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IKEA is one of the largest store that produces varieties of furnishing items. Ikea produces very ecofriendly products that which are reusable and recyclable. Ikea has different branches around the world. It produces around 9500 varieties of furnishing products. Present ikea is one of the leading furnishing store. Customers choose, transport and assemble the furniture themselves, in a way the customers of other furniture and home furnishings retailers, although others are now imitating the IKEA model. Ikea has been focussed on cost leadership strategy.
The given case study mainly focussed on the following points:
The market is mainly focussed on young people of all ages and also the people who are literally educated people. Because the young people are starting their careers and building up their homes for children. Canada is typical in its customer profile and can be used to represent the global customer. In Canada the target customer household has an income of $35,000 – 40,000 (middle level), owns a apartment or a townhouse has both husband and wife has jobs are in the primary age group 35–44, or the secondary group 25–34, has two children, and they change houses frequently so to that type of people the ikea products are very usable because the products shifting is very easy.
The product is homogenous and country to country the production is different. Ikea design process is very light and modern. According to the people the designing of products varies. Ikea designs but not manfactures. At present ikea consists of more than 1800 suppliers and in terms of 55 countries. Ikea is an example of strategic center enterprise that menas which the company works at the center alliance of network. Becoming an ikea supplier is not an easy job but once if it done then the supplier can access to the global markets. Ikea consists of varieties of products such as sofas,spons,plants,pots etc. Ikea play a prominent role in assisting the suppliers.
Ikea has a lot of competitive strategies and coming to the price strartigies if ikea price is 30-50% and atleast 20-30% but those are fully assembled. Ikea does everything to keep price down. For example if the price of a chair changes from one year to another year where this follows a competitive strategy. It has been able to be unique for itself for carrying out the following activities.
By doing these type of activities many of the customers are attracted to ikea products.
Ikea has own global distribution and retailing network with 18 distribution centers in 2003. The 70% distribution can be carried out through container ports, major trucks, railways. And the remaining 30% going direct from supplier to store. Its stores are usually located well outside city centres but with plenty of free parking space. Ikea has own largest outlets, but is prepared to in franchise markets which is smaller to carry a bigger risk because of initial unfamiliarity with or hostility to ikea concept. The normal rules and expectations of a furniture store do not apply to ikea. The normal rules and expectations of a furniture store do not apply to ikea. In some regions where the cost is not prohibitive, ikea has used mail order system.
The main promotion of ikea is well designed catalogue it is a well designed,almost collectors item. Catalogue has become a design icon, rather than like London undergroundmap, coco-cola bottle. The catalogue is the best promotion concept for ikea while the consumer entering into the store the catalogue gives the clear understanding about the products. In 2002 the ikea designed catalogue in 34 different languanges. More than publicity ikea gives more concentration to the catalogue only. Ikea produces around 400000 copies of catalogues in 2002. Some of the catalogues are sent to cardholder homes.
Second promotion method that ikea uses the colourful and attractive outlets. While a consumer entering into an ikea store it is used to look like a home. In ikea store they provide customers tape, pencil, and notepad to assist them in making a choice. Combination of low price and high quality normally attracts the customer. Innovation and renovation of things in ikea recently the distribution of model kit for designing own kitchen.
Ikea faced lot of problems when they entered into the American markets. Before entering into the American market ikea entered into Canadian markets. By entering into Canadian markets the ikea started learning process about the business strategies. When ikea is started the small markets are the competitors to ikea. . And ikea started store in the year 1976 within 10 years ikea started nine stores. When entered into American markets they got so many losses for 3 years at finally they sustained and the expansion of the stores is done.
Ikea is the best furnishing store that which every category of people can afford for buying the products. If ikea increases the production and stores more than it should be in the race of 1 companies list. The operations in the store should be carried out in strategically way then company get more profits and sales
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