IKEA’s Business
IKEA is an international home product
company that designs and sells ready
to assemble furniture appliances and
home accessories

IKEA’s Company History*










IKEA’s Founded
Furniture Introduction
Furniture Catalogue
IKEA designs its own
IKEA introduces Flat

IKEA’s Timeline


Source: www.ikea.com

IKEA stores open at
• Almhult
• Stockholm

SWOT, PEST and the Marketing Mix


Office Depot. Staples. • Unorganized sectors like local manufacturers and carpentry stores • Competitors opting for similar designs with a contemporary twist to cater to upper class NEGATIVE INFLUENCES EXTERNAL EXAM INTERNAL EXAM • • • Wide range of products and styles Cheap and affordable One stop shop Easy shipping and transportation Eco friendly and recycling ofS products Functional design of products Appealing shopping experience WEAKNESSES Assembly of furniture W Yet to invade upcoming global markets Products don’t last long Product dimensions unsuitable for global markets Advertisements in the form of catalogues mostly . etc.POSITIVE INFLUENCES OPPORTUNITIES STRENGTHS • • • • • • • • • O • Untapped markets like middle east and Asian countries • Better advertisements • Online sales • Demand for greener and environment friendly products SWOT THREATS T • Organized sectors like Wal Mart.

Technological PEST Analysis • Flat sized packaging • Innovative designs Social • • • • Lesser carbon footprints Ecologically sustainable Recyclable products Online tips on reducing environmental impact (CSR) Political P T Furnitu re Market S E • • • • FDI Policies Labor laws Taxes and duties Environmental Laws Economic • • • Recession reduces disposable income and hence the demand (Low prices advantage) Enjoys economies of scale High barriers of entry for competitors due to low prices offered to consumers .

4P's Marketing Mix Produc t Price Marketin g Mix .

IKEA's Product Price Matrix Product Price Mix STYLE PRICE RANGE High Mediu m Low Scandin avian (Sleek Wood) Modern Country (Minima (Neolist) traditio nal) Young Swede (bare bones .

Finding Smarter ways to make Furniture Strategy followed by IKEA Price Qualit y .

Implementation Steps Establish Retail Price Select Manufacturer Determine the material used Design Process .

Step 1: Establish Retail Price • Using the matrix. • It would survey the competition to establish a benchmark and then sets its own price point 30-50% lower than rivals. IKEA would set the price range. .

Step 2: Select Manufacturer • More than 1800 manufacturers in more than 50 countries • Build long term relationships • IKEA circulates a description of proposed product's specifications and target cost and encouraged them to compete for the production package • Sometimes it might have different product component from different supplier .

Step 3: Determine the material used • Done by IKEA engineers • Focus on cost efficiency • Using different types of wood for a single wooden product • Using high quality materials on furniture surfaces that were visible and most likely undergo stress • Using low quality material on surfaces that were low stress and less visible to the customer .

Step 4: Design Phase • Use internal competition to select a designer • Flat packaged boxes to make it easier for consumers to transport the furniture home + save shipping costs .

4P's Marketing Mix Produc t Price Marketin g Mix Placeme nt .

Customer Experience at IKEA • Bright and inviting experience for customers • Resembles Modern Theme park with childcare centers • Restaurants serving various delicacies .

IKEA for kids: You shop. kids play • IKEA provides clean feeding and changing rooms for small children • Restaurant has a special menu just for kids .


4P's Marketing Mix Produc t Price Marketin g Mix Promoti on Placeme nt .

Communication Strategy for America .

Perceptual Map .

Segmentation .

Video 1 .


Video 2 .


Video 3 .


27 bn) 3rd largest store .IKEA INVADES AMERICA 1985 Mid 1990’s 1997 1998 1999 2000 2001 2002 First store Company’s fortune changes Revenues double ($600 mn to $1.

the prospect will give you a positive •The Law of the Category: If you can’t be the first in a category. restaurants and help desk . set up a new category that you can be first in •Additional Customer facilities: child-care.PROMOTION STRATEGIES •Commitment-free approach to furniture – “ Unboring” advertisement •Web site advertisement •The Law of Candor : When you admit a negative.

the Indian furniture market is estimated to be MARKET worth US$ 7.ibef.INDIAN FURNITURE •As of 2006.org/download/Furniture_170708.pdf .9 billion Source: http://www.


IKEA INVADES INDIA Source: http ://online.wsj.com/news/articles/SB100014241278873242 66904578458840277908564 .

New Diversification Existing Markets Markets Market Development Market Penetration Product Development Existing New Products & Services .





livemint.html .com/Money/jI27GvmsK5stzTn61yyWUN/I keas-consumer-challenge-in-India.IKEA’s communication strategy* • Media Channels covered – TVC – Print – Digital • Pull Strategy • CSR initiatives Source: http://www.