IKEA’s Global Strategy: Furnishing the World Kate England Brenna O’Regan John Hudson
Background • Founded in 1943, in Sweden, by a man named Ingvar Kamprad • Initially offered items such as pens, wallets, picture frames, jewelry, etc. • In 1947, furniture was added to their product selection, followed by personally designed pieces in 1955
General Information • Defined as a “lifestyle” furniture store • Known for selling disassembled furniture • Operates 253 stores, in 35 countries (with the majority being in Europe, the U. S. , Asia, Canada, & Australia) • 70% of IKEA’s annual marketing budget is consumed by their catalogue
Global Expansion • IKEA plans to enter: -numerous other U. S. states -Cyprus in the summer of 2007 -Northern Ireland in November 2007 -Ukraine in early 2008 -Republic of Ireland & New Zealand, tentatively
Current Locations • Europe: Belgium (6), Czech Republic(4), Denmark(4), Germany(41), Spain(11), Greece(3), France(20), Iceland(1), Italy(14), Hungary(2), The Netherlands(12), Norway(5), Austria(6), Russia(8), Poland(7), Portugal(1), Romania(1), Switzerland(7), Slovakia(1), Finland(3), Sweden(16), Turkey(2), United Kingdom(15) • North America: Canada(11), United States(29): Arizona(1), California(8), Connecticut(1), Illinois(2), Georgia(1), Massachusetts(1), Maryland(2), Michigan(1), Minnesota(1), New Jersey(2), New York(1), Pennsylvania(3), Texas(3), Virginia(1), Washington(1) • Middle East: Kuwait(1), Israel(1), Saudi Arabia(2), United Arab Emirates(1) • Asia-Pacific: Australia(5), China(4), Hong Kong(1), Japan(2), Malaysia(1), Taiwan(1), Singapore(2)
Product Lines • IKEA offers 21 different product lines: -Bathroom, Beds, & Mattresses -Bookcases & Storage -Chairs & Tables -Children’s IKEA -Textiles -Cookware -Sofas & Armchairs -Floors -Tableware -Clothes Storage -Decoration -For the Pets -Lighting -Kitchen -Work Area -TV & Media Solutions -Furniture Care -etc.
Current Issues • IKEA attempts to target the smallbusiness market • Tax avoidance criticisms • The Berne Declaration’s nomination of IKEA for one of its Public Eye “awards” • VISA mobile checkout devices that reduce long waiting lines at checkout counters
Suggestions • Maintain superior quality & image • Research countries thoroughly before entry • Expand the number of products offered in catalogues • Offer extra incentives to customers who shop from the catalogues
Lessons • Fully research the country’s promotional techniques before entering the market • Make sure all products are customized to the country in which they are sold
Sources • Anderson, Kay. (August 21, 2006). “Furniture stores see market share slipping. ” Furniture Today. Retrieved April 4, 2007 from • “Executive Perspective. The Merchant Landscape: Interview with Lory Yeakle” (2006). http: //www. furnituretoday. com/article/CA 6365162. html • “Facts and Figures” (2007). Inter IKEA Systems B. V. Retrieved April 3, 2006 from http: //franchisor. ikea. com/show. Content. asp? swf. Id=facts 3 • Garcia, Shelley. (January 22, 2007). “IKEA targets growth of small-business market: retailer offering planning tools. ” San Fernando Valley Business Journal. Retrieved April 4, 2007 from http: //www. allbusiness. com/north-america/united-statescalifornia/3967121 -1. html • “How Many Countries in the World? ” (n. d. ) World. Atlas. Com. Retrieved April 4, 2006 from http: //www. worldatlas. com/nations. htm • “IKEA” (n. d. ). Wikipidia Encyclopedia. Retrieved April 4, 2006 from http: //en. wikipedia. org/wiki/IKEA • “IKEA AB Sweden. ” (2005). Mergent Online. Retrieved April 5, 2007 from http: //www. mergentonline. com/ • Johansson, J. K. (2006). “Case 1 -1 IKEA’s Global Strategy: Furnishing the World” Global Marketing: foreign entry, local marketing and global management. 4 th ed. Mc. Graw-Hill/Irwin. p. 85 -89. • “The IKEA Catalogue” (2007). Retrieved April 4, 2006 from http: //franchisor. ikea. com/show. Content. asp? swf. Id=catalogue 2 • The Visa Quarterly. Retrieved April 7, 2007 from http: //corporate. visa. com/av/nl/feature_interview. html “Welcome to IKEA. com: Official Website” (2006). Inter IKEA Systems B. V. Retrieved April 4, 2007 from www. ikea. com
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