IKEA Marketing Case Analysis Case Study

Pages: 2 (935 words)  ·  Bibliography Sources: 0  ·  File: .docx  ·  Level: College Junior  ·  Topic: Business

IKEA Marketing Case Analysis

IKEA is a global leader in the do-it-yourself retailing industry, generated $32B in sales during the time period of the case study, up from 7% a year before, with previous years generating 14% revenue growth. With 80% of revenue generated from Europe, 15% from North America and the remaining 5% from Asia and Australia, IKEA is heavily slanted in operations, marketing, sales and retailing practices to Europe. Known as a brand synonymous with frugality and low cost, IKEA is challenged with entering new markets that expect high quality and whose customers demand very high levels of personalization. The core strength of the company is its supply chain integration to retailing, with 27 distribution centers across 16 countries and localized operations in 41 different locations. Their accuracy and speed of supply chain operations is an integral part of their unique value proposition as well, as they regularly set retail prices on products first, then find the suppliers who can meet the specific price points they need. Their marketing is heavily balanced to their catalog selling strategy which consumes 80% of the total marketing budget. IKEA concentrates on product design, catalogs, advertising and public relations as the core components of their marketing strategy. Their low-cost, frugal and egalitarian-based strategies are highly effective in Europe yet in North America the company continues to struggle.

SWOT Analysis

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IKEA became a global leader in do-it-yourself retailing by concentrating on their supply chain operations and fine-tuning them so well that the customer actually helps with the last mile of logistics and fulfillment. This model works very well in Europe, where customers often gain greater levels of satisfaction form the furnishings they build vs. just buy outright. The following is an analysis of the company's strengths, weaknesses, opportunities and threats.

Strengths

TOPIC: Case Study on IKEA Marketing Case Analysis IKEA Is a Assignment

Having fine-tuned their supply chain operations and logistics so well, IKEA has a very low-cost operating structure. They have successfully made do-it-yourself retailing a core part of their loyal customers' mindsets and expectations. In addition, IKEA continues to use their expertise in supply chain operations to drive increases in sustainability performance by recycling many of their containers and shipping materials. Unifying all of these aspects of their business model is a very egalitarian-based corporate culture and brand image of unpretentiousness.

Weaknesses

Just as their global supply chain expertise is a strength of low cost performance, it is also a weakness in terms of limiting the amount of customization that customers can do. Their do-it-yourself strategy can backfire at times, making the brand appear cheaper and less valuable over time too. The limited amount spend on promotional programs and weak online technical support show that marketing is an area that needs work in the company as well.

Opportunities

The economic conditions globally actually favor IKEA over the long-term, as the… [END OF PREVIEW] . . . READ MORE

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