IKEA: Franchising To Reach More People & Unique Store Design - Essay Sample

Introduction

IKEA can expand the business of both the existing and new retailers through the aid of the franchising business model, and in the new regions, the franchising operations enable IEA to reach more of the several individuals. The design of the IKEA store was in such a manner that a customer has to follow a given path that ensures that they have a glimpse of every product while in the store. Besides, the store got designed such that in the first half, the shopper finds the catalog for themselves in a physical form enabling them to locate the exact location of every product quickly. For the showroom, it is divided into sections depending on the furniture time, for instance, the office chairs, dining table sets, and living room sofas among others. If a customer, for example, wants a piece of furniture that they have seen in the showroom, they will check for the location of that specific furniture by looking at the tag attached to it; and the area of the furniture is in the second half of the store. Before a customer reaches storeroom, there are several small attractive items along the way which could attract the customer to buy before leaving the store. The shopper also gets confused with various offerings within the stores which are made intact with the contingent generation's preferences, making the buyer to come back with enough cash to purchase some other goods. Again, when the customer arrives for the second time, he will see some other new exciting products which will pull him to come back and again hence rendering him a regular customer. The reason why IKEA is trying to reach counties in Americas, Europe, Australia, Asia, and Russia is, in these countries, there is high customer concentration as compared to other parts of the world.

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IKEA need to do much about its localization strategy. It would be an excellent experience for the customers to stumble upon familiar stores of IKEA that looks alike with services offered the same way across all the stores as this would make their customers feel a sudden wave of comfort even in a different place. According to Lemak and Arunthanes (2016), developing a standardized revenue growing model would translate into a standardized experience by the customers to meet the changing customer tastes around the world. The company should also seek to come up with products appealing to the local populations as a means of localization. For instance, the stores in Russia should have the majority of the products, let's say 50% of the products, appealing to the Russians, and the remaining 50% for the sake of diversification (Rigby & Vishwanath, 2006). To make the consumer offerings regional, the company should think about going local even in their supply chain as well, and this is a perfect thing for IKEA to do. According to Rigby and Vishwanath (2006), it is also important to note that customization has limits and that a company cannot customize all the business elements in all the locations. The costs incurred would be overwhelming due to the complexity, and this could even lead to paralysis.

References

Dudovskiy, J. (2017). IKEA Segmentation, Targeting and Positioning: Targeting Cost-Conscious Customers.Retrieved from https://research-methodology.net/ikea-segmentation-targeting-positioning-targeting-cost-conscious-customers/

Govindarajan, V., & Ramamurti, R. (2011). Reverse innovation, emerging markets, and global strategy. Global Strategy Journal, 1(34), 191-205. https://onlinelibrary.wiley.com/doi/abs/10.1002/gsj.23

Lemak, D. J., & Arunthanes, W. (2016). Global business strategy: a contingency approach. Multinational Business Review, 5(1), 26. https://www.questia.com/library/journal/1P3-11023064/global-business-strategy-a-contingency-approach

Rigby, D. K., & Vishwanath, V. (2006). Localization--the revolution in consumer markets. Harvard business review, 84(4), 82-92. https://hbr.org/2006/04/localization-the-revolution-in-consumer-markets