The following points constitute integral elements of ikea business strategy. To cut transportation costs, ikea uses flat packaging. Which entry mode of ikea should be applied in the future chinese market. Asian research journal of business management asia e. Ikeas global branding that promises low prices did not work in china also because western products are seen as aspirational in asian markets. Ikea is one of the most successful and largest furniture retailers in the world, which sells selfassemble furniture, home decoration and daily necessities. Young buyers in search of stylish and fashionable furniture and household accessories at a low cost are ikeas targeted market segment. Due to the spread of globalization and the convergence of markets and economies, it has been increasingly acknowledged that a broad range of products and services can potentially have a global appeal and generate considerable revenues across the world. Globalization of markets means a company no longer separates the world into different national markets.
In the global manufacturing industries, the contribution of furniture industry is around 4% in the total production. Ikea address ethical and social responsibility challenges. Feb 11, 2017 ikea needed to adapt its promotional ways according to the region. Ikeas marketing strategies in sweden, the uk and china article pdf available in journal of retailing and consumer services 183. Ikea prefers the strategy of implementing slight alterations of key product features in. Ikea strategy case study analysis there are few companies which manage to enter a foreign market, establish themselves and take over the market from t. In the global environment, success rests especially on marketing. Ppt ikea powerpoint presentation free to download id. Ikeas international expansion clayton harapiak assistant professor, hongik university seoul, south korea email. This analyses the strategies used by ikea to gain competitive advantage in. More emphasis must be given on improving the understanding of various markets all over the world for a better strategy planning, decreasing the dependency on the current management. The case discusses in length about sweden based ikeas globalization strategies and its foray in the chinese furniture market. Europeans like straight things while us loves witty taglines. Under the big background of economic globalization, ikea sizes every opportunity to entry.
International business strategy of ikea slideshare. Pdf effects of globalization on asian international retailing case. Compared to other furnishing retailers, ikea shows their products in prototype rooms which are miscellaneous and stylish. Summarizing ikea marketing entry strategy in china is a gradual. However, in order to operate on a global level, the company makes many regional adjustments to their marketing campaign. Worlds best powerpoint templates crystalgraphics offers more powerpoint templates than anyone else in the world, with over 4 million to choose from. Ikea is a favorite among customers searching for welldesigned products at low prices. The business model it has been using in sweden suited the swedish audience and not us. For these customers, the firm offers home furnishings that combine good design, functionality and acceptable quality at low prices. Ikea needed to adapt its promotional ways according to the region. Ikeas focused cost leadership strategy finds the firm offering some differentiated features with its lowcost products. Keywords globalization, emerging markets, foreign market entry strategies, market entry modes, franchising. Feb 02, 2014 international business strategy of ikea 1.
It has launched a new sustainability plan to take the company through to 2015. It is achieved by combining function, quality, design and value always with sustainability in mind. As the topics of this thesis are competitive advantage of ikea and ikea in china. Every ikea stores is a unique building with the noted brand symbol and style. Evaluation of ikeas strategic choices and implications. Ikea uses its internal capabilities, external capabilities and ceasing activities to incorporate strategies which make its furniture outstanding in the competitive furniture industry. Pdf standardized marketing strategies in retailing. Founded in sweden more than 50 years ago, ikea stores last year collectively saw more than half a billion visitors and. Vertical integration is an ideal strategy to ikea because its products are well known to be the most competitive in the consumers market. Swot analysis ikea s goals of sustainability and environmental design are central to its business strategy. Ikea begun manufacturing its product in sweden but to lower its costs, ikea decided. This will combine social, environmental and economic issues. How ikea benefits from globalization essay example. Ikea the impact of globalisation definition of globalisation globalisation is the process by which organisations or businesses start operations on an international scale by committing facilities and resources in foreign countries.
Ikea is shifing its marketing strategy, moving away from its traditional focus on rooms to instead put the spotlight on product innovation and showcase how the addition of just a few new things can transform the home. Discuss about the challenges ikea faced in the global market. Effects of globalization on ikea essay example graduateway. Ikea shifts marketing strategy to focus on product innovation. Ikeas international expansion munich personal repec archive. The competitive advantage of ikea and ikea in china.
Ikea group report contains the application of the major analytical strategic frameworks in business studies such as swot, pestel, porters five forces, value chain analysis, ansoff matrix and mckinsey 7s model on ikea. Today the firm is the largest furniture retailer in the world, with 9,000 employees operating in 43. The new wonders can come out of the blue campaign, created by mother, kicks off this week. We use various channels outside the store to explain the full ikea offer, but the starting point is always our customers needs. Ikea subcontracts manufacturing services to manufacturers across the world, and this enables the manufacturers take advantage of their expertise and technology, which eventually reduces costs. Applying a scenario of international expansion, this case provides a thorough. The basic assumption behind ikeas global strategy was onedesignsuitsall, which meant that the company did not adapt to the local markets.
After collect and analysis the information i got, these research questions will be solved. The paper provides a synthesis of the existing global sourcing literature by dividing this growing body of research into three major themes. How ikea adapted its strategies to expand and become. The case discusses in length about sweden based ikea s globalization strategies and its foray in the chinese furniture market. Ikea business strategy is built upon the ikea concept. Level strategy 11 multidomestic strategy 11 global strategy 11 transnational. Globalization of ikea and way forward this process seems extremely important for achieving the following. Moreover, the report contains analyses of ikeas business strategy, leadership and organizational structure and ecosystem. Ikeas globalization strategies and its arrival in chinese furniture market. Ikeas foreign expansion into the chinese market alex bremann term paper business economics business management, corporate governance publish your bachelors or masters thesis, dissertation, term paper or essay. Mar 12, 2015 although ikeas initial target market when it first entered the region was the category of individuals with toptier urban income, it has increasingly adjusted its strategy by reducing prices to accommodate a wider customerbase as is the practice in russia. Product, pricing, and passthrough marianne baxter boston university and nber anthony landry federal reserve bank of dallas and the wharton school november 2012 abstract with over 300 stores in 40 countries, ikea is a major international presence in retail housewares and furnishings.
Ikea will need to apply attitude changing strategy, as ikea s. Ikea was founded in 1943 by 17yearold ingvar kamprad in sweden and it is owned by a. While excellent product quality and affordable prices can be good for penetrating new markets, the way a brand is marketed decides its fortune in the long term. Ikea incorporates environmentally friendly efforts into daytoday business and continuously supports initiatives that benefit causes such as children and the environment. Ikea is a swedish furniture giant founded by ingvar kamprad. Ikea is the largest furniture store in the world, and theyve used some unique strategies to gain their success. This is a international strategy which is incorporated in ikeas. Swot analysis ikeas goals of sustainability and environmental design are central to its business strategy. So, it altered its strategy and started selling products that were more suited to local tastes and needs.
Basically, the company innovated the way people purchase furniture. Moreover, the paper integrates the global sourcing literature. Nov 02, 2019 ikea business strategy is built upon the ikea concept. Companies like practicer, tepehome, kelebak, englishhome, and much more are dealing in online and offline mode while ikea has only franchised stores which mean low infrastructure cost and high visibility. Cost effectiveness is one of the solid bases of ikea competitive advantage. Ikea ensured that their stores were located near public transport. The global furniture retailer is able to offer low prices thanks to a combination of economies of scale and technological integration into various business. Swedish home furnishing giant ikea and its supply network concerning the pax wardrobe system. Summarizing ikea marketing entry strategy in china is a gradual process. Ikea uses swot analysisto help it reach its objectives. Key challenges facing brand ikea for the past years, ikeas cultural branding stands out from other competitors because it blends value into their fashionably designed furniture to ensure that modern household goods are made affordable. How has the globalization of the markets benefited ikea.
Instead, it merges the historically distinct national markets into one single market and sees the globe as a global market. With its typically swedish product range and rigid philosophy of sameness, ikea is going from strength to strength. The basic assumption behind ikea s global strategy was onedesignsuitsall, which meant that the company did not adapt to the local markets. The ikea concept starts with the idea of providing a range of home furnishing products that are affordable to the many people, not just the few. Ikea is known as the furniture giant that spreads swedish culture all over the world. Pdf globalization has encouraged the free flow of products and services across the nations boundaries. This strategy can be used when ikea opens new markets in different countries where there is little competition from companies producing similar products i.
The impact of globalisation ikea essay 3511 words cram. Ikeas global strategy is a winning formula with its typically swedish product range and rigid philosophy of sameness, ikea is going from strength to strength. How ikea overcame the cultural challenge to international. Evaluation of organizations strategic choices and implications furniture industry is one of the most basic industries not only in advanced industrialized countries but also in newly industrialized countries. This is a international strategy which is incorporated in ikeas global strategy. Ikeas global marketing strategy 1106 words 123 help me. The sources of ikeas successful entry into the furniture retail business were ikeas low prices and resilience. How ikea adapted its strategies to expand and become profitable in.
Under the big background of economic globalization, ikea sizes every opportunity to entry foreign markets and nowadays ikea had already become the world wide largest furniture retailer since 2008. What were the sources of ikeas successful entry in furniture retail business in sweden. Ikea globalization strategies and its foray in china free download as pdf file. Market analysis and effects of globalization on ikea. This video examines those strategies while trying to answer the question of why. In the global manufacturing industries, the contribution of furniture industry is around 4% in. Ikea shifts marketing strategy to focus on product. Ikea stores sell readytoassemble furniture, appliances, and household goods.
Ikea marketing entry strategy in china diva portal. This was a massive change in strategy, as ikea was targeting the mass market in other parts of the world. Another example of ikeas corporate strategy in building relationships with suppliers is in vietnam, where ikea has expanded its supply base. Ikea is a business which manufactures and retails furniture at low cost and affordable prices, they also. It also assesses some lessons the company learnt in china that might be useful in india. For a successful global strategy ikea must maximise its strength, minimise its weakness and by taking market opportunity to strengthen its market share image by avoiding all the external threats.
Ikea s supply chain has a global spread with growing sales and purchasing in. Winner of the standing ovation award for best powerpoint templates from presentations magazine. But its not difficult to find on ikea strategy map of china that the most retail stores are concentrate distributed in the firsttier cities, such as beijing, shanghai, guangdong. Globalization and ikea essay example for free newyorkessays database with more than 65000 college essays for studying. Advantages and disadvantages of ikea strategy free essays.
Theyll give your presentations a professional, memorable appearance the kind of sophisticated look that todays audiences expect. There is perhaps no other retailer on the planet that has moved its basic model into so many places with so much success, shoulberg writes. Ikea strategy ikea follows the focused cost leadership strategy. Ikea case study current position, value chain approach, goes forth word count. At business level strategy focus strategies by implementing a cost leadership or differentiation strategy, ikea choose to compete by exploiting their core competencies on an industrywide basis and adopt a broad competitive scope. This case study analyses how ikea adapted its strategies to expand and become profitable in china. Ikeas global strategy is a winning formula marketing week. Pdf effects of globalization on asian international. The overall task is to build the ikea brand and inspire people to come to the stores. B, what is the problem that ikea have in china market. Marketing strategy of ikea ikea marketing strategy. Ikea globalization strategies and its foray in china qualitative. Ikeaa success of porters generic strategies combination. The main assumption of ikeas global strategy is that one design suits all.
Ikeas globalization strategies and its foray in china. In uk, they launched stop being so english campaign, which was bold but brought people to ikea in usa, ikea build furniture based on the sets of popular tv series theme, ex. How ikea adapted its strategies to expand and become profitable in china. Oct 02, 2016 besides, ikea follows differentiation strategy to some extent.
Which factors would influence ikea timing of entry in chinese market. A superb article here from reuters which examines the challenges facing ikea as it accelerates its expansion into key emerging markets, notably china and india on the one hand, ikea aims to exploit its global brand by applying the core retailing concept epitomized by the store racetrack layout, flatpack goods etc and core values that have enabled to it to become the worlds largest. Nov 15, 2018 soon ikea realized that the local culture was a challenge and there was a definite need to adapt to it. Ikea is a swedish multinational group which was founded in 1943. The case presents how ikea was forced to change some of the elements of its global strategy in the culturally diverse chinese. Soon ikea realized that the local culture was a challenge and there was a definite need to adapt to it. Ikea offers nearly 1200 items to the home furnishing market in world wide. Price of furnitures 200 100 0 ikea could reduce the price of the klippan by some 40 % between 1999 to 2006. Jan 16, 2017 the furniture retail giant explains to cnbc its u. Source india conference on globalization in bangalore. Ikeas international expansion clayton harapiak assistant professor, hongik university seoul, south korea. The new wonders can come out of the blue campaign, created by. As a result, ikea is not as swedish as it presents itself.
259 1053 523 906 1192 722 860 1471 940 1284 230 511 262 1094 540 20 309 60 333 1352 1545 544 1263 920 1013 1010 113 1368 1199