IKEA'S GLOBAL STRATEGY: FURNISHING THE WORLD

1. IKEA'S GLOBAL STRATEGY: FURNISHING THE WORLD 第一组组员：蔡金雄 陈伟良 谢小彬 尹振国

2. 1） What are IKEA's firm‑specific advantages? Country‑specific advantages? IKEA's firm‑specific advantages are as follows: 1. Product Design In China, IKEA has already gone beyond the corporeal concept of household goods, and become a fashion, life taste of live specimens. Many consumers like the decoration in their own homes before to take a look at the IKEA shopping, in the light of IKEA's design Style of dress to their small nest. IKEA’s products are, in fact, smooth, simple and practical follow-oriented features, the rational pursuit of the typical Nordic style, Ikea's design department well to combine art and the market, developed in line with the style of IKEA customers and meet the requirements of the product. 尹振国

3. 2. Economic procurement strategy In addition to the Chinese mainland IKEA prices somewhat on the high side, the other in the global market, IKEA has been low-cost high-quality image, that benefit from its economic procurement strategy. IKEA in the choice of suppliers for the product, as a whole to consider the lowest overall cost. 尹振国

4. 3. Packaging Although the furniture in the assembly is nothing new, but Ikea is the first to put flat-packed into a mode of operation. It was one sudden inspiration of Ikea staff, he amputated legs of the table, so that not only can be loaded on the table Vehicles, but also reduces the possibility of damage, but also saves the cost of transport. In this way, IKEA has made a problem into a opportunity to create a flat-packed first. Today, flat packaging has become a large number of household goods manufacturer of generic model, designed to be removable furniture parts, flat-packed in the material, so greatly reduce the volume of furniture.It saves a lot of unnecessary transportation costs. 尹振国

5. 4. Marketing Various markets around the world, IKEA's marketing strategy is consistent, which is relying on the market to buy display, catalog marketing as well as flat packs to win the trust of consumers. 尹振国

6. 2）What are the cultural factors which make expansion abroad in retailing difficult? What has made it possible in IKEA's case? The retailers that are operating internationally have to face with great challenges,because countries differ from one another in many respects, such as their economic base, history, environment and neighbours.Cultural Barrier is one of great challenges.The cultural factors which make expansion abroad in retailing difficult are as follows: 陈伟良

7. 1)Material culture Material cultule determines the way of people’s life. There is a big difference between developing countris and developed countris in this respect. 2)Language Language barrier makes retailers difficult or even impossible to communite with customers in target market . 3)Religion Religion is an extremely serious issue. Violation of thereligion rules will have very serious consequences, which is a retailer must know before it entry a target market. 4)Custom and manner It is hard to change people’s customs and manners.Retalers have to learn and adapt to them. 陈伟良

8. IKEA has made it possible : There is an old saying in china :“Know the enemy and know yourself, and you can fight a hundred battles with no danger of defeat”。 IKEA’s localization strategy make it successful in many countries. When IKEA enters a country, there will be smaller shops setting up in order to adapt to the local environment.Some positive actions will be taken, like learning the local customs and manners, respecting customer’s faith, and employing some local staff to overcome the language problem. 陈伟良

9. 3)Describe how IKEA'S expansion has re-energized mature markets around the world and changed the competitive situation. 一、IKEA's product strategy 二、Low-price strategy 三、Unique style of the channel strategy 四、Promotion strategy 谢小彬

10. 一、IKEA's product strategy 1、Accurate market positioning IKEA's business philosophy is to "provide a wide range of aesthetic and practical, ordinary people could afford to buy domestic goods." 2、Products in style, and favorable sales IKEA’s products were sold by IKEA's independent design, product unique style. IKEA products stressed that "simple, natural, fresh, well-designed" unique style 谢小彬

11. 3、A beautifully designed and durable products IKEA has always stressed the exquisite product design, practical and durable. Of course, simply-designed, it is not difficult, but on the basis of low prices, being beautiful, practical, high-quality at the same time is much more difficult. 4、Extensive product line IKEA’s products range widely, for a total of more than 10,000 kinds of products that customers could choose. Basically, any taste of the customers can buy furnitureswhich he/she needs for homein IKEA. 谢小彬

12. 二、Low-price strategy 1、Low prices on the idea of product design IKEA's R & D system is very unique, low-cost and can become an efficient one. 2、IKEA’s innovation to reduce costs IKEA use new materials and new technology to improve performance and reduce prices continuously. 3、IKEA and customers co-operate to build a low price. 4、IKEA's global production management and logistics system 5、Flat packaging strategy to reduce costs 谢小彬

13. 三、Unique style of the channel strategy 1、Self-control shopping channel 2、Succeeded in IKEA stores have become a symbol of life 谢小彬

14. 四、 Promotion strategy Directory display -IKEA marketing strategy- is an important part of the IKEA product sales. In 1951, the first catalog of the IKEA issued. Since then, every year in September, IKEA gave its consumers free charging for exquisitely directory at the beginning of its new financial year. 谢小彬

15. 4）How does the TV advertising campaign initiated by IKEA overcome the entry barrier of high advertising expenditures？ • In order to answer this question, we should find out the target market of IKEA----People who are young, highly educated, liberal in their cultural values, white-collar workers, and not especially concerned with status symbols. That means all the people are not able to understand these new and accept them . So, TV advertising may not be a best way for IKEA to choose in commercial-making, for they are faced to all the people in different ages ,and cost a lot as well. Instead of making TV commercials ,IKEA created several new way in promotion. 蔡金雄

16. 1. IKEA’ s promotion is centered on the catalog of new types. These catalogues are carefully designed and beautifully printed, and are sent to the customers for free. The IKEA catalog is printed in 13 languages and has a worldwide circulation of well over 50 million copies. With these catalogues , information of new furniture products , new convictions of IKEA ,and even solutions of furnishing life can be given to the customers. This will enable the customers to learn concepts of furniture-making and gain inspiration and inventions by scanning these fascinating catalogues. A way like this of publicizing products can be more efficient and superior to any other forms . 蔡金雄

17. 2. Beside that, in 2002, a series of 8 minutes TV plays , showing the customers how to solve problems in decorating furniture and providing them with a comfortable environment to know more about IKEA ‘s products and services. The TV plays were played once a week in Shanghai and Beijing from Sept.13 and had a great effect on promoting . 蔡金雄

18. 3. Recently ,in Sweden ,IKEA and Forsman & Bodenfors are back with a crazy＂in the wardrobe＂experience. A great branding campaign where music plays a key role to entertain and drive further exploration of the site. The characters in each room are weird enough to get your attention and make you wonder "what the hell is going on here?". From the superheroes to the mustached twins, Ikea seems to be able to content (and contain) everybody That is the secrete of IKEA’ s avoiding from substantial advertising expenditures. 蔡金雄

19. 5）Should IKEA expand further in the United States or focus on other countries? As the biggest Home Furnishings Retailer which has a large number of chain stores all over the world, IKEA should take the market of the United States and that of other countries as equal. 1. As we know, the IKEA Concept is based on creating well-designed and functional home products for people at prices so low that as many people as possible will be able to afford. 所有组员

20. Though , generally speaking, most of the Americans are now living in a higher life label than the world’s average standard , there are still people who are not able to afford quality furniture. So the promotion in America market should keep running ,moreover, more competitive and efficient promotion strategies are required. 2. In other countries , IKEA furniture is easier to be strongly competitive, for there is more possibly to be less risk and competitors who are handling quality house furnishings, and , more people who can only afford house furniture at a relevant lower price. This is a good opportunity which IKEA has been long for. 所有组员

21. conclusion IKEA is a global company ,its target market should not be limited in a area. 所有组员

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