Transcript IKEA’s Global Strategy: Furnishing the World

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/CA6365162.html
•
“Facts and Figures” (2007). Inter IKEA Systems B.V. Retrieved April 3, 2006 from
http://franchisor.ikea.com/showContent.asp?swfId=facts3
•
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.) WorldAtlas.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. 4th ed.
McGraw-Hill/Irwin. p. 85-89.
•
“The IKEA Catalogue” (2007). Retrieved April 4, 2006 from
http://franchisor.ikea.com/showContent.asp?swfId=catalogue2
•
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