Ikea

1. INTRODUCTION OF CASE ANALYSIS

1.1 Executive Summary

IKEA, Sweden’s leading furniture retailer, has become a global phenomenon embraced by people around the world. Its success is attributed to the affordable prices and continuous product development. Ikea’s unique business model that they have incorporated in each country they entered reflects their success in the global penetration.

Ikea had several obstacles to overcome to attain their dominance in the furniture industry. Firstly, the issue of ethnocentrism translates to the level of acceptance of the global consumers. For example, the Swedish brand may not be readily accepted by the Asian culture due to unfamiliarity and strong belief in their own countries’ products. Another problem is the perceived risk of purchasing a low priced product that may imply low in quality. Finally, with Ikea’s large pool of suppliers across over 50 countries, consistency may be compromised.

Ikea addressed these issues through various marketing tools such as usage of ethnic media. The IKEA catalogue had been able to reach out to the different cultures due to its language locality. The vast usage of new media narrowing the cultural gap had also contributed to the awareness and acceptance of different cultures, more specifically in this case, the Swedish culture. To reduce the perceived risk of purchasing low priced items, IKEA targets the global middle class who share similar buying habits. These consumers embrace Ikea’s constant product development and Sweden’s positive image.

Adaptation to the local cultures may have contributed to the acceptance of the Swedish brand into the global market, however, their standardisation strategy ensured consistency for consumers to be enjoyed across the world. By and large, Ikea had done an excellent job at making the world feel at home.

1.2 Introduction

IKEA was founded in 1943 by Ingvar Kamprad, with the first store located in Almhult, Sweden. It was the largest...