IKEA Case Study
#19. Global or Regional Strategies
The management of IKEA indicates that the company has made a significant impact to many individuals across the globe. Apparently, Ikea seeks to enhance its global presence in distinct markets. Accordingly, the management of the company notes that there are various untapped markets all over the world and this forms a significant demand for its products. Imperatively, the firm focuses on the introduction of low-cost items to different markets. Due to the reliance on the global market, the firm has had to introduce products in markets such as China. In many cases, institutions that seek to enhance their global market focus on the emerging markets that include Brazil, India, Russia and China. Notwithstanding, the leadership of the enterprise indicates that there is focus on standardization of its products and maintenance of the low pricing technique to attract an increasing demand for the products. For this reason, the firm believes that this is a global brand that can make a difference in the furniture industry as opposed to being a regional strategy.
#20. IKEA Global Strategies and Product Strategies
For a business to prosper in distinct markets there is a need to define the customer values and expectations. Imperatively, the management of IKEA focuses on listening, understanding and adapting the aspects that can satisfy the clients. Accordingly, the firm notes that most of the individuals may need furniture after every few years and this call for a change in the design and materials. Since the firm has to ensure the costs are low, they may have to find the alternatives that make the costs of the goods cheaper as compared to the clients. Imperatively, the availability of different designs also gives the customers choices such that they create a demand after a short period. Since the acquisition of the furniture is low when compared to the rivals, many people make IKEA the business of choice. Notwithstanding, the availability of the services in most of the regions across the globe makes it a viral enterprise that attracts many people. Notwithstanding, the company appreciates the low pricing strategy that makes a difference in the lives of many individuals since they can afford the merchandise. For this reason, there is an increasing demand for the products in the regions that the company has registered its presence.
#21. Difference in Pricing
The pricing of a product is dependent on various factors such as labor and availability of materials. Imperatively, the pricing strategy of the products that are sold by IKEA may not be constant in all the regions as this could lead to losses. On the one hand, there is a need to focus on the market conditions such as inflation especially when the firm has to trade using the local currency. For instance, the devaluation of the dollar in China means that the pricing of the products will have to change to cushion the change. More so, some of the factors of production may have to be moved from one place to another, and the client may have to bear some of the costs. For instance, the workers and materials may be moved from one region to another to execute the tasks. In such a case, the firm will have to incur additional costs that will affect the pricing of the furniture. Additionally, the market demands in regions such as the US are different from the customer preferences in China. For instance, the market in China may create a demand for furniture that reflects the size of apartments. In fact, the modification may create a distinction in the pricing since there is a need to change the designs and materials used.
#22. Duplication of IKEA Strategy
Many institutions prefer to induct intellectual property to protect their ingenuity and innovations. However, there is a limit to the safety of the creativity as some people may create patents that could resemble the hitherto products. For this reason, IKEA is at risk since it may record losses due to the copying the designs of the company. For instance, after the initial inception of the products in China, it is evident that the local stores were no longer profitable since most of the businesses in the area duplicated the designs by the firm. Ideally, this scenario suggests that there could be an increase in competition since the firms can define definite approaches that could improve the quality of the products. However, it may not be easy to level the pricing of the products by IKEA unless the institutions use economies of scale in production. More so, the rivals may need to provide exceptional services and satisfy the needs of the customer by understanding their needs and focusing on their demands yet this is not possible especially if the enterprise is new in the markets that are dominated by IKEA.
#23. Expansion Strategy
Institutions find it appropriate to expand and grow to achieve their potential especially when they have a significant market. Ideally, IKEA depicts the character of increased growth since the pilot studies in countries such as China have made significant progress. Imperatively, the firm should consider increasing its production in the vast markets since most of the rivals have not focused on this approach. For instance, there is a need to explore untapped markets in China and the United States as this could formulate a significant demand for the products. Imperatively, the low pricing in the United States makes the products affordable to a significant majority of the population although this is not the case in countries such as China. For this reason, there is a need to introduce new stores in the United States while focusing on an expansion program that will dominate the areas near cities in China. Additionally, the firm may consider the introduction of production firms in the areas with vast markets to ensure that the pricing strategy remains low when compared to the merchandise that is sold by the rivals.