market development IKEA had enjoyed in other market regions. Business globalization should involve flexibility of an organization to adapt to different business culture in diverse geographical market segmentation. IKEA had initially failed the transition test which resulted in slow market growth, the company further failed to anticipate the need of the American consumers.
IKEA’s idea of using paperback catalogue and word of mouth advertisement would only be successful in familiar markets. Furthermore, the use of the traditional Moose image as a form of “one size fits all” promotional approach did not sell in the new market.
Recommendation
Promotion - The 21st century has changed the face of advertisement and relying on paperback catalogue would be grossly inadequate for the wide range of consumers the company targets. Apart from the restricted coverage of paperback brochure, there is a limit to the amount of information the consumer would get about the wide variety of product offered by the company. IKEA should be able to capitalize on various social media marketing medium which facilitate a two way communication between manufacturers and consumer, enabling them to efficiently satisfy the needs of their customers.
Product – IKEA should increase their product line for consumers to have more varieties and options. They should ensure product standardization to ensure uniform quality across their stores. IKEA should work more with local suppliers to adapt product to locality taste.
Price – Further drop in price can encourage patronage and become major comparative advantage for IKEA. They should capitalize on the large economic of scale and more efficient decentralized management to reduce