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Introduction of IKEA retail company
The
well-known global brand is IKEA, which has hundreds of stores across the world.
In 1943 the company IKEA was founded which also carries the 9500 products that
also include the home accessories and home furniture. In 2008 IKEA presented
sales of 21.2 billion Euros. Every year IKEA shows the increments in sales that
are also focused on creating a better life every day for the customers. Thus in
2015, IKEA estimated the total sales like 31.9 billion Euros, where the total sales
increase by 11.2%. On the other hand, the
focused of IKEA is to lower the price of their main items. That also serves on the
customer that is willing to buy the better even for low prices. A reasonable
rate company will design the products as well as catering products for everyday
lives. The goals of the business strategy for IKEA involve the combination of the
economy for the environment as well as society. Stores of IKEA includes the
cafes as well as a restaurant for serving the typical Swedish food, which also has
the small food shops for the Swedish groceries where everything is very famous
like a meatball to jam.
SWOT Analysis of IKEA retail company
The
following table represents the SWOT analysis of IKEA Company.
|
Strengths |
Weaknesses |
|
v
Clear Vision of Ikea company v
Integrated supply chain v
Goodwill in the targeted market v
Effective managerial strategies |
v
Difficulty in controlling
geographically expanded business v
Cost control strategies are critical
to the quality of the products. v
Poor environmental concerns can
influence business outcomes. |
|
Opportunities |
Threats |
|
v
Changing trends of furniture v
Increase in online sales v
Expansion of business in diverse
markets e.g. grocery market |
v
Increasing competition among existing
competitors v
Entrants of new competitor companies v
Instability in the economic condition
of some targeted countries. |
Key
strengths of IKEA Company are a clear vision of Ikea Company, an integrated
supply chain, goodwill in the targeted market and effective managerial
strategies. IKEA Company has clearly defined what the company aims to
accomplish. Because of this, all operations from the corporate level to the
bottom level are aligned to accomplish the same goals, objectives, and vision
Integrated
supply enables IKEA Company to build a competitive advantage in the targeted
market. The company has a good reputation in the market as the company is
serving from the past many years with high quality and most satisfying
products. Moreover, the managerial staff is experience who creates effective
strategies to operates and deal with competitive forces appropriately
Key
weaknesses of IKEA Company include difficulty in controlling geographically
expanded business and poor environmental concerns. According to the analysis,
cost control strategies are critical to the quality of products offered by IKEA
Company. The company sometimes over-rely on cost control strategies to expand
profit margin but in the result of this, they compromise on quality which can
influence business outcomes and the company's reputation in the market
Lack of importance given to environmental
concerns is also a negative factor for long term business success. Wood
obtained by cutting the tree to make furniture develop concerns about
environmental pollution and environmental safety. Additionally, the company is
working on a large scale. Working in culturally, religiously, and
demographically diverse markets makes it difficult for managerial staff to
develop appropriate strategies and decisions which benefit all markets
There
are some opportunities in the market that can be used to enhance business
growth and increase profit. Changing trends of furniture, increase in online
sales, and expansion of business in diverse markets e.g. grocery market are key
opportunities for IKEA Company
Currently,
fashion and designs for furniture are changing in the world. People prefer to
update their houses and offices with modern designs of furniture rather than
staying with furniture until its useful life. Thus, changing trends and
fashions increase demand for new furniture. Although, online sales trends and
business expansion in other running markets also open a new stream of revenue
Increasing
competition among existing competitors, entrants of new competitor companies
and instability in the economic condition of some targeted countries are the
key threats for IKEA Company which need to be controlled to ensure sustainable
growth of business in the future. The company operates in some economically
unstable countries in these countries change in the purchasing or spending
capacity can directly influence business profit
Macro-environment (PESTEL) of IKEA retail company
The important macro-environmental factors that induce
impact on the organization are political economic social technological
environmental and legal factors. These important factors are considered in the
PESTEL analysis tool to determine the future of IKEA
Political and Legal factors of
IKEA retail company
The political factors include governmental policies,
funding, grants, and initiatives. IKEA operates around the world and follows
different legal and political factors of different countries. In each company,
IK EA operated and adopted different policies to improve the working
strategies. Super policies are designed for China and the legal factors are
considered for policies are designed in India. Foreign direct investment of
IKEA is 100 %
Economic factors of IKEA retail
company
Different factors are comprising of environmental
economic factors and these factors included spending patron and consumer buying
power. IKEA focuses on all these factors before and after taking any initiate
of strategies. The major source of business in the company is from Europe. The cheaper
and stronger Local market in China is providing services at minimum rates
During 1990 the
most blooming period, many countries changed their policies for international
companies in order to boost their own economy. China also took initiative for
growth, fastest and strong economy. At this moment IKEA took advantage of
opening the first store in Shanghai. In
China, IKEA used cheap labor and produced more amount of product. Due to
economic factors, China became a successful country for the improvement of
business
Technology of IKEA retail company
The
Rapid development of Technology has altered the world manifold. The use of
innovative technology can reduce production cost but It can develop new and
Revolutionary products at the same time. The flat-pack furniture system of IKEA
remained the most successful quick and desirable products. IKEA has introduced
an online shopping system for the customers to purchase the product at any time
from any place. IKEA has currently developed an iPhone app to attract more
customers
Environmental factors of IKEA retail company
One
of the major environmental factors for IKEA is that it can become a furniture
company that is recognized at the world level. IKEA is manufacturing beautiful
wood furniture that satisfied the Desire of customers. The products produced by
IKEA are environmentally friendly because they are made of wood chips as well
as recycling plastic. In a new direction
of the business, IKEA has produced energy-saving bulbs and these products use
less power. Therefore, it can be concluded that IKEA is producing products
conceding environmental practices and the services are eco-friendly
Legal factors of IKEA retail company
IKEA is a worldwide recognized company because the
company considered legal and political differences for the workers and
location. Rules and regulations are defined in the company to accept the
working criteria of employees.
Microenvironment of IKEA retail company
The micro environmental analysis of IKEA considers
different operations that induce an impact on the growth of the company. The management of IKEA has developed a
strategic way to deal with Vidya competitors. In this process, different
activities, particularly the implementation of appropriate pricing is
considered as a strategy. The microenvironment of IKEA consist of customers of
the company. A positive working relationship is required to be developed
between clients and service providers in IKEA. This process could lead to the
expansion of market share in the company.
For the general relationship of public the employees of IKEA must be
capable to work efficiently
The current analysis
considered the expansion of market share and the positive relationship of the
partner. IKEA has to develop improved Strategies for the suppliers to maintain
the regular supply of products. On the contrary, the relationship between the
public and cooperation is essential. The relationship of customers with the
public creators in IKEA generates a negative image of the company
Ideally, the marketing mix is an effective way to
increase sales in the company. The
marketing department of IKEA considers different factors particularly for
elements of the marketing mix that can control the sales. The place aspect of
the marketing mix enables the company to identify the most suitable location
for the company. Lastly, the promotional elements of IKEA are built upon
appropriate technique selection and have a positive impact on the development
of the company
Digital marketing communication
goals of IKEA retail company
The implementation of digital communication is to
contribute to marketing goals. IKEA has developed a strong foundation of
business and the concept is best for Integrated Marketing Communication. IKEA
is working on stability and sustainability factors very successful Integrated
Marketing Communication system. The strong Foundation provides services such as
customization options of furniture, sustainability efforts, new marketing
tools, and a shopping experience that is valuable to make convenient services for
the customers of IKEA. In marketing research, it is indicated that IKEA is
improving digital and social media strategies
The Integrated Marketing Communication plan is focusing
on the alignment of sustainability effectors and marketing efforts. This
integrated approach considers many factors to increase the sales and Awareness
of products provided by IKEA. The integrated communication approach includes
direct marketing, United creativity, paid advertisement, sales promotion for
the customers, and digital marketing
IKEA is improving the awareness and style of furniture
in the world. IKEA developed different tools for online and in-store shopping,
and it facilitates customers. The customers are informed of sustainability
efforts. Different communication strategies are improved, and customers are
informed of sustainability efforts to communicate the customers and the market.
The focus of the company is towards marketing efforts and advertisement and it
is working up on social networking media and a digital advertisement
There are four
primary areas of IKEA marketing mix and these include a product range of IKEA,
stores, catalog, and marketing efforts. The Integrated Marketing Communication
strategy is facing competition with competitors. Some of the low-price outlets are providing
low-cost products in the United States and other areas and IKEA is working on
to overcome the competitors. Different online design tools and social
networking are considered in the digital marketing efforts of IKEA
Currently, the
company is facing challenges due to economic issues and an increase in
advertisement demand the increased demand for social networking required high
investment. Selling low-cost furniture can cause issues and disadvantages.
There is a threat of low carbon footprints. Americans are ready to purchase
products from the IKEA company and are currently facing economic challenges and
it is required to have cost-effective products and improved advertisement of
the products. Digital tools and interactive websites are a source to engage the
customers and keep them updated with the services
Digital Marketing Communication
Strategy of IKEA retail company
IKEA
is famous for selling furniture around the world and brilliant digital
marketing strategies are developed in IKEA. The company is earning from an
offline and online business transaction. IKEA is taking advantage of online
technology and marketing strategy by using social media effectively
1.
IKEA is using social media channels with a high potential
for business growth and development.
2.
The use of social media is making the brand
imperative and valuable in the market. The company is posting promotions,
events, discounts, and give away on social media platforms.
3.
IKEA is following the latest technology trends
such as superimposing computer-generated images.
4.
The virtual reality technology is also used by
IKEA to make game content and provide entertainment for the customers.
5.
Unique virtual experiences are also developed,
and the customer can access Virtual reality Technology.
6.
The use of virtual reality technology in IKEA is
making the customers close with more loyalty. The website and content are
updated very often to get potential customers.
7.
The customers can check the catalog of new
products.
8.
Social media is used for campaign, promotion and
community outreach. IKEA permanently increase the interest of people by
advertising new products on social media.
9.
Content marketing is also playing a significant
role in the digital marketing strategy of IKEA.
10. It
is a master of crafting online content and customers are eager to watch
effective content marketing.
IKEA
is now interacting with the customers through the platforms of social media. The
shopping behavior of customers is changing with the increase in Technology. The
customers are shifting marketing strategy for product innovation. IKEA has
developed an innovative website with changing banners
Conclusion of IKEA retail company
Summing up all the discussion it is concluded that, the report is about the IKEA brand on the macro and microenvironment. SWOT analysis of IKEA, which also has eth three important factors which are related to digital market communications. Then in this, as shown in the above discussion the Digital communication goals as well as the strategy of digital marketing is also explained. Where the IKEA brand has a better vision for everyday life which is a concern at the heart of the business. In the Macro environment of the IKEA brand, the PESTLE analysis is explained as shown in the above discussion whereas in the Sociocultural it is difficult for IKEA to integrate itself in the American markets. All the aims and objective regarding the report requirements is obtained as shown in the above discussion.
References of IKEA retail company
Baines, P., Fill, C., &
Page, K. (2013). Essentials of Marketing. oxford.
Chaffey, D., & Smith, P.
(2017). Digital Marketing Excellence: Planning, Optimizing and Integrating
Online Marketing. Taylor & Francis.
Digitalagencynetwork. com.
(2019). IKEA’s Digital Marketing Strategy: 8 Things to Know About the
Company’s Success. Retrieved from digitalagencynetwork.com:
https://digitalagencynetwork.com/ikea-digital-marketing-strategy/
Henriksen, B. H. (2018). Holk
Master-Class, ABC of Strategy, Marketing, and Communications. Blurb,
Incorporated.
Ikea. com. (2019). Marketing
and Communications. Retrieved from www.ikea.com:
https://www.ikea.com/ms/en_US/the_ikea_story/working_at_ikea/work_areas_marketing_communications.html
Medium. com. (2017). Ikea’s
Unique Digital Marketing Strategy. Retrieved from medium.com:
https://medium.com/@nicholasdessy/ikeas-unique-digital-marketing-strategy-92bba458c92
Pappas, Nikolaos, Bregoli,
& Ilenia. (2016). Global Dynamics in Travel, Tourism, and Hospitality.
IGI Global.
Ryan, D., & Jones, C. (2012). Understanding Digital Marketing: Marketing Strategies for Engaging the Digital Generation. Kogan Page Publishers.
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