Ikea Essay

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EXECUTIVE SUMMARY IKEA is one of the world’s largest and the most successful home furnishing retailer. IKEA was founded by Ingvar Kamprad in Sweden in 1943. IKEA started their successful expansion journey from Sweden then Western European, United Kingdom, North America, Canada, United States and Asian. As at 2008, IKEA has 285 stores in 35 countries. IKEA’s target market is the young upwardly mobile global middle class who are looking for low-priced but attractively designed furniture. Ingvar Kamprad’s idea was to offer home furnishing products of good function and design at prices so low that as many people as possible will be able to afford them. IKEA’s marketing strategy is enhances the consumer experience and stimulates impulse purchases. On-going effort to drive down the cost of production and co-operate with suppliers to introduce new technology make IKEA become success. Challenges: IKEA faced many challenges for international expansions. When IKEA enter into new market, they have to study the culture of target place to avoid the bad experience when they entered into United States. Feasibility study is necessary to ensure their product can resonate with local consumers. Moreover, supply chain management is the key issue which affects the production cost. Select new target market need to consider the supply of raw material and available suppliers. Rapid growths of IKEA that attract many copycat producers exist and then induce the challenges of pricing. Alternatives: To maximize the profit of IKEA, international expansions in new market to possess more market share to gain comparative advantage is a must. South Korea is the one of the country in Asia not yet establish IKEA store. We tried to use an internal analysis (SWOT) and external analysis (PESTEL) to investigate whether IKEA is suitable develop in the ROK and which kind of entry mode is more

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