Transcript 06级国贸1班第一小组：陈江，陈照佳，蔡纯，蔡欢然

IKEA'S GLOBAL STRATEGY:
FURNISHING THE WORLD
06级国贸1班第一小组：陈江，陈照佳，蔡纯，蔡欢然，张振辉
06级国贸２班第一小组：陈江，陈照佳，蔡纯，蔡欢然，张振辉
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for you to go back to the page of “our questions”
Our questions:
1） What are IKEA's firm-specific advantages?
Country-specific advantages?
2）.What are the cultural factors which make
expansion abroad in retailing difficult? What has
made it possible in IKEA's case?
3） Describe how IKEA'S expansion has reenergized mature markets around the world and
changed the competitive situation.
4） How does the TV advertising campaign initiated
by IKEA overcome the entry barrier of high
advertising expenditures?
5）Should IKEA expand further in the United States
or focus on other countries?
ⅰ. firm-specific advantages and
Country - specific advantages
1.IKEA sells the same furniture all over the world, so IKEA rips
huge economies of scale from the size of its stores and the big
production runs necessary to stock them.
2.IKEA also offers a low competitive price because of the
economies of scale (30% lower than competitors)
3.Exclusive relationship between IKEA and its suppliers, offering
modern and exclusive designs for IKEA. Designers also work
closely with suppliers, keeping the costs low.
4.Ready-to-assemble kits help to stack products in shelves in
order to maintain larger inventories.
ⅰ. firm-specific advantages and
Country - specific advantages
4.The cash and carry shopping formula; you can go to the rack
directly to collect the product and go home to build it by yourself.
5.Successful use of the word of mouth and the use of catalogues
in order to reduce the advertising costs.
6.IKEA has simple and plain staff levels, lowering the fixed costs
and giving more freedom to its employees. This management
structure also helps making decisions in a faster way.
ⅱ the cultural factors which make expansion abroad in retailing difficult
Retailing expansions can be difficult,
because of cultural differences in the
global market.. There are many factors
to consider when expanding into a
new area or culture, because culture
can have a great impact on
merchandising, promotion of
products,and cross-over of store
brands and brand images.
To make it possible to take part of
the market share, IKEA take some
measures in management.
1, Product Positioning
IKEA aimed to build up a polularoriented company that any common
civilian could afford the products.They
combine practicality with beauty,
reducing the cost of the products.
What’s more, the fascinating different
styles ,particularly that mixed with the
local cuture, are one of the most
significant reason that led to success.
2 Cuting The Cost
Low prices on the idea of product
design has always been. The
procedure of the design will always
stick to the idea of low price.And the
innovation and closely cooperation
with OEM manufacturer are always
contributing to cutting the cost
ⅲhow IKEA'S
expansion has reenergized mature
markets around
the world and
changed
the
competitive
situation.
Why IKEA can maintain their advantage at the global
stage ? there are 5 key reasons in it.
Firstly, IKEA perform the strategy in the globalization
of the production and the market, which made it get
more raw materials and customers to enhance their
market competitiveness.
Secondly, IKEA not only sells the furnishings, but
also the life style. Due to the comfortable environment,
IKEA attracts more and more people.
Thirdly, IKEA designs the beautiful products which
the ordinary customers can afford to. Also, IKEA puts
design philosophy on ‘whose design lower cost at the
same price of the products.
Fourthly, IKEA is welcomed to many people by its
popular Nordic design style.
Fifthly, IKEA adjust its products depending on the
local place so that it could adapt to the local customers,
in this way, it has a strong adaptive. Through these
strategies, IKEA has become more and more powerful
in the global stage.
ⅳ How does the TV advertising campaign initiated by IKEA
overcome the entry barrier of high advertising expenditures?
TV ads are still affecting the furniture industry. However, with the market
environment changes, the amount of information explosion, consumer
demand for personalized, a single ad has been running no longer be
able to bring about the desired results, We also need other through
different media (such as newspapers, magazines, web, DM) and
consumer multi-level communication with the ground, as well as the
marketing activities of the match. More importantly, enterprises should
be able to find their own channels of communication with consumers.
Ikea ads do not occasionally appear in the media, but more like in order
to strengthen the relationship between the media and public relations
media.
Ikea brand communication has been going its own way, including its
personality full of fine print catalog. IKEA in communication with the
consumer, more reliance on the "Guide to good home" .Catalog has
been the main means of marketing. IKEA every year in various parts of
the distribution of a large number of customers free of charge to the fine
print catalog, in China a year to distribute as many as 2,000,000, this
figure is alarming, it's even more than the number issued a number of
brand-name business magazines.
How does the TV advertising campaign initiated by IKEA
overcome the entry barrier of high advertising
expenditures?
The DM as a high-end advertising, Effective market reach, it
can ensure 100 percent, no one will be the exquisite "album
art" turn a blind eye. Many of the family decoration is almost an
IKEA catalog of staff, Although the cost of a one-time
expenditure of a great, but compared to television and other
traditional media advertising, in the long run, they save more.
Due to the effective reach and frequency of exposure to
uncertainty, advertisers began to look increasingly to television
advertising on other media, this time of the DM started out the
ads. Refined version of the DM100% to reach an effective rate
of 100% of the effective exposure frequency, so that
advertisers no reason not to treat each other as the other eye,
as the goal of IKEA's customers is limited, of course, it is
willing to pay high advertising DM spread the cost.
IKEA should not qiut the market of United States, however, it
should pay the more attenion to other countries, especially
China.
There are some points that I don’t think IKEA should focus
their strengh on America.
First, now America is serious affected by the Subprime
Mortgage Crisis. Its market may shrink in the later years.
What’s more, its market is nearly saturate.
Second, Amercia is one of the coutries which its labor cost is
most expensive in the world. It will increase IKEA’s cost.
Third, if IKEA want to develop itself, it should find another
taget market where he can stretch its body.
Should IKEA expand further in the United
States or focus on other countries?
Contrary to the circustance in America, there are some
advantages to IKEA if it expands its market in China.
Firstly, China is slightly influented by the Subprime Mortgage
Crisis. With the nearly vacuum market, there is a large space
for IKEA to step in.
Secondly, with the low-price labor, IKEA can lower its cost.
Thirdly, Chinese policitis and lows are now being perfected
day by day, and its market or the nation is more and more
opened. All of this give IKEA a good circumstance to expand
its market in China.
According the points that mentioned above, I have a firm belif
that if IKEA concentrate a little more efforts on occupying
Chinese market, it will receive the considerable reward.
Should IKEA expand further in the United States or
focus on other countries?
06级国贸２班第一小组：
陈江：第二题
3106004359
陈照佳：第五题
3106004360
蔡纯：第一题，ppt制作 3206004380
蔡欢然：第四题
3206004381
张振辉：第三题
3106004378
Thank you for watching!!