IKEA’s Case Study Example
Ingvar Kamprad founded IKEA in 1943 for selling wallets, stationery items, and photo frames. By 1985, IKEA started manufacturing furniture from local manufacturers. They developed furnishings for flat packs and self-assembly, which is the trademark of the enterprise. IKEA opened its first kitchenware store in Almhult Sweden.
Currently, IKEA is the largest retail store that operates in 24 countries, out of which 16 locations get operated by the store franchises. IKEA corporate group operates across two Asian countries. One is Japan, and the other being China.
The company makes use of geographical, demographic, and psychographic segmentation strategies. It helps IKEA adapt to the evolving market dynamics of the electronic, and home furnishing industry.
The business follows a differentiated customer targeting strategy to serve the demands and needs of the customers, who are on the lookout for value-based furnishing solutions.
The business emerged from being a product-based company to positioning itself as a value-based enterprise.
IKEA’s Competitive Advantage
Collaborating with world-class interior designers, and testing their products to meet the customer needs gives IKEA a competitive advantage.
Serving aesthetically designed, affordable, and eco-friendly furniture at low prices will always be the driving force for business growth and sustainability.
IKEA gained the popularity and trust of the customers, and employees working for the company. Moreover, the long-term partnership has helped it to deliver, and products at the same time.
A long hole strategic partnership with the Supply chain has helped the company to supply the products and/or services on time,
Ikea coordinates with its supply chain like individuals supplying raw materials designing clothes, developing products, and working in the stores to make the products available to customers all over the world.
As per the sources, the business had already partnered with more than one thousand and three suppliers across 52 countries. Hence, it helps them to maintain the quality of appliances and Kitchenware creative stores all over the world.
IKEA’s brand equity
Branding is a crucial factor when it comes to Promoting or marketing your products. The activities related to corporate social responsibility, Affirmative word-of-mouth, And empowering the coworkers helped to improve brand awareness and Popularising the enterprise even in places where they are not present.
IKEA’s BCG matrix
In the BCG matrix, the places in developing countries where IKEA offers furnishing solutions, the products are a star. It is due to the large demand and sale of the product offered by the store.
On the contrary, in places where there is low demand and inclination of customers towards services and/or products offered by the company, there is a question mark in the BCG matrix.
Competitive analysis of IKEA
National and international brands give head-on competition to IKEA. There are competent businesses like Keelback, fabfurnish.com, Tepehome, and lots of offline and online stores. On the other hand, IKEA has only an online store. The brand gains from a low infrastructure cost and a high online presence.
Target customers of IKEA look for value-for-money furnishing solutions. The age group of the
Intended audiences vary from 20 to 50. These are the customers who are inclined towards stylish and state-of-the-art furnishing solutions.
Products offered by IKEA
From the beginning, the company understood the needs of its customers and target audiences. The enterprise provides a variety of options so that the customer has a feeling of attachment and Rely on the quality of the products, thereby Propelling the popularity of the brand.
Offers a detailed list of the catalog where it includes the products served by IKEA. It offers a variety of products Bedroom Filaments, Cabinets, Domestic Furnishing, Home extensions, and more.
IKEA kept on changing itself with changes in the business environment. The designs are always out of the box, which gives it a competitive advantage to the brand.
Furthermore, the company doesn’t depend on a solitary or specific classification of products, but it goes on extending the variety and categories of products being served to the customer.
Some of the products offered by IKEA are as follows
- Dining furnishing
- Mirrors and glasses
- bathroom storage
- Decoration items
- sofa and armchair
- Textile and rugs
- Swedish food
- Tools and hardware
Pricing Strategy of Ikea
Due to their autonomous and monopolistic nature of IKEA and a couple of rivals in the industry, it follows a non-kind pricing policy. Like any other business would have done. In such a scenario, Ikea accepted an appropriate system. It is not about reducing costs to strip the brand of its regard, not to be overrated, to shock the business area qualities.
Ikea has been steady and ensured that the technique and strategy that it followed is perfect. Nonetheless, it is a state of appreciation for Ikea, that despite being a forefront enterprise, Ikea offers items at incredibly low costs, which is why retaining clients became easy for Ikea.
Place and positioning strategy of IKEA
IKEA offers rights to the franchisee in foreign markets where rights aren’t given till now. It is how the brand keeps up its exclusivity. While choosing franchisees, IKEA in addition to other things assesses the accompanying:
- Local market information and presence (whether it can set up and operate IKEA stores broadly)
- Corporate structure and culture
- Monetary strength and capacity to expand the business in a retail environment
IKEA runs a business in the following countries all over the world
- Czech Republic
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