Ikea Case Study

IKEA Case Study

Student’s name

Institution Affiliation

Name of the course

Tutor

Date of submission

Executive Summary

The following paper is an analysis of the IKEA Company’s case study that exists in textbooks of strategic management. The study report starts by providing AKEAs background. Study of international business level strategy and corporate level strategies are conducted. The case study tries to inform its strategy in pricing and target market that is discussed already. The study, also explains how individuals of different in internationally perceive IKEA, how are excellent is their designs and how is cheap for them to buy the company’s goods.

Some of the primary markets of IKEA corporation are found in three of the most rapidly developing and growing markets such US, China and Russia,.  Products such as furniture’s as well as small product like scented candle are found in IKEAs store. IKEA Company has more than one thousand and three hundred suppliers in roughly fifty-three states.  The company also have twelve designer who works full-time and eight freelancers as well other workers involved in the production to highlight the right raw materials and produce goods efficiently at the least cost possible. The report also tries to analyze the methods of entry used by IKEA Company as well as its sustainability.

Introduction

As a result of current increase in completion and high growth rate of globalization it is very vital for the companies to be aware of the occurring changes so that they can come up with new strategic plan that can significantly assist them always to retain their potential of being ahead of those who compete with them thus making sure that they get the highest market share. The IKEA Company has a vision which is to better the life of many people every day. Growth by use of its resources is the primary financial principle of the company. According to the company, money is earned before it is spent thus making it easier for individuals to make investments in a long-term for future benefits. The company’s vision is the start of its growth and development. The stakeholders of the enterprise aim at making it possible for people to have access to it for a better day to day life at home. IKEA invests most of its profits in the new and also the existing stores, as well as sustainable solutions, development of products and also by practicing constant lowering of prices to its clients.

Likewise, this particular paper is trying to discuss in detail the IKEA enterprise case considering the sources for its successful entry; its internationalization, obstacles, importance and successes; the process of management and effectiveness; the role of Ingvar Kamprad and future barriers and recommendations.

Sources of IKEA’s Successful Entry

Chiefly due to post- wartime requirement and baby boomers in Sweden the furniture retailing undergone various circumstances because they forced continuous formalization of their needs by IKEA to prosper with the focus that was outlined (Christensen, 2006). Due to this, it was taken into account to develop a leverage to achieve a positive goal from all the offsets of anything that was perceived to bring obstacles in coming up with new ideas during the period of post-war in Sweden that occurs in the following: In addition, IKEA Company successfully went through the first phase of the lifecycle and joined the business of furniture retailing due to various reasons which are illustrated below. To start with, the firm managed to have a better understanding of the market areas of the young clients and low-medium economic level, whose needs were not seriously experienced within the segment of furniture.

To begin with, the IKEA Company was able to notice the market fields of the low-medium levels of economy and young clients, whose needs were not experienced within the segment of furniture. Selling of highly designed furniture of high quality at cheaper prices made IKEA Company to be different from other furniture companies (Bartlet & Nanda, 1996). The second reason that made IKEA group join furniture business is that it made outlines and at the same time applied cost and quality control policies that made it easier for it to produce and sell the best products at the low price in order cater the low-income earner who was able and willing to pay at low cost. The third reason comes in when the business enterprise come up with marketing strategies that were more aggressive that aimed much at interacting with the clients. The company comes up with new ways of accessing its customers despite stiff completion from other furniture companies that perceived it as being a threat. The newly adopted strategies by IKEA made it possible for it to market its product to the customer thus making it be more competitive and have a significant market share thus maximizing profit. Due to this ability of IKEA adopting new strategies, the other competitors in the market tried to prevent it from issuing its products to the customers. This action didn’t challenge the company at any point. Finally, the IKEA Company attempted to apply new approaches in marketing, service, and management and by so doing, it successfully articulated its value-offering characteristics which clients accepted.