IKEA'S GLOBAL STRATEGY: FURNISHING THE WORLD

1
IKEA'S GLOBAL STRATEGY FURNISHING THE
WORLD

• ???????? ??? ??? ???

2
1) What are IKEA's firm-specific advantages?
Country-specific advantages?

• IKEA's firm-specific advantages are as follows
• 1. Product Design
• In China, IKEA has already gone beyond
  the corporeal concept of household goods, and
  become a fashion, life taste of live specimens.
  Many consumers like the decoration in their own
  homes before to take a look at the IKEA shopping,
  in the light of IKEA's design Style of dress to
  their small nest. IKEAs products are, in fact,
  smooth, simple and practical follow-oriented
  features, the rational pursuit of the typical
  Nordic style, Ikea's design department well to
  combine art and the market, developed in line
  with the style of IKEA customers and meet the
  requirements of the product.

???
3

• 2. Economic procurement strategy
• In addition to the Chinese mainland
  IKEA prices somewhat on the high side, the other
  in the global market, IKEA has been low-cost
  high-quality image, that benefit from its
  economic procurement strategy. IKEA in the choice
  of suppliers for the product, as a whole to
  consider the lowest overall cost.

???
4

• 3. Packaging
• Although the furniture in the assembly
  is nothing new, but Ikea is the first to put
  flat-packed into a mode of operation. It was one
  sudden inspiration of Ikea staff, he amputated
  legs of the table, so that not only can be loaded
  on the table Vehicles, but also reduces the
  possibility of damage, but also saves the cost of
  transport. In this way, IKEA has made a problem
  into a opportunity to create a flat-packed first.
  Today, flat packaging has become a large number
  of household goods manufacturer of generic model,
  designed to be removable furniture parts,
  flat-packed in the material, so greatly reduce
  the volume of furniture.It saves a lot of
  unnecessary transportation costs.

???
5

• 4. Marketing
• Various markets around the world, IKEA's
  marketing strategy is consistent, which is
  relying on the market to buy display, catalog
  marketing as well as flat packs to win the trust
  of consumers.

???
6
2)What are the cultural factors which make
expansion abroad in retailing difficult? What has
made it possible in IKEA's case?

• The retailers that are operating
  internationally have to face with great
  challenges,because countries differ from one
  another in many respects, such as their economic
  base, history, environment and neighbours.Cultural
  Barrier is one of great challenges.The cultural
  factors which make expansion abroad in retailing
  difficult are as follows

???
7

• 1)Material culture
• Material cultule determines the way of
  peoples life. There is a big difference between
  developing countris and developed countris in
  this respect.
• 2)Language
• Language barrier makes retailers
  difficult or even impossible to communite with
  customers in target market .
• 3)Religion
• Religion is an extremely serious
  issue. Violation of thereligion rules will have
  very serious consequences, which is a retailer
  must know before it entry a target market.
• 4)Custom and manner
• It is hard to change peoples customs
  and manners.Retalers have to learn and adapt to
  them.

???
8

• IKEA has made it possible
• There is an old saying in china Know
  the enemy and know yourself, and you can fight a
  hundred battles with no danger of defeat? IKEAs
  localization strategy make it successful in many
  countries.
• When IKEA enters a country, there will
  be smaller shops setting up in order to adapt to
  the local environment.Some positive actions will
  be taken, like learning the local customs and
  manners, respecting customers faith, and
  employing some local staff to overcome the
  language problem.

???
9

• 3)Describe how IKEA'S expansion has
  re-energized mature markets around the world and
  changed the competitive situation.
• ??IKEA's product strategy
• ??Low-price strategy
• ??Unique style of the channel
• strategy
• ??Promotion strategy

???
10

• ??IKEA's product strategy
• 1?Accurate market positioning
• IKEA's business philosophy is to
  "provide a wide range of aesthetic and practical,
  ordinary people could afford to buy domestic
  goods."
• 2?Products in style, and favorable sales
• IKEAs products were sold by IKEA's
  independent design, product unique style. IKEA
  products stressed that "simple, natural, fresh,
  well-designed" unique style

???
11

• 3?A beautifully designed and durable products
• IKEA has always stressed the exquisite
  product design, practical and durable. Of course,
  simply-designed, it is not difficult, but on the
  basis of low prices, being beautiful, practical,
  high-quality at the same time is much more
  difficult.
• 4?Extensive product line
• IKEAs products range widely, for a
  total of more than 10,000 kinds of products that
  customers could choose. Basically, any taste of
  the customers can buy furnitures which he/she
  needs for home in IKEA.

???
12
??Low-price strategy
1?Low prices on the idea of product design
IKEA's R D system is very unique, low-cost and
can become an efficient one. 2?IKEAs innovation
to reduce costs IKEA use new materials and
new technology to improve performance and reduce
prices continuously. 3?IKEA and customers
co-operate to build a low price. 4?IKEA's global
production management and logistics
system 5?Flat packaging strategy to reduce costs
???
13

• ??Unique style of the channel
• strategy
• 1?Self-control shopping channel
• 2?Succeeded in IKEA stores have become a symbol
  of life

???
14

• ?? Promotion strategy
• Directory display -IKEA marketing
  strategy- is an important part of the IKEA
  product sales. In 1951, the first catalog of the
  IKEA issued. Since then, every year in September,
  IKEA gave its consumers free charging for
  exquisitely directory at the beginning of its new
  financial year.

???
15
4)How does the TV advertising campaign initiated
by IKEA overcome the entry barrier of high
advertising expenditures ?

• In order to answer this question, we should find
  out the target market of IKEA----People who are
  young, highly educated, liberal in their cultural
  values, white-collar workers, and not especially
  concerned with status symbols. That means all the
  people are not able to understand these new and
  accept them . So, TV advertising may not be a
  best way for IKEA to choose in commercial-making,
  for they are faced to all the people in different
  ages ,and cost a lot as well. Instead of making
  TV commercials ,IKEA created several new way in
  promotion.

???
16

• 1. IKEA s promotion is centered on the
  catalog of new types. These catalogues are
  carefully designed and beautifully printed, and
  are sent to the customers for free. The IKEA
  catalog is printed in 13 languages and has a
  worldwide circulation of well over 50 million
  copies. With these catalogues , information of
  new furniture products , new convictions of IKEA
  ,and even solutions of furnishing life can be
  given to the customers. This will enable the
  customers to learn concepts of furniture-making
  and gain inspiration and inventions by scanning
  these fascinating catalogues. A way like this of
  publicizing products can be more efficient and
  superior to any other forms .

???
17

• 2. Beside that, in 2002, a series of 8
  minutes TV plays , showing the customers how to
  solve problems in decorating furniture and
  providing them with a comfortable environment to
  know more about IKEA s products and services.
  The TV plays were played once a week in Shanghai
  and Beijing from Sept.13 and had a great effect
  on promoting .

???
18

• 3. Recently ,in Sweden ,IKEA and Forsman
  Bodenfors are back with a crazy"in the
  wardrobe"experience. A great branding campaign
  where music plays a key role to entertain and
  drive further exploration of the site.
• The characters in each room are weird
  enough to get your attention and make you wonder
  "what the hell is going on here?". From the
  superheroes to the mustached twins, Ikea seems to
  be able to content (and contain) everybody
• That is the secrete of IKEA s
  avoiding from substantial advertising
  expenditures.

???
19
5)Should IKEA expand further in the United States
or focus on other countries?

• As the biggest Home Furnishings
  Retailer which has a large number of chain stores
  all over the world, IKEA should take the market
  of the United States and that of other countries
  as equal.
• 1. As we know, the IKEA Concept is
  based on creating well-designed and functional
  home products for people at prices so low that as
  many people as possible will be able to afford.

????
20

• Though , generally speaking, most
  of the Americans are now living in a higher life
  label than the worlds average standard , there
  are still people who are not able to afford
  quality furniture. So the promotion in America
  market should keep running ,moreover, more
  competitive and efficient promotion strategies
  are required.
• 2. In other countries , IKEA
  furniture is easier to be strongly competitive,
  for there is more possibly to be less risk and
  competitors who are handling quality house
  furnishings, and , more people who can only
  afford house furniture at a relevant lower price.
  This is a good opportunity which IKEA has been
  long for.

????
21
conclusion

• IKEA is a global company ,its target
  market should not be limited in a area.

????
22

• Thanks for watching !
• Wish you the best of luck in everything you do !