IKEA’s Global Strategy: Furnishing the World

1
IKEAs Global Strategy Furnishing the World

• Kate England
• Brenna ORegan
• John Hudson

2
Background

• Founded in 1943, in Sweden, by a man named Ingvar
  Kamprad
• Initially offered items such as pens, wallets,
  picture frames, jewelry, etc.
• In 1947, furniture was added to their product
  selection, followed by personally designed pieces
  in 1955

3
General Information

• Defined as a lifestyle furniture store
• Known for selling disassembled furniture
• Operates 253 stores, in 35 countries (with the
  majority being in Europe, the U.S., Asia, Canada,
  Australia)
• 70 of IKEAs annual marketing budget is consumed
  by their catalogue

4
Global Expansion

• IKEA plans to enter
• -numerous other U.S. states
• -Cyprus in the summer of 2007
• -Northern Ireland in November 2007
• -Ukraine in early 2008
• -Republic of Ireland New Zealand, tentatively

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Current Locations

• Europe Belgium (6),Czech Republic(4),
  Denmark(4), Germany(41), Spain(11), Greece(3),
  France(20), Iceland(1), Italy(14), Hungary(2),
  The Netherlands(12), Norway(5), Austria(6),
  Russia(8), Poland(7), Portugal(1), Romania(1),
  Switzerland(7), Slovakia(1), Finland(3),
  Sweden(16), Turkey(2), United Kingdom(15)
• North America Canada(11), United States(29)
  Arizona(1), California(8), Connecticut(1),
  Illinois(2), Georgia(1), Massachusetts(1),
  Maryland(2), Michigan(1), Minnesota(1), New
  Jersey(2), New York(1), Pennsylvania(3),
  Texas(3), Virginia(1), Washington(1)
• Middle East Kuwait(1), Israel(1), Saudi
  Arabia(2), United Arab Emirates(1)
• Asia-Pacific Australia(5), China(4), Hong
  Kong(1), Japan(2), Malaysia(1), Taiwan(1),
  Singapore(2)

6
Product Lines

• IKEA offers 21 different product lines
• -Bathroom, Beds, Mattresses -Clothes Storage
• -Bookcases Storage -Decoration
• -Chairs Tables -For the Pets
• -Childrens IKEA -Lighting
• -Textiles -Kitchen
• -Cookware -Work Area
• -Sofas Armchairs -TV Media Solutions
• -Floors -Furniture Care
• -Tableware -etc.

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Current Issues

• IKEA attempts to target the small-business market
• Tax avoidance criticisms
• The Berne Declarations nomination of IKEA for
  one of its Public Eye awards
• VISA mobile checkout devices that reduce long
  waiting lines at checkout counters

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Suggestions

• Maintain superior quality image
• Research countries thoroughly before entry
• Expand the number of products offered in
  catalogues
• Offer extra incentives to customers who shop from
  the catalogues

9
Lessons

• Fully research the countrys promotional
  techniques before entering the market
• Make sure all products are customized to the
  country in which they are sold

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Sources

• Anderson, Kay. (August 21, 2006). Furniture
  stores see market share slipping.
• Furniture Today. Retrieved April 4, 2007 from
• Executive Perspective. The Merchant Landscape
  Interview with Lory Yeakle (2006).
• http//www.furnituretoday.com/article/CA6365162
  .html
• Facts and Figures (2007). Inter IKEA Systems
  B.V. Retrieved April 3, 2006 from
• http//franchisor.ikea.com/showContent.asp?swfId
  facts3
• Garcia, Shelley. (January 22, 2007). IKEA
  targets growth of small-business market
• retailer offering planning tools. San Fernando
  Valley Business Journal. Retrieved April 4, 2007
  from http//www.allbusiness.com/north-america/unit
  ed-states- california/3967121-1.html
• How Many Countries in the World? (n.d.)
  WorldAtlas.Com. Retrieved April 4, 2006
• from http//www.worldatlas.com/nations.htm
• IKEA (n.d.). Wikipidia Encyclopedia. Retrieved
  April 4, 2006 from
• http//en.wikipedia.org/wiki/IKEA
• IKEA AB Sweden. (2005). Mergent Online.
  Retrieved April 5, 2007 from
• http//www.mergentonline.com/
• Johansson, J.K. (2006). Case 1-1 IKEAs Global
  Strategy Furnishing the World
• Global Marketing foreign entry, local
  marketing and global management. 4th ed.
  McGraw-Hill/Irwin. p. 85-89.
• The IKEA Catalogue (2007). Retrieved April 4,
  2006 from
• http//franchisor.ikea.com/showContent.asp?swfId
  catalogue2
• The Visa Quarterly. Retrieved April 7, 2007 from