Ikea: Global Marketing - Case Study Example

"Kamprad's humble beginnings (he was the son of a farmer) had created a unique IKEA culture that was founded on respect for money and an innovative mindset" (BII, 2006). Kamprad himself used his monetary assets frugally for even business purposes. His down to earth "attitude trickled down to the co-workers, who would ensure minimal wastage and cost-cutting at every level and as a result, IKEA came up with products that were aesthetically designed and were still available at affordable prices" (BII, 2006).

IKEA has always created well-designed and functional home products for people at low discounted prices. Yet this is not the only reason why people want to buy products from IKEA. The company's definition of Corporate Social Responsibility is very strong and it is built in every store around the world. They promote environment-friendly products and supplies, have a green transport plan, and use waste-to-energy technology. IKEA's 'IWAY' for minimum requirements for social, working, and environmental conditions point to the fact that green business is indeed a smart business.

(Webb, 2007) (Brosi, Gabel, Buitt, & Stults, 2006)IKEA has done well to build strategic alliances and franchises for expansion purposes. Their marketing strategies illustrate how they have built a global brand by localization in each specific market and by offering a unique shopping experience to its customers. Diversification from a well-established and maturing market of home furnishing into the food business has also helped IKEA to increase its product mix and cater to a wider customer base thus increasing the brand's awareness and promoting it at the same time.

(Fortune Magazine, 2006)Market Entry Strategy in North AmericaIKEA first started its operations in the United States in 1985 with its first store in Pennsylvania. According to the IKEA North America president, Pernille Spiers-Lopez, the demand for home furnishing is such that everybody needs it no matter even if a person is a hermit. Their expansion strategy in the United States is based on identifying areas of market expansion, establishing stores based on secured market expansion and penetration keeping the underlying IKEA concept in mind.

(Brosi, Gabel, Buitt, & Stults, 2006)IKEA offers specialty home furnishing self-assembly goods to people at low costs. Based on the demand and competition, IKEA entered the market carrying its good brand name and discounted solutions. With their gigantic sized showrooms, kids' area, and model houses IKEA has taken a firm lead in home furnishing.In the U.S., IKEA has expanded its operations in a way that supports its vision and business models to offer home furnishings at low prices. They evaluate markets and cluster those areas where they can achieve economies of scale by efficiently streamlining and managing their distribution services, recruitment initiatives, training and development, and marketing efforts.

With stores on the east and west coasts of the U.S., IKEA is now emphasizing building on in existing markets with a gradual entry into other major metropolitan areas so that they can cover up the continent to reap economies of scale and hopefully sustain their low-cost solutions. (Roth, 2004)Works Cited