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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.

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IKEA’s Global Strategy: Furnishing the World

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  1. IKEA’s Global Strategy: Furnishing the World Kate England Brenna O’Regan John Hudson

  2. 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

  3. 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

  4. 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

  5. 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)

  6. Product Lines • IKEA offers 21 different product lines: -Bathroom, Beds, & Mattresses -Clothes Storage -Bookcases & Storage -Decoration -Chairs & Tables -For the Pets -Children’s IKEA -Lighting -Textiles -Kitchen -Cookware -Work Area -Sofas & Armchairs -TV & Media Solutions -Floors -Furniture Care -Tableware -etc.

  7. Current Issues • IKEA attempts to target the small-business 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

  8. 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

  9. 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

  10. 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-states- california/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

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