IKEA's Global Strategy: Affordable, Quality Products Everywhere - Essay Sample

Paper Type:  Essay
Pages:  4
Wordcount:  1078 Words
Date:  2022-12-28


IKEA has managed to win a more significant share of the global market through the use of some of the best global strategies in the acquisition and marketing of its products. Some of the important characteristics of the IKEA global strategy include the following. All the warehouse-type stores belong to IKEA sell the same broad range of products ranging from food, accessories, furniture, and kitchens, and all their products are sold at an affordable price globally. The global strategy employed by IKEA could be put in simple terms as a global sourcing approach. The strategy is a global sourcing approach since IKEA obtains only the best products that it uses in its production and the products are purchased from countries with high competitive advantaged in the market and in in the production of particular products. As a result of this strategy used by IKEA, it becomes convenient and easy to achieve the best quality products at costs that are comparatively low as compared to the other strategies used by other organizations.

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IKEA has a vast number of customers visiting its global stores every year. Approximately, an estimated total number of one million customers visit the IKEA stores every year. The following is a description of the profile of IKEA's target customers' demography. In terms of region, the targeted customers are of Russia, Europe, Asia, America, and Australia origin. And those targeted are individuals living in urban areas. The age of the targeted customers are the working class especially with an age bracket of 22 and above, and their gender is both males and females (Pirttimaki, 2007). For the marital status, IKEA targets people across the marriage status, the unmarried, the married, and even the divorced. The occupation targeted cuts across the students, employees, and professionals. For the social class, IKEA targets the lower level, the working class, and the middle class. Lastly is the lifestyle targeted whereby we have the resigned guys, the strugglers, mainstreamers, and the explorer (Govindarajan & Ramamurti, 2011).

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.

The consumer markets are today experiencing a quiet revolution, and for businesses to thrive, they have to remain vigilant with all the aspects of business changes. Some of the firms that have for a long time dominated the lands like McDonald's, Wal-Mart, and Best Buy have today changed to the single-minded standardization strategies by fine-tuning the formats of their stores, mixing merchandise, as well as their marketing and operating processes. As a result, such giants have rolled out their winning on an international level. From their suppliers, they have demanded a rigorous consistency, and this has helped them to push deep their standards of standardization ethics into companies dealing with a consumer product and across the whole consumer supply chain.

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 (Singh, 2011). 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 Weinrauch (2014), 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.


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

Pirttimaki, V. H. (2007). Conceptual analysis of business intelligence. South African journal of information management, 9(2), 1-1. https://www.ingentaconnect.com/content/sabinet/info/2007/00000009/00000002/art00002

Singh, N. (2011). Localization strategies for global e-business. Cambridge University Press. https://books.google.com/books?hl=en&lr=&id=7KwgAwAAQBAJ&oi=fnd&pg=PR11&dq=peer+reviewed+sources+on+business+localization&ots=3_G3cpKwGn&sig=wDyF6Zdx7iloqlFjLDCU364KIt8

Weinrauch, J. D. (2014). Franchising an established business. Journal of Small Business Management, 24, 1. https://www.questia.com/library/journal/1G1-4530694/franchising-an-established-business

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IKEA's Global Strategy: Affordable, Quality Products Everywhere - Essay Sample. (2022, Dec 28). Retrieved from https://midtermguru.com/essays/ikeas-global-strategy-affordable-quality-products-everywhere-essay-sample

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