Question:
Discuss About The Global Platform Affected Many Businesses?
Every kind of industry makes an effort to use an efficient and effective strategy for the business that will permit them to stay at a position which is progressive by nature. This strategy holds true especially in the international market. In connection to this, the objective of the report is based on presenting a position analysis for the furniture giant like IKEA (Larsson, 2016). The report will discuss in detail about different aspect of IKEA and how the company is functioning in the present time.
The company IKEA was founded in 1943. The company started with the idea of selling furniture based products and when it started getting recognition, the company opened its first store in 1958. In the present time, the company owned more than three hundred stores in more than forty countries.[1] The complete sales revenue is estimated to be more than twenty one billion euro with the assistance of more than one lakhs coworkers. The economic downturn on global platform has affected many businesses. IKEA also suffered the brunt of the global downturn and the outcome was the losses of jobs at the organization (Ngai & Falkheimer, 2017).
The vision of the company is always aimed at inspiring the consumers and encourages the workforce to accomplish goals. The mission statement of the company is based on communicating the objectives of the company clearly with consumers including all stakeholders. The company has worked hard to present a wide range of product for customers and the company only wants the company to have a good time. The overall brand image of the company is the workforce with the help of hard work and sustaining the brand image for over fifty years worldwide. [2]The products they manufacture and tagged the price with huge range of collection based on home furniture and the data provided to the customers (Prange, 2016).
The main idea of the company to meet the demand and needs of the consumers with huge range of home furnishing products and for that the consumer must not have any kind of second opinion while buying it from some other firm. The customer visits the IKEA store with an expectation of wide range of products. They also expect good and effective services. The initial stage is when raw material is bought in the company along with all the procedure until the final stage (McNamara et al, 2016).
The company main target of the company is middle class consumer all across the world. The company has taken extra effort in a stress free shopping experience for the consumers. The complete stores are actually assembled in the form of one circle that allows consumers to have an outlook about every unit of the store. [3]The board market of the company was based on middle class who has a mutual kind procurement attitude (Grant, 2016). With the help of all kind of correspondences, the company has identified to gain strength over the presence of the market all across the world.
The company has over one thousand suppliers in over fifty five nations and most of supplier’s functions in the group of IKEA and directly competes with number of different suppliers and which give them a position to be in a modest level of bargaining power. Low pricing strategy of the company has affected the profit margin of the company in raw material and then there is labor cost as well. To maintain healthy association with the suppliers, IKEA has maintained a cordial association with the suppliers (Grant, 2016). The company always ensures that they discuss the prices with the suppliers and the overall quality of the raw material that they are using in the finished products.[4] They also keep a close eye on the supplier and must not incur any kind of loss in raw material.
The competitions for the company are of varied styles and functionality. Like for example, Conrin target a new kind of low cost model in furniture market. [5]Then there is Cratel & Barrel which provide furniture in a box that is mostly subjected in high level of prices. Company like Ethan Allen aims at having an upscale market and there is Wal-Mart which is well equipped in selling a big box furniture market which can be divided under many models like general stores (Grant, 2016). However, IKEA is still considered as one of the most successful company in providing a whole and finished package to the customer.
The company has used quantitative as well as demographic data like many other nations. Qualitative along with psychographic data permits the company to gain clarity on consumers in greater depth and it further designs a customer experience which is superior for the competitors of IKEA.
Qualitative data normally impacts the design of the showroom and the showrooms of the company have completely furnished walk in rooms or apartment, with wide room dimensions written all over the walls. The setup has been integral part of showroom design of the company; qualitative data permits the company to make sure those rooms as well as apartment’s shows the way customer can actually live[7]
The complete setup can be defined above permit the consumer to experience the way furniture and accessories would be perceived as and also allows them to take effective decisions while buying furniture. The company is creating a qualitative data based on in store experience that removes many kinds of inconveniences for the furniture shopping. For example, the qualitative data of IKEA has presented that when a consumer make a single change in the room, other kind of modification automatically follows. Qualitative data also present that consumers can feel hungry after hours of shopping which will want them to leave the store. In order to remove this hindrance, the company has started offering a high quality along with low price restaurants inside the showroom only. In the end, qualitative data also represent that the consumer often shop with the family and this can usually complicate the experience of buying furniture. The company unlike other furniture stores provides supervised children play area.[8]
IKEA has always aimed on product ad price components of the marketing mix. Especially, the company has taken a lot of efforts to provide great variety of ranges in products at low cost. In addition to this, the range of product with effective price along with additional components of marketing mix includes proper place, promotion, people, process and physical evidence. With the use of mono segment kind of positioning for range of products, is based on targeting all the price sensitive consumers who mostly prefer to get some kind of value for the money. [9]The company has also adapted the low cost for the products along with huge range since it offers a unique selling point for the brand.
Particularly the furniture leader many derive the maximum amount of advantages from media and print based advertising with direct marketing.
Conclusion
Analysis of IKEA demonstrates how the company was able to make a strong position even after the big economic downturn. Different analysis discussed in the report shows how IKEA shown all kind of external factors to accomplish the success in the market. The company also has to address all the external factors which are diverse and different worldwide. The company also provides the consumers with huge range of product at low prices which make them different and unique among the competition. [15] The company has also adopted a distinct marketing mix that resulted in huge development for the organization. In order to gain success worldwide, IKEA has to modify the marketing strategy in different places of the world and also have to adopt new strategies to gain success.
References
Grant, R. M. (2016). Contemporary Strategy Analysis Text Only. John Wiley & Sons.
Jin-Yuan, Y. U. A. N., Miao, W. A. N. G., & Xiao-Ming, Y. U. A. N. (2016). Analysis for Cost Leadership Strategy and Core Competitiveness Points of IKEA CO. DEStech Transactions on Economics, Business and Management, (iceme-ebm).
Larsson, J., & Gadde, J. (2016). Modularity and its Effects on Operations and Logistics-A Case Study at IKEA Industry.
Larsson, R. G. (2016). Ikea’s Almost Fabless Global Supply Chain—A Rightsourcing Strategy for Profit, Planet, and People. In Lean Management of Global Supply Chain (pp. 65-82).
Lu, C. (2014). IKEA, S inventory management strategy: how does IKEA do it. Retrieved from.
Mariani, G. (2016). Influence of consumer behaviour on the circular economy application. The case study of a revival strategy for home textiles at IKEA. IIIEE Masters Theses.
McNamara, T., McNamara, T., Descubes, I., & Descubes, I. (2016). Can IKEA adapt its service experience to India?. Emerald Emerging Markets Case Studies, 6(1), 1-14.
Mendibil, K., Rudberg, M., Baines, T., & Errasti, A. (2013). Operations Strategy and Deployment. Global Production Networks: Operations Design and Management, 61.
Ngai, S. B. C., & Falkheimer, J. (2017). How IKEA turned a crisis into an opportunity. Public Relations Review, 43(1), 246-248.
Prange, C. (Ed.). (2016). Market Entry in China: Case Studies on Strategy, Marketing, and Branding. Springer.
unity. Public Relations Review, 43(1), 246-248.
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