...Stirling FK9 4LA, Scotland, UK Department of Business Administration, Lund University, P.O. Box 7080, SE-220 07 Lund, Sweden c Department of Communication Studies, Lund University, Campus Helsingborg, PO Box 882, SE-251 08 Helsingborg, Sweden b a r t i c l e in fo Available online 29 September 2010 Keywords: IKEA Retail internationalisation Retail marketing mix Standardisation Sweden the UK China abstract IKEA is often cited as an example of a ‘global’ retailer which pursues a similar ‘standardized’ approach in every market. This paper systematically assesses the degree of standardisation (and adaptation) of four commonly identified retail marketing mix activities – merchandise, location and store format, the selling and service environment, and market communication – within three countries. These countries – Sweden, the UK and China – represent different cultural settings and are markets in which IKEA has been operating for different lengths of time. The data upon which the comparison is based was generated from personal interviews, in-country consumer research, company documentation and third party commentaries. The conclusions drawn suggest that whilst IKEA operates a standardized concept, degrees of adaptation can be observed in customer facing elements, and in the supporting ‘back office’ processes which support these elements. These adaptations arise from differences in consumer cultures and the length of...
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...Case Report Marketing Case 8: IKEA’s Global Strategy: Furnishing the World I.Situation Analysis IKEA is a privately-owned international furniture manufacturer known for its low prices and unique style. The company’s vision is to create a better everyday life for its customers by offering a great selection of well-designed, practical home furnishings. Since IKEA has chosen this sort of affordable and distinctive marketing strategy, the company has been very successful in its expansion throughout the world. IKEA has been successful with a relatively standardized product and product line in a business with strong cultural influence. This is because: The founder formulated IKEA’s mission which states that IKEA offers wide variety of home furnishings of good design and function at prices so low that the majority of people can afford them. Such wide variety could fit a wide variety of cultures and tastes. The case studies also states that the assortment of goods are universally accepted. The principal target market of IKEA is similar across all countries and regions and is composed of people who are young, highly educated, liberal in their cultural values,white collar workers, and not especially concerned with status symbols.Most people in the IKEA target market are liberal in their tastes,preferences and cultural norms hence making them easy to accept and appreciate IKEA’s standardized products. II.Problems Found in Situation Analysis ...
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...Strategies Three value strategies have been emphasized by IKEA which includes best product, best price and best service. Ikea customers do more than purchase Ikea products, they identify with the culture and authenticity which Ikea has attached to its products to attract more customers. The Management of IKEA said, “It’s not what you say about your Ikea furnishings that matters, it's what the Ikea furnishings say about you”. (Kerin, Hartley & Rudelius, 2010). 4.1 Best Product Value Strategies IKEA have become popular over the years as cited by Michmann and Mazze (2001) due to their product’s value, in terms of quality, style, affordability, functionality and durability,. Their products are well designed, modern, functional, and durable, of high quality, competitive prices and IKEA have a wide range of products and styles. Ikea is well known for bringing low-cost products to consumers, its mission statement focuses on improving customers' lives by bringing them good quality at good value. IKEA’s mission statement is expressed in the very structure of the store which pairs its warehouse with its sales floors. The products are displayed in a Spartan, albeit attractive, manner, and a sense of economy permeates the store. The products themselves are streamlined, uncomplicated and tailored so that the strong point is function over fashion, giving consumers a more fresh idea of acquiring which ever they need. IKEA ensures quality, style and functionality by having their own...
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...IKEA Analysis Report Your Name Argosy University IKEA’s Marketing IKEA has a unique perspective with the approach they use in marketing. The starting point begins with customers’ needs (IKEA, 2013). The focus is on local marketing versus mass marketing and competitors. This differentiates IKEA from other home good suppliers by anticipating what consumers are seeking and many times providing exactly they desire before they realize they need it. The marketing task is simple, “To build the IKEA brand and inspire people to come to the stores” (IKEA, 2013). The marketing mix is a combination of items that work together; it is often referred to as the four p’s in marketing. Price, Promotion, People, and Process are the four p’s that IKEA has embraced. Price is within their controls, they offer quality home goods at low affordable costs. They are able to keep costs low with designing from within, sourcing raw materials for production, and selling in their own stores. Promotion is achieved with iconic bold blue and yellow colors signifying a brand with value. IKEA uses many forms of media in their promotional marketing strategy; the annual catalogue is the most popular. The catalogue highlights many new home goods and accessories with interior suggestions that are attention grabbing and captivating. The catalogue has become a staple of what is new and trending in the homes of many customers. IKEA’s website is another interactive way it reaches a distinct local market, along...
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...click on the "print" button in your browser to print this page. The IKEA Concept The IKEA Concept is founded on a low-price offer in home furnishings. Concept The IKEA Concept is based on offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. Rather than selling expensive home furnishings that only a few can buy, the IKEA Concept makes it possible to serve the many by providing low-priced products that contribute to helping more people live a better life at home. The IKEA Concept guides the way IKEA products are designed, manufactured, transported, sold and assembled. All of these factors contribute to transforming the IKEA Concept into a reality. How the IKEA Concept Began The IKEA Concept began when Ingvar Kamprad, an entrepreneur from the Småland province in southern Sweden, had an innovative idea. In Småland, although the soil is thin and poor, the people have a reputation for working hard, living frugally and making the most out of limited resources. So when Ingvar started his furniture business in the late 1940s, he applied the lessons he learned in Småland to the home furnishings market. Ingvar's innovative idea was to offer home furnishing products of good function and design at prices much lower than competitors by using simple cost-cutting solutions that did not affect the quality of products. Ingvar used every opportunity to reduce costs, and he scraped...
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...The reason behind choosing the IKEA is because IKEA is one of the world’s most successful retailers. IKEA is a global furniture brand inspired by the egalitarian society of its Swedish heritage and appears to the public to be forever Swedish. It expands its retail stores all over the world including North American, European Middle East and Asian countries but also spreads a kind of its own a highly strong business culture and values with a strong Swedish image to other countries through the establishment of business there. History: IKEA was founded in 1943 in Sweden by Ingvar Kamprad. Kamprad was born in 1926 as the son of a farmer in Småland, a region in southern Sweden. At the age of five Ingvar Kamprad starts selling matches to his nearby neighbors and by the time he is seven, he expands to selling flower seeds, greeting cards, Christmas tree decorations, pencils and ball-point pens. In 1943, at the age of 17, Kamprad became an entrepreneur and created a commercial company called "IKEA." The word IKEA was an acronym of his name and “Ingvar Kamprad” and the address, the name of his farm and village: “Elmtaryd, Agunnaryd”. Company initially sold fish, vegetable seeds, and magazines to customers in his region. Then in 1950 IKEA added furniture and home furnishings to the product line. IKEA entered new markets around the globe in the 1980s. IKEA expands dramatically into new markets such as USA, Italy, France and the UK. Operating Environment: Ikea is the world's largest furniture...
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...MGNT 3650 June 12, 2011 Chapter 1 Closing Case-IKEA How has the globalization of markets benefited IKEA? Globalization of markets has benefited IKEA by making it easy to expand into different countries. Now that the whole world has excess to the internet, everyone is basically wearing and listening to the same things. This is very beneficial to IKEA because there isn’t a lot the company has to do with the style they originally started in Sweden. With the globalization of markets it makes it easier for customers to buy products from IKEA online or at the warehouse with their country “social” demographics and culture in mind. “The worldwide success of a growing list of products that have become household names is evidence that consumers the worlds over, despite deep-rooted cultural differences, are becoming more and more alike - or, as the author puts it, "homogenized." In consequence, he contends, the traditional MNC's strategy of tailoring its products to the needs of multiple markets may put it at a severe disadvantage vis-a-vis competitors who apply marketing imagination to the task of developing advanced, functional, reliable standardized products, at the right price, on a global scale.” How has the globalization of production benefited IKEA? This has saved IKEA time and money. IKEA has producers to supply each of its big markets; it helps by knowing the styles of each market. For example the producer for...
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...Executive Summary Background IKEA, the world’s largest home furnishings retail chain, was founded in 1943 by a Swedish entrepreneur Ingvar Kamprad. IKEA offers standardized products worldwide that are Scandinavian in design worldwide. The unique idea of this famous brand is to offer the option of assembling products to customers. The design of the furniture is very modern and light as it is made of particleboard. The products are of contemporary design and function with the concept that is based on low price. High quality, convenience, affordability, consistency, functionality and good design are the essence of this world class home furnishing retailer. Challenges IKEA faced many challenges in terms of culture and business practices as well as socio-economic and political conditions in China. The biggest challenges were pricing, copycat producers and cheap labor cost for assembled furniture. Alternatives To make the price more affordable for Chinese consumers IKEA has developed manufacturing units in China and collects raw materials locally. Due to country specific environment IKEA chose franchising in China. Because of cheap labor cost of Chinese assembled furniture IKEA offers reasonable fee-based assembling services. IKEA has built its stores near public transportation lines inside cities since only 20% of customers own cars in Shanghai. Recommendations IKEA needs to find more local suppliers to keep price lower. To understand local culture and purchasing habit,...
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...10 Keys to IKEA's Low Prices Just how does IKEA manage to offer such consistently low prices? Many people think that it's because the furniture is made cheaply, which isn't exactly true. Read on to find out about some of IKEA's less obvious cost-saving strategies. 1 Recycling The Recovery Department (of which, the AS-IS room is part) is responsible for sorting and recycling all recyclable materials, including packaging broken down in-store as well as materials collected from customers at recycling donation bins where available. 2 AS-IS Products not suitable for sale at the full retail price (floor samples, returns, items damaged in shipment, etc.) are placed for sale in AS-IS, generating revenues that might otherwise be lost to waste. The Recovery department also recoups parts from damaged items, making spares available to customers who need them. 3 Waste Reduction IKEA's designers and engineers strive to reduce the amount of material used and wasted in production. Additionally, many waste products are then used to make new products, further reducing overall costs both to the pocketbook as well as to the environment. 4 Automatic selling Despite the showrooms showcasing IKEA furniture in real living arrangements (typically located upstairs), IKEA is a warehouse store designed to maximize customer self-sufficiency with minimal reliance on staff assistance. Cost savings stem from reduced wages, training costs and lower design, maintenance and outfitting...
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...International Marketing Review Emerald Article: Strategic consequences of retail acquisition: IKEA and Habitat Gary Warnaby Article information: To cite this document: Gary Warnaby, (1999),"Strategic consequences of retail acquisition: IKEA and Habitat", International Marketing Review, Vol. 16 Iss: 4 pp. 406 - 417 Permanent link to this document: http://dx.doi.org/10.1108/02651339910282027 Downloaded on: 25-01-2013 References: This document contains references to 17 other documents Citations: This document has been cited by 3 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 5839 times since 2005. * Users who downloaded this Article also downloaded: * Gary Warnaby, (1999),"Strategic consequences of retail acquisition: IKEA and Habitat", International Marketing Review, Vol. 16 Iss: 4 pp. 406 - 417 http://dx.doi.org/10.1108/02651339910282027 Gary Warnaby, (1999),"Strategic consequences of retail acquisition: IKEA and Habitat", International Marketing Review, Vol. 16 Iss: 4 pp. 406 - 417 http://dx.doi.org/10.1108/02651339910282027 Gary Warnaby, (1999),"Strategic consequences of retail acquisition: IKEA and Habitat", International Marketing Review, Vol. 16 Iss: 4 pp. 406 - 417 http://dx.doi.org/10.1108/02651339910282027 Access to this document was granted through an Emerald subscription provided by LIMKOKWING UNIVERSITY OF CREATIVE TECHNOL For Authors: If you would like to write for this, or any other Emerald publication...
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...furnishing products at prices so low that as many people as possible will be able to afford them." Introduction At the outset, it may be useful to characterise IKEA in terms of the characteristics of demand (also known as the four Vs, see Slack et al. p 20). First, IKEA is clearly a high volume operation – as indeed most international retailers are – which lends to systematising operations but which implies capital intensive processes and therefore cost considerations will be crucial. Second, IKEA offers a large number of products (up to 14000 depending on the country/store) so there is high variety in the production process which not only leads to the need for complex and flexible processes but also entails high unit costs. Third, variation in demand will however be low, or at the least predicable (holiday periods for example) so advanced planning is possible which eliminates the need to set resources aside as a “capacity cushion” for unexpected demand. Lastly, IKEA – again as most retailers – have high process visibility, or in other words display a high degree of direct customer experience, which underlines the importance of dedicating sufficient attention to the shopping experience in all its facets. In what follows, and in line with the questions for this TMS, the implications of the five performance objectives to IKEA will be examined as well as the company’s key operational decisions that have impacted on these objectives. Thereafter 1. Question 1 There are five...
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...Executive Summary IKEA is the world's largest furniture retailer and the world's third-largest consumer of wood, behind The Home Depot and Lowe's. The company is known for its modern architectural designs on various types of appliances and furniture, often associated with a simplified eco-friendly interior design. They are owned and operated by a complicated array of not-for-profit and for-profit corporations. The corporate structure is divided into two main parts: operations and franchising. Older IKEA stores are usually designed in a one-way layout, designed to encourage the customer to see the store in its entirety as opposed to a traditional retail store. IKEA has suppliers in 50 countries, roughly ⅔ of purchasing is from Europe with about ⅓ from Asia but for most of its products, but the final assembly is performed by the end-user. They also have 28 distribution centers and 11 customer distribution centers in 16 countries using flat packs, transporting goods where possible by rail and sea, and utilizing fuel-saving techniques that allow them to be cost-effective and environmentally friendly. Their consumers are often the means of out-bound logistics, responsible for picking up and transporting the products. There's no room for wasted space in product packaging. Logistics roles exist at every stage in the supply chain at IKEA, from the moment a product leaves the manufacturer to the moment it is in the hands of the customer. The in-store logistics manager uses a proprietary...
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...1. previousnext 2. previousnext 3. previousnext 4. previousnext 5. previousnext 6. previousnext 7. previousnext 8. previousnext 9. previousnext 10. previousnext 11. previousnext 12. previousnext 13. previousnext 14. previousnext 15. previousnext 16. previousnext 17. previousnext 18. previousnext 19. previousnext 20. previousnext 21. previousnext 22. previousnext 23. previousnext 24. previousnext 25. previousnext 26. previousnext 27. previousnext 28. previousnext 29. previousnext 30. previousnext 31. previousnext 32. previousnext 33. previousnext 34. previousnext 35. previousnext 36. previousnext 37. previousnext 38. previousnext 39. previousnext 40. previous Post a comment 1. DHL DHL provides international express, air and ocean freight, road and rail transportation, contract logistics and international mail services to its customers. The company’s name DHL is derived from the last names of the then three budding entrepreneurs, Adrian Dalsey, Larry Hillblom and Robert Lynn who founded the company. (Photo: Getty Images) 2. IBM IBM’s full company name is International Business Machines Corporation. It is a multinational technology and consulting corporation. The company was founded in 1911 and headquartered in the United States. (Photo: Reuters Pictures) 3. TLC The specialty cable channel TLC is the initials...
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...IKEA Executive Summary Founded in 1943 by entrepreneur Ingvar Kamprad, IKEA first began with sales of inexpensive products such as pens, watches, and jewelry. Soon after, IKEA started selling furniture and published a catalog in 1951. With its Scandinavian and contemporary style, IKEA's business model of furnishing simplicity and do it yourself furniture has taken the company from a catalog based company to a multimillion dollar company. The company has grown to over 253 outlet stores in 37 countries and making itself known as a global brand of do it yourself furnishings at a lower cost than most furniture retailers Marketing strategies IKEA’s success is based on principal marketing strategies that remain the same throughout the world, which include a catalogue that is printed in 52 editions in 27 languages and has a worldwide circulation of 200 million copies, and the use of the colors of the Swedish flag blue and yellow in the IKEA logo. This is combined with an emphasis on customer freedom and choice with regard to buying and taking home products, and low prices intended to create a “sale” mentality amongst customers. This aggressive price strategy coupled, with a wide product range catering for every potential lifestyle and life stage of a consumer, can best summarize the company’s recipe for success. 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...
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...Challenges Faced By IKEA:- Here are some of the challenges I found from the case study- * I kea’s low valued products used excessive space on load units due to packaging design which resulted in poor efficiency in both transportation and warehouse operations that created unnecessary costs. * Involvement of suppliers was a challenge as solving the problem affects the packaging design as it affects the product design too as it got to adapt to the new packaging design where manufacturing processes are affected too. * To discover new ways to reduce unnecessary space in packaging without altering the product design. * Eliminate the problems related to filled air that takes a lot of unnecessary space during transportation and storage by finding out new methods for packaging. * Another challenge would be Increase in density of the packaging would create overload and to balance the load on the trucks is to use lightweight products to fill up the left over space. That is in short to Load balance the products of different volumes to fill transportation units in regard to both weight and volume. * For the above balancing scenario it is important to convince suppliers for a cluster supplier concept by storing one company’s product by another supplier in order to reduce space related problems. Strategic Implementation:- * Implementation of cluster supplier concept for Glimma tea candles where a major supplier of IKEA takes responsibility for storing...
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