IKEA’s Global Strategy IKEA (www.ikea.com) is a nearly $30 billion global furniture powerhouse based in Sweden. With more than 301 stores in 37 countries, the company’s success reflects founder Ingvar Kamprad’s “social ambition” of selling a wide range of stylish, functional home furnishings at prices so low that the majority of people can afford to buy them. The story of Kamprad’s success is detailed in a book titled IKEA: The Entrepreneur, the Business Concept, the Culture. The store exteriors are painted with Sweden’s national colors, bright blue and yellow. Shoppers view furniture in scores of realistic settings arranged throughout the cavernous showrooms. In a departure from standard industry practice, IKEA’s furniture bears names such as “Ivar” and “Sten” as well as model numbers. At IKEA, shopping is very much a self-service activity—after browsing and writing down the names of desired items in the showroom, shoppers pick their furniture off shelves, where they find boxes containing the furniture in kit form. One of the cornerstones of IKEA’s strategy is having customers take their purchases home and assemble the furniture themselves. The typical IKEA store also contains a Swedish-cuisine restaurant, a grocery store called the Swede Shop, a supervised play area for children, and a baby-care room. IKEA’s approach to the furniture business enables it to rack up impressive growth in an industry in which overall sales are flat. Sourcing furniture from more than 1,500 suppliers in 50 countries helps the company maintain its low-cost position. IKEA has also opened stores in emerging markets, such as in Central and Eastern Europe. Because many consumers in those regions have relatively low purchasing power, the stores offer a smaller selection of goods, and some of the furniture is designed specifically for the cramped living styles typical in former Soviet bloc countries. Throughout Europe, IKEA benefits from the perception that Sweden is the source of high-quality products. In fact, one of the company’s key selling points is its “Swedishness.” IKEA also operates in emerging markets like Russia, where its core strategy and anti-corruption policies have been effective. Industry observers predict that the United States will eventually be IKEA’s largest market. The company opened its first U.S. store in Philadelphia in 1985 and today has dozens of outlets that generate billions of dollars in sales annually. IKEA’s competitors take the company very seriously. Jeff Young, the chief operating officer of Lexington Furniture Industries, says, “IKEA is on the way to becoming the Walmart Stores of the home-furnishing industry. If you’re in this business, you’d better take a look.” Some U.S. customers, however, are irked to find popular items sometimes out of stock. Another problem is the long lines resulting from the company’s no-frills approach. Complained one shopper, “Great idea, poor execution. The quality of much of what they sell is good, but the hassles make you question whether it’s worth it.” Goran Carstedt, president of IKEA North America, responds to such criticism by referring to the company’s mission. He notes that IKEA’s ability to keep prices low rests on the strategy of providing limited services. Customers return to IKEA despite having to make some small sacrifices because they value the company’s low prices, he says. To keep them coming back, IKEA is spending millions on advertising to get its message across. Whereas common industry practice is to rely heavily on newspaper and radio advertising, two-thirds of IKEA’s North American advertising budget is allocated for TV. John Sitnik, an executive at IKEA U.S. Inc., says, “We distanced ourselves from the other furniture stores. We decided TV is something we can own.” Incredibly, IKEA has also expanded into an apartment building. The retail giant has 3,500 of its prefab homes throughout Sweden, Norway, Finland, and the United Kingdom. IKEA’s BoKlok (meaning “smart living” in Swedish) apartments resemble IKEA’s modern furniture. The apartments are designed with open-plan living spaces with high ceilings, windows on three sides, and, of course, pre-fitted IKEA kitchens. Thinking Globally Has IKEA taken a standardization approach or an adaptation approach in its markets around the world? Do you think the company’s approach is the right one for the future? Explain. Which retailers are IKEA’s biggest competitors in the United States? Why? When company founder Kamprad decided to expand into China, his decision was not based on market research but, rather, on his own intuition. How well is IKEA doing in China? Did Kamprad’s decision pay off? After failing in Japan two decades earlier, IKEA returned in 2006. Conduct some research into how IKEA fared the second time around in Japan. Was IKEA able to avoid the mistakes it made in its first failed attempt?
We always make sure that writers follow all your instructions precisely. You can choose your academic level or professional level, and we will assign a writer who has a respective degree.
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document.
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension.A 100% refund is guaranteed.
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text.
Tutorpro support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Tutorpro Homework Help Services
At Tutorpro, we have top rated masters and PhD writers who will help you tacke that homework and score A+ grade. Tutorpro services covers all levels of education : high school, college, university undergraduate, masters and PhD academic level.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Tutorpro academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. This is free because we want you to be completely satisfied with the service offered.