Analysis Of The History For Ikea Marketing Essay

Analysis Of The History For Ikea Marketing Essay IKEA was founded in 1943 by a Swedish entrepreneur Ingvar Kamprad when he was 17 years old. The name of IKEA is derived from the initial of its founder name Ingvar Kamprad, the farm Elmtaryd and home country Agunnardy where Ingvar Kamprad grew up. IKEA has developed rapidly and known as the largest home furnishing retailer (INTI). The corporate structure mainly divided into two parts which are operation and franchising. Operation covered the management of majority stores, design, purchasing, supply functions and manufacture of furniture, which manage by a private profit Dutch company, INGKA Holding. In 1982, Kamprad established Stichting Ingka Foundation, a non-profit foundation that control over INGKA Holding. Ingka Foundation chaired by Kamprad and five executive committees which included her wife. The IKEA trademark and concept is owned by separate Dutch firm, Inter IKEA Systems based in Luxembourg. Every IKEA stores pay 3% of sales to Inter IKEA as a franchise fees. IKEA consume rs are mainly distributed into four different geographic regions, Europe, America, Middle East and Asia. The vision of IKEA is to provide affordable solutions for better living and its mission statement is to offer low price furniture with stylish functional designs which everyone could afford. 2.2 Company Product and Services IKEA seized retailer chain that sells flat pack furniture, kitchen and bathroom accessories across the world. The furniture designed to be self assembled in order to reduce transportation cost. Besides, the company include traditional Swedish food restaurant in their stores, which serving Swedish meatballs, smoked salmon, lingo berry tarts and cream source. Moreover, thoughtful part of IKEA is many stores have play area for children named Smaland, where parents able to drop their children to playground while shopping and pick them up at another entrance. 2.3 Corporate and Current Business Strategies Globalization is the current trend for most of the companies nowadays. To gain market share in new entry countries especially Asia, IKEA corporate and business strategies determine its sustainability and competitive advantage among competitors in future. For example, IKEA globalization strategy in Asia country, China, comprise of joint venture, localization and pricing strategies. First of all, IKEA joint venture with local companies in China, due to one of the macro-environmental impact which was political policy of Chinese government in order to archive principal of equality and mutual benefits (INTI). Second, IKEA adapt localization strategy to suit local Chinese culture, for example, IKEA provide balcony section due to most of the Chinese population stay in apartment (INTI). Lastly, pricing strategy allow IKEA to compete against rivals, for example, IKEA cut cost for some goods like single-scat Ektorp armchair below standard price which is cheaper than it sold in United States. IKEA distinctive business and corporate level strategy have a llowed the company attains impressive growth 2.5 Current Strengths and Advantages The major strength and driving force that push IKEA expands aggressively is the value chain. Value chain is a tool used to identify value added into a business. Porter illustrates business value chain categories into two activities. The primary activities are directly related to creating and delivering products, while secondary activities are not directly involved in production process but could increase efficiency and effectiveness of business. IKEA modified the value chain to mobilize suppliers and customers assist in further add value to the system by convincing their customer perform the transport and assembly their flat pack products. ()