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1.

INTRODUCTION
As the world economy is developing fast in the past 10 years, the furniture markets have opened up more and
the world furniture industry has been growing fast. Over 70% of the global market has been taken up by the traditional
furniture making countries. This is possible because of their long established production capacity, advancement in
science and technology, solid funds and rich management experiences. Meanwhile, developing countries and regions
like China, Southeast Asia, Poland and Mexico, with China taking the lead, have built upon their respective competitive
advantages and gradually have covered almost 30% of the world market. The furniture industry in such countries is
developing strongly and showing great potentials. The European Union furniture industry accounts for about half of the
world's furniture production. The production value of this industry in this region is around 82 billion. Considered to be
a labor-intensive industry it provides employment for around 1 million people. Among the European countries, Germany
takes the lead as the largest furniture producing country, accounting for about 27% of total EU production. This is
followed by Italy (21.6%), France (13.5%) and the UK (10.4%).The Canadian Furniture Industry is the 5th largest
exporter of furniture in the world. The major furniture producing countries in South East Asia are Philippines, Indonesia,
Malaysia, Singapore, Thailand, Korea, Taiwan and India. In the context of global furniture trade, Asia shows healthy
signs of growth with respect to its other international competitors. Asian furniture has always been popular in developed
countries like USA, Europe and Australia.
Over 20 years of fast growth, China has been able to bring unlimited business opportunities and vitality to the
global furniture industry. Now, China has today emerged as a furniture production center, a circulation center as well as
an exhibition center in the world. The rise of China's furniture industry has brought about a new round of restructuring
of the global furniture industry and trade pattern. According to a recent estimate, the Indian furniture industry is
estimated at around 350 billion. Eighty-five per cent of this falls into the unorganized sector. According to a study by the
World Bank, the organized furniture industry is expected to grow by 20 per cent a year and India, Brazil and Russia will
witness a boom.

2. IKEA BACKGROUND
IKEA was founded by Ingvar Kamprad (Kamprad) in 1943 in Agunnaryd, Sweden, when he was 17 years old.
Kamprad started by selling goods like pencils, wallets, jewelry, picture frames, and watches. Kamprad tried to keep
costs low by purchasing goods in large quantities and passed on a part of this benefit to his customers. In 1947,
Kamprad introduced furniture in his product line and found that there was a good demand for it. He sourced furniture
from manufacturers in local forests so that he could keep the costs low. As the scale of business grew, Kamprad found it
difficult to make individual sales calls and so started advertising in the newspapers. In 1951, he designed a product
catalogue and distributed it to potential customers who lived near his store.
IKEA opened its first furniture showroom in Almhult, Sweden, in 1953 where customers could see, touch, and
feel IKEAs furniture before they placed orders. As IKEA was selling furniture at very low costs compared to its
competitors, the competitors forced their suppliers to boycott supplying to IKEA. That led IKEA to design and engineer
its furniture and then outsource the manufacturing to Eastern European countries, particularly to Poland, from 1955.
IKEA designed its furniture to cost less, look stylish and also be functional. In the same year, one of IKEA s coworkers decided to remove the legs of a table so that he could fit it in his car and minimize any damage in transit. That
idea led IKEA to test flat packing in 1956. IKEA realized that flat packing could bring down the costs of transportation
and storage drastically. The company started designing its furniture to support flat packaging. In 1958, IKEA opened its
first store in Almhult. The store, spanning 6,700 square meters, was then the largest furniture retail store in Scandinavia.
IKEA saw an opportunity to cut costs by letting the customers transport and assemble the products themselves. The
company was thus able to sell furniture at around a 30% lower cost than other furniture retailers.
In 1963, IKEA opened a store in Oslo, Norway, its first store outside Sweden. In 1965, it opened a store in
Stockholm, Sweden. This was then the largest IKEA store and covered 33,000 square meters. The company introduced
the self-serve concept in the store. Customers were provided with information about the products on display through
written material and information desks. They were invited to check out the products and select them but there were no
sales staff. That enhanced the customers shopping experience at the store as there were no salespersons who were
constantly urging customers to make purchases. Customers were given tickets for the goods they purchased and were

asked to collect the goods at the delivery docks. There was no door delivery service available and the customers were
asked to provide for their own transportation. Car racks could be bought and self-driven vans could be rented. IKEA
expanded into more European countries and by 1974; it had 10 IKEA stores in five European countries. IKEA shifted its
headquarters from Almhult to Copenhagen, Denmark, as it felt Copenhagens central location made it a better choice to
support its European expansion plans
IKEA became highly successful in Germany where it opened its first store in 1974. The company realized the
huge growth potential it had in Germany and expanded aggressively. By 1980, it opened 10 more stores in Germany. In
1975, IKEA entered Australia by opening a store in Sydney. It continued to expand globally by opening stores in
Vancouver, Canada, in 1976, Singapore in 1978, Canary Islands in 1980, Iceland and France in 1981, Saudi Arabia in
1983, and Kuwait in 1984. In 1982, a family controlled charitable foundation named Stitchting INGKA Foundation
(SIF) was formed in the Netherlands and ownership of IKEA was transferred to that foundation. This was done to ensure
the continuation of business, maintain the family control on it, and minimize taxes as trusts and foundations had tax
benefits.
IKEA entered the US in 1985 by opening a store in Philadelphia, Pennsylvania. As the company followed the
same products assortment and specifications in all of its stores globally, it decided to follow the same in the US.
However, this did not work because of the difference in the lifestyles of American and Europeans. For instance, the size
of beds used in the US was larger than the size of beds used in Europe. IKEA realized that it had to modify its products
to suit the local needs and hence made certain modifications to products like beds and kitchenware. Though the products
were modified, the Scandinavian touch was maintained in the style and design. In 1986, Kamprad stepped down from
the post of CEO and made B.V. Anders Moberg (Moberg) the President and CEO of IKEA. Kamprad became the
advisor of SIF.
By the year 1990, IKEA had 89 stores in 21 countries. Along with global expansion through its stores, IKEA
also expanded the sources of supply to include countries like China. In its early days, IKEA sourced most of its products
from Eastern Europe but as it expanded its business, its dependence on Eastern Europe came down to a certain extent. In
the 1970s, around 25% of its supplies were from Eastern Europe. This came down to 15% by 1990. In the same way,
IKEAs revenue dependence on Scandinavian markets also came down from 85% in 1975 to 26% in 1990. In 1991,
IKEA started a furniture manufacturing subsidiary, Swedwood, to manufacture wooden furniture and components.
In the 1990s, IKEA further expanded into countries like Taiwan, Malaysia, Spain, and China. In 1997, IKEA launched
its website www.IKEA.com where it provided its customers with an online product catalogue. In the mid-1990s, IKEA
launched a separate line of products specially designed for children. In 1999, Anders Dahlving replaced Moberg. On
October 09, 1999, IKEA celebrated a Big Thank You event to recognize its co-workers. It distributed IKEA s global
sales of that day amounting to 84.85 million, among all its co-workers.

3. Product names
IKEA products are identified by single word names. Most of the names are Swedish in origin. Although there are some
notable exceptions. most product names are based on a special naming System developed by IKEA in conjunction with
Colin Edwards (international naming expert and Furniture enthusiast).

Upholstered furniture. Coffee tables. media storage. doorknobs: Swedish placenames (for example: Klippan)
Beds, wardrobes. hall furniture: Norwegian place names
Dining tables and chairs: Finnish place names
Bookcase rang. Occupation.
Bathroom articles: Scandinavian lakth rivers and bays
Kitchens: grammatical terms, sometimes also other names
Chairs. Des. Me. names
Materials. curtains: women's names
Garden furniture: Swedish islands
. Carpets: Danish place names
. Lighting: terms from music. Chemistry, meteorology, measures, weights, seasons, months, days. Boats.
. Bed linen. bed covers, pillows/cushions: flowers, plants, precious stones
. Children's items: mammals, birds. Adjectives

Kitchen utensils: foreign words. spices, herbs. fish, mushrooms. fruits or berries. functional descriptions
Boxes. wall decoration. pictures and frames, clocks: colloquial expressions, also Swedish place names
For example. DUKTIG (meaning: good. well-behaved) is a line of children, toys. OSLO is a name of a bed. BILLY (a
Swedish masculine name) is a popular shelf. DINERA (meaning: (to) dine) for tableware. KASSETT (meaning:
cassette) for media storage. One range of office furniture is named EFFEKTIV (meaning: efficient). SKARPT
(meaning: sharp or clever) is a line of kitchen knives.

4. IKEA Development Strategies:


4.1 Corporate level Strategy
Vertical Integration
Large companies are often involved in many different kinds of businesses and sell products in many different countries.
So far we have identified that IKEA has been using VERTICAL INTEGRATION to the Global furniture industry.
Managers use corporate level strategy in VERTICAL INTEGRATION to identify which industries their company should
compete in to maximize its long run profitability. There are two types of vertical integration:
1. Forward vertical integration
2. Backward vertical integration.
So far we found that IKEA using backward vertical integration to expand their business and to make profit. Here are
some benefits of IKEA to have vertical integration.
Facilitating investment in specialized assets
A specialized asset is one that is design to perform a specific task and whose value is significantly reduces in its next
best use. Here IKEAs specializes asset is employees skills that employees acquired through training and experience.
IKEA invested in specialized assets because it allowed it to lower its cost structure and differentiate their product.
Enhancing product quality
By entering industries at other stage of the value added chain, IKEA enhanced the quality of the product in its core
business and so strengthen its differentiation advantage.
Improved scheduling
Strategic advantage has been obtained when vertical integration makes it quicker, easier, and more cost effective to plan,
coordinating, and transfer of product like finished goods from manufacturing plant to retail or distributing shop.
Increased Bargaining Power
IKEA used VERTICAL Integration because it allows them to obtain bargaining power over suppliers and increased their
profitability. By consolidating the industry through VERTICAL Integration IKEA has become a much larger buyer of
suppliers product and use this as leverage to bargain down the price IKEA pays for its input, thereby lowering its cost
structure.

4.2 Business Level strategy


Low Cost
From the very beginning, IKEA maintain the price leadership strategy. The founder of IKEA Mr. Ingvar Kamprad
started the business whenever he was only 17 years old. It was established in Sweden in the year of 1943. Mr. Kamprad
always tries to give up a structure of elegance to the furniture. So it was realcly nice to the customer that, they found
their desired furniture in a very low price.
Whenever Kamprad started producing furniture at Sweden, it was very expensive there. So Kamprad come up with a
good strategy that, make a good design furniture with start adapted to machine production and also cheap to assemble.
As a part of giving low price product for the customers, Kamprad undercut the retailers and sold it to the own
warehouse.

Product development
As we know that, Mr. Kamprad always try to give up the stylish product and as a part of this stylish furniture provided
to the customer he hired a designer named Gillis Lundgren. Mainly he always helped Mr. Kamprad to make the
furniture better and also took the photos of the furniture to give them into the catalog. After hired the designer Gillis
Lundgren, he started to design more and more furniture, where many of them were the best seller in that moments.
According to Mr. Kamprad, he always said that, good furniture should be priced such a way that a flat wallet holder can
also buy the furniture. In this regard, Kamprad tried to come up with some cost efficient manufactured furniture.
Moreover the new designer always tried to explore some new ideas that, how to save the manufacturing cost with new
design.
Large warehouse store
This is one of the best parts of IKEA furniture that, they used large showroom for show their furniture to the customers.
Moreover in the home furniture fair of 1957 they exhibit their product to the customer. The productive part of being a
large warehouse was, customer can see that how it looks after arranging the total furniture setup. IKEA design their
warehouse such a way that, after crossing a maze it seems that its a finishing or logout of one area. The goal was too
simple, to make the customer feel that, after arranging the furniture it will be like this. Moreover IKEA provided flat
packed furniture which is very safe to carry and assemble also. Furthermore the idea of making a restaurant within the
warehouse was very effective. It was established in the middle of the warehouse. And last but not the least, IKEA sold
their furniture with reduce price of 30% 50% than the competitors.
Market development and expansion
After making a large amount of profit and as well as the market share in Sweden, Kamprad go for Poland. After go to
Poland, Kamprad discover that, the manufacturing cost of Poland was 50% lower than the manufacturing cost of
Sweden. So he started to develop his business to Poland. The people of Poland preferred Vodka as their business
celebration and Kamprad go on that way and make them happy with Vodka. Kamprad establish a very good relationship
with the suppliers over there. Moreover IKEA started their business in Poland, Norway, UK, USA, Switzerland etc. in
1965 they expand their business to Norway, in 1973 they expand into the Scandinavian area, in 1976 to 1982 they
expand their business to UK and Canada.
Market penetration
From the very beginning IKEA stated to get the majority market share with providing the low price furniture with
stylish furniture. As a part of that market penetration they expand their business to several countries. IKEA started
expansion their business in Poland, Norway, UK, USA, Switzerland etc. in 1965 they expand their business to Norway,
in 1973 they expand into the Scandinavian area, in 1976 to 1982 they expand their business to UK and Canada. And
lastly they started their business to USA to grab the USA market as well.
Business Model IKEA
Actually IKEA does not have any sort of business model. They just try to follow their previous strategy that makes them
profitable. Moreover they are not at all prepared to change their strategy. The target customers of IKEA was the young
generation and the middle class families who are looking for the low price furniture but attractive as households items.
After that, the large furnished warehouse attracted the customers very much that they buy product more than their
assumptions.

5. SWOT analysis of IKEA


5.1 Strengths
IKEAs low cost concept keeps it ahead of its competitors.
IKEA is the cost leader in the furniture industry. A living room furnished with IKEA products is as much as 65% less
expensive than one furnished with equivalent products from other stores. Its target market are the young married
couples, college students, 20 to 30-something singles and middle class families who are basically price sensitive
customers. So, if they can get furniture at a much lower price, of course the will opt for that. Thus, this concept gives
IKEA its biggest competitive advantage keeping it ahead of its competitors.

IKEA has successfully combined low cost with good quality.


Generally people have an idea that price and quality are directly related as in, higher the price better is the quality and
lower the price lower is the quality. However, IKEA has successfully changed this idea related to furniture. Not only is
its furniture much lower priced than its competitors, they also have great quality. It has productively combined low cost
with good quality. Its democratic designs which balances function, quality, design and price gives IKEA the
competitive edge.

IKEAs research and development team finds ways to alter designs to save on manufacturing costs.
Starting with the designer Gillis Lundgren, IKEAs research and development team always finds ways to alter designs to
save on manufacturing costs. The goal of the research and development team is to come up with stylish functional
designs with minimalist lines that can be cost efficiently manufactured. This keeps the cost down and allows for the
prices to be much lower than that of the competitors.
A key feature of IKEA furniture is self-assembly.
A key feature of IKEA furniture is self-assembly. This proves to be a very efficient concept for both the parties IKEA
as well as its customers. The furniture pieces are taken off and flat packed and then assembled by the customers at their
homes. It reduces IKEA transport and warehouse costs as well as saves additional hassles related to transporting a big
piece of furniture, and the customers are also willing to take on the task of assembly in return for lower prices. Due to
this, the furniture are always readily available which means the customers do not have to wait 2/3 days after purchase
for their furniture. This is a breath of fresh air for the customers.
IKEA has the ability to adapt its tactics according to the market.
Justification: IKEA has a very good strategy to adapt the way according to the market. If we see the scenario of
America, than we can realize that whenever Americans didnt their not accept the previous on and within a very short
time they come up with new target market as well as with reflection of customers needs and want.

5.2 Weaknesses
Its organizational culture can become a demotivating factor for many of its employees.
Justification: According to Mr. Kamprad, people work at IKEA this is because of they liked the atmosphere of IKEA.
They follow a very informal environment over there. But the most painful part is they did not have any hierarchy. So to
sustain properly and to do well in this sector they should have an organizational hierarchy. This is because, after have
the hierarchy it could be strength for them and also a motivational factor as well.
IKEA is not at all customer focused.
Justification: one of the bad parts of IKEA is, they are not at all customer focused. They always preferred the cost first.
The world is changing every day. Customer needs customize product or they might have some preferences which IKEA
should consider.
It lacks thorough market research on customers preference before entering into a new
market.
Justification: to provide a good quality product and also value the customers need and wants should be the
organizational motto; this is because its a furniture company. IKEA did not do any sort of market research regarding
customers needs and wants. So they should come up with a market research results which will give them more profit.
IKEA never took economic issues into consideration before being faced with the problem.
Justification: whenever any company wanted to go global, they should consider some critical issues like in American
market where the goods were priced in the Swedish kronor, which was strengthening against the American dollar. This
drove up the price of goods in IKEAs American market. So this sort of mistake should be done by IKEA.

IKEA has a tendency of making mistake first and then realizing that it should have taken
matters into consideration beforehand.
Justification: to be a successful furniture company, IKEA should take the customer preference first and then they should
start producing. Whatever, they did not do and research about the need of customers. After failed with any furniture they
started change the design and style and all those things.
Kamprad does not take into consideration the change of times.
Justification: in this world, everyone wants an entity or identity, a designation. The employees used to stick with the
company because they loved their work beyond anything else. However, times have changed and with that peoples
want out of their job has also changed. With regards to time changes, Kamprad should come up with a proper hierarchy.
IKEAs strategy is not exactly aligned with its vision.
Justification: Actually, in this case we see that, Kamprad just focused on low cost furniture producing. After that, he
tried to expand his business all over the world, but the problematic part was he did not have any long term goal that
where actually he wanted to see his business in future.

5.3 Opportunities
IKEA can expand its product line by producing high end products
Justification: usually IKEA manufacture their product for the middle class, upper middle class family. But if we consider
the present market situation then we can see that, people wants elegant design and they are ready to pay for that, so
IKEA can come up with a new target customer that is upper class and grab the market as well.
IKEA can expand its business into interior designing and cookeries products
Justification: as furniture is highly related with interior designing and also interior designing become very popular
nowadays, so IKEA can come up with a new idea and that is interior designing division to maximize their market share
as well as their profitability. Moreover cookeries also can be an ideal product for IKEA.
IKEA should listen to the customer demand to make more sustainable solution
Justification: The people are becoming very conscious about the environment nowadays. So to be a successful furniture
company they can come up with environmental friendly furniture with vast customization.
Product customization can boost up IKEAs sales
Justification: As we know, IKEA manufactured very stylish product but general, whereas if IKEA can come up with a
customize product for their customer then if could be a very profitable business for IKEA. People wants customize
furniture and there is no substitute product of furniture.

5.4 Threats
Changing social trend can hinder the growth of sales of IKEA
Justification: from the very beginning IKEA is emphasize on the low cost product but if we consider the customer trend
then we see that, a large number of people wants quality product. So there is high possibility to lost that market who
wants good product. So IKEA should come up with a good quality product strategy with their low cost strategy.
Accelerated market competition in USA
Justification: some of the well-established retailer sale furniture with low cost than IKEA, so it could be very difficult
for IKEA to continue their business with only low cost strategy. If we consider walmart, Office depot price then we can
see that, their price is 20% to 30 % lower than IKEA. So, IKEA should come up with another strategy besides low cost
strategy as early as possible.
The risk of global financial crisis
Justification: The worldwide recession is a major factor of bad economic condition. Since 2007, globally most of the
business organizations turnover is decreasing. So it might have some bad effect on IKEA.

6. MAIN ISSUE
Throughout the case, one thing was common, IKEA before entering into International Market did not do necessary
homework in order to conduct a better business due to which it always did mistakes first, learnt from its mistakes and
then made changes to change according to the new culture they were operating in.
The recommendations given below are solely based on the main issue identified:
We classify IKEAs recommendations into two main categories:
1. Internal Management Issues
2. External Market Issues

6.1 Internal Management Issues:


Change in Internal Management:
The management style of IKEA is quite informal. This type of management style may work in Scandinavian and
European countries. But this will not work in different part of the world. When a company is going global, it needs to
modify its business style a little bit according to the countries culture. IKEA, for example does not maintain any formal
hierarchy, it works completely based on teams (as a family), with no proper designations even for senior managements,
as well as no formal clothing, and is egalitarian. But for instance, if it operates in America it needs to change a little bit
because Americans are more formal and suited at work place, focus on hierarchy, and believe in pay for performance. So
these things are needed for IKEA to be considered when they are operating on a global scale.
*this pint leads us to our next recommendation which is IKEA should have
A Strong Human Resource Management Team:
As the point is about going international, and as it is about international business, it is not clearly mentioned in the case
whether IKEA is centralized or decentralized. But if IKEA opens new corporate offices in whichever new country they
want to run business then for its successful operations overseas it can have a good HRM team. This team will help IKEA
realize the key cultural differences among countries and help adapt management strategies which would best suit them.
For example: Equality in terms of race, gender, religion and others is fair. But when it comes for better performance it
needs to consider which employee is better than the other. Reward or pay employees according to performance. Have a
good ranking of employees within the company; allow them to have cars or other benefits so that employees stay in the
company for longer terms.
Unlike IKEA which does not have any proper internal management. Which means a strong HRM team will not only
help IKEA improve its internal management structure and culture, but it will also help IKEA identify the best HR
practices to be followed in international market like polycentric approach, geocentric approach, ethnocentric approach
or whether to adapt regiocentric approach.
Change in Leadership Style:
Due to Kamprad, IKEA is suffering from Icarus Paradox issues. So we suggest there should be a leader or a
SUCCESOR for IKEA who could help in bringing change for the corporation according to the fast and ever changing
ways of conducting business in the 21st century. A leader who has a good vision, who can help align corporate level
strategies with ever changing global business, one who is flexible and can one who considers employees and top
management views while making better decisions for the company unlike Kamprad whose fragility was a part of
IKEAs DNA, and a man of his own word and principles who was quite autocratic and did thing what he thought was
best for the company. That is IKEA needed a more decentralized form of management to be a better global competitor.
6.2 External Market Issues:
Focus more on customer wants and preferences:
Unlike any successful company, IKEA needs to focus on customer wants rather than simply focusing on lowering costs
by setting up price tags and designing furnitures. When IKEA started operating its business in United States of
America, it faced problems as it was not aware if what Americans wanted or preferred. They first followed what they
used to do in Scandinavian market due to which its sales went down initially. But later when it came up with customized
advertisements for younger demographics like married couples, college students and 20 to 30 something singles, due to
which later within four years IKEAs revenue doubled from $600 million in 1997 to $1.27 billion in 2001. This was the
result of its focus on what young American customers wanted.

Stronger Research and Development Department:

IKEA spends too much time and money on finding the right suppliers who can get aligned with their lower cost strategy.
Instead they may put this same amount of time and money doing research and development before going for any
international business. Like if they before entering American market, had already researched on things like American
bed in king, queen and double size unlike Europeans who measure beds in centimeters. They prefer larger sofas, deeper
wardrobe drawers, long curtains, large glasses and others. If IKEA focused on customer research and development on
the first place then they would have made profit since they have entered American market.
Product Innovation
IKEA is having a product strategy but in order to have a competitive advantage in the market IKEA could become a
more customer focused company in certain countries. This could help them come with more customer focused and more
innovative products which might result in a higher competitive advantage in many different new markets they wish to
operate in future, or are currently operating in.
IKEA could go for Related Businesses:
As mentioned earlier in opportunities, IKEA could go for related new business like interior designing solution options
for its customers or even offer new cookeries products to them, or they could also go for a complete product solution
services for their customers. For example: if a customer is willing to buy furniture from them, then they could offer
customer an additional service like give them a solution that is how they can redecorate or change their home interior
according to the choice of their furniture they are purchasing. They could provide such service options online on their
websites as well. These extra services or customer solutions might not bear extra costs for businesses like IKEA which
has generated good amount of profit over the years.
Outdoor Advertisement:
Since IKEA is been going for a low cost strategy they can change/extend their marketing strategy. We all know giving
ad on TV is very expensive and this price heavily fluctuate on the length of ad and timing. If IKEA want people to listen
to their ad they have to show their ad products before/after/between news or any popular TV show, which will cost
money at hemorrhaging rate. They can draw paint/graffiti on public transportations or cab or subways. Because most of
IKEA's target customers are average middle class families and these people use public transportation like bus/subway;
so this marketing strategy will capture attention of maximum target audience at a much cheaper way.
Niche Strategy in USA
After expansion in USA, they observed that, thing are not going well. The furniture they designed according to the
preference of European style was not going to work with the American preference. After analyzing the total situation,
Kamprad started redesign their furniture. In this time they emphasis on the young generation as their target customers.
IKEA reemphasized designed and started promoting the brand with a series of nice advertisements with targeted to the
young married couples, college students and 20 - 30 ages singles.

7. Future potential Markets:


Based on the issues that been mentioned earlier IKEA have found out some solutions and applied in different aspects,
their marketing strategy stated below
IN EUROPE: IKEA is planning to open 10 new stores in Europe. Russia is a potential market for IKEA because
the economy of Russia is expanding. Germany is a largest market of IKEA.
IN NORTH AMERICAS: America market can be tough for IKEA as there. Are big competitors like
FORTUNEBRANDS, JARDEN, MASCO exists? IKEA planning to open 5 new stores in USA.
IN ASIA: Asia is a large potential market for IKEA. IKEA is planning to enter in INDIA. In 2011 IKEA is
opened its store in MALAYSIA. CHINA, JAPAN and SINGAPORE are profitable market to expand.
IN AUSTRALIA: AUSTRALIA is a big market for IKEA, there is always demand for ready to assemble furniture.
IKEA planning to increase employees in there stores IKEA is currently operating in all the states of AUSTRALIA
and planning to open more of stores.

8. Conclusion:

There are so many reasons that make IKEA so popular, for example, cooperating with the suppliers
from all over the world, high-efficiently of logics, using 'life system" to find what customer need, and
so on. Follow the concept, IKEA try their best to give the customers what they promised: low price,
well-design, creating a better everyday life for many people.
As a world famous international company, IKEA is like a fresh air in to new target markets such as:
Middle East Australia and China market. It not only brings new strategy and model to their
competitors, but also brings the new life style and service to the customers.
For the dilemma of IKEA in China market right now, IKEA should try to change the supply base to
"supply- product- sale" base. Though the centralized procurement, flat-package, and more cooperation
with local suppliers, IKEA can get more cost leadership. So IKEA can reduce the price and get the
virtuous circle of "reduce price-increase demand-scale effect- reduce price".
IKEA already understand Middle East Australia and China markets more than before. With
accelerating the speeds of expand, IKEA will get more customers; the success of IKEA in these
markets is only the problem of time.
References: IKEA. (2010). Retrieved 21/12/2011, from: http://www.ikea.com/ms/en GB/about
ikea/press room/student inf o.html The official board. (2011). Retrieved 22/12/2011, from:
http://www.theofficialboard.com/or -chaiL git ikea IKEA. (2010). Retrieved 22/12/2011, from:
http:L/www.ikea.com/ms/n1 BE/pdf/ly summary/Welcome insi de_2010_update.pdf