Marketing and Ikea Essay

1251 Words Nov 23rd, 2010 6 Pages
Petrut Bumbanac
International Business
Shamla Chebolu
November 6, 2010

IKEA – The Global Retailer

1. How is IKEA profiting from global expansion? What is the essence of its strategy for creating value by expanding internationally?

IKEA increased its growth rate by taking its products developed at home and selling then internationally. This expansion allowed the company to offer its products not only to the Swedish consumer, but also to other consumers around the world, in an effort to increase profits and further develop the company. The company had a defined strategy when it chose to make a move on the international market, a strategy that focused on cost reduction that allowed its offerings to be sold faster at a discounted
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That means that consumers buy products that they have to assemble themselves, a method that also helps the company to maintain low-costs. The company was also able to have success in foreign countries by redesigning its offerings to fit the taste and preferences of consumers in different countries. IKEA was able to create a culture in international stores that is similar to the culture of that particular country, a culture that customers can relate to, and which makes them feel like home.

2. How would you characterize Ikea’s original strategic posture in foreign markets? What were the strengths of this posture? What were the weaknesses?

Ikea’s original strategic posture in foreign markets had the ability to shape the future of this industry, allowing the company to act as a true leader in its field by creating high quality standards, by offering high quality products at acceptable prices, and by being innovated in the foreign market. The company still uses the same basic retailing formula that offered success in the mid nineteenth century, selling its various high-quality offerings in big stores at low-prices. The strengths of this posture is that IKEA continued to attract the same middle class consumers who were looking to spend their money on well-designed furniture sold at affordable process, which over the years became Ikea’s trademark.. Ikea’s original strategy changed the way people bought furniture. Today IKEA uses as its main marketing strategy, along

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