Individual Situation Analysis and Marketing Objectives Company: IKEA - Assignment Example

Executive Summary IKEA is one of the largest furniture retailers in Australia with its origin from Sweden. To enhance staunch marketing and distributions channels and customer conveniences, it has well upgraded online retail service. The key strengths area brand know globally which catches a large customer group and good quality of the products which is got with less cost and working towards strike balancing between function, design, price and quality. While its weaknesses are in regard to it being global and therefore has a hard time maintaining the standards, quality and the dire need of cheap product which calls for a balance of the same with good quality so that she can differentiate herself from the competitors and finally, the need to maintain communication with all the stakeholders on issues relating to its involvement in environmental activities. For sustainable business, IKEA need to adhere to marketing strategies and implement marketing objectives so that they can be at a competitive advantage compare to the other furniture retailers. They include, market penetration, market development and product development. Table of Contents Executive Summary 1 1.0 Introduction 3 2.0 CURRENT MARKETIUNG SITUATION 3 2.1 The Internal Environment 3 2.1.1Current marketing goals and products 3 2.1.2 Current marketing strategy and performance 4 2.1.3 Customer Environment 4 2.2 External Environment 5 3.0 SWOT analysis. 5 3.1Strengths 5 3.2 Opportunities 5 3.3 Weakness and threats 6 3.3.1Weakness 6 3.3.2Threats 7 4.0 Marketing Objectives 7 5.0 References 8 1.0 Introduction IKEA story began when its founder Ingvar Kamprad was born in southern Sweden in 1926. IKEA is an internationally known furnishing retailer with an online order option and is known to have approximately 9,500 different products (Daniles, 2004, p.6) The ever dynamic technology is acting as the platform of benefits towards increasing the market share, however it faces ranging from Social trends such a reduction of the new buyers in the house market, the issue of market forces whereby many competitors enter cheap household and furniture and economic factors which are attributed to the financial crises/recession which slows down consumer spending and disposable income decreases. This document will describe how marketing will be of great aid to the business in IKEA and how strategic marketing procedures can help boost the market share throughout Australia. The first part will include the market situation analysis. Secondly, the SWOT analysis and Competitive advantage considered. Finally the marketing objectives and how their implementation will be of great help to achieving the objectives of the firm. 2.0 CURRENT MARKETIUNG SITUATION 2.1 The Internal Environment This part is a summary of the current internal environment of IKEA and its Competattors. 2.1.1 Current marketing goals and products Current IKEA marketing meets the demand of customers both low and high income earners and works towards satisfying all the stakeholders (Howell, 2006, p.38). It becomes the leading furniture company in Australia, which is working towards making the live of the customers more satisfying and better. Moreover, IKEA improves on communication more so online and keeping the prices low and the products quality high. The IKEA’s use waste materials for its products; for instance, knotty birch wood which is a waste from other retailers is reused to making Norden tables, while Ogla chairs are made from saw mills and finally Lack tables made from stiff card and wood sheets (Panagiotou, 2003, p.45 2.1.2 Current marketing strategy and performance The company’s website is currently improved to the benefit of the customers. It is made possible for customers to order products online which are faster and easier for the customers. There is a need to improve online marketing and customer care so that the coverage can be big and in the long run increase that market share. There is also a need to communicate to the stakeholders in time and in making sure that everybody is aware of the products which are pocket friendly even in the current financial crises. IKEA has adopted a business to computer strategy which enhances business to directly offer to the market segment and the target market via online distribution methods reducing involvement of other marketing intermediaries. However, in order to penetrate into a wider market share there is a need to incorporate other methods like printouts, newspapers, TV and outdoor adverts so as to reach a wider segment. The company has also put at bay all the other companies when it comes to the quality and price of the products (Kotler & Keller, 2006, p.67). 2.1.3 Customer Environment IKEA aims at people from all walks of life due to their products which can accommodate all people due to their low price and design. It has that all people need furniture in their homes, it is a prime market which have been facilitated by the inclusion of online purchasing option for quicker and effective services. The firm is also supports customers in helping them recycle and reuse used products which in the long run reduce landfill by making products through recycling used products. (Aaker & David, 2005, p. 31). 2.2 External Environment In this segment, IKEA competitors are analyzed as well as PESTEL frame work discussion. The current financial crises have lead to people changing the amount they intend to spend on a particular product which have registered a decrease in expenditures for people in Australia (Slate, Narver & McLachlan, 2004, p. 69). These therefore mean that, many opt for comparing products from many companies and this has given rise to them being offered a wide variety of furniture by competitors. For instance from companies like Wentworth Furniture Group and Fantastic Furniture offer the same products and above all the purchasing decision is on the customer based on the satisfaction he/she deem to get from the product. These companies having originated from Australia use that as an opportunity to get to the market unlike IKEA which is not from Australia. 3.0 SWOT analysis. Opportunities can be used to neutralize threats and therefore use strengths to handle weaknesses (Panagiotou, 2003, p.13). 3.1 Strengths IKEA has diverse strengths including a brand that is known globally which is liked by customer’s not only in Australia but also globally and ever looking forward to improving the lives of many people. Secondly, it has concrete concept that is founded in giving a variety of perfectly made and functional products which are offered at a low price. Thirdly, IKEA has an open way of designing its products which are quality, functional good designs and are low priced. However, even when the products are cheap, the quality is never compromised. Finally, it increases materials that can be renewed (Slater, Narver & McLachlan, 2004, p.81). 3.2 Opportunities After a firm recognizes its strengths, then it is in a better chance go for any opportunity that comes its way (Kotler & Keller, 2006, p.21). IKEA business is environmentally focused and therefore it is of greater advantage even is a very price sensitive market. This is evident in the company’s statement which says that providing solutions for sustainable life at home is the major concern for IKEA. The opportunities include low priced products high demand caused by economic turmoil where by customers are opting for less expensive stores and the growing demand for greener products is yet another opportunity. Furthermore, it’s call for less water usage and lower carbon emissions. With this the firm is focused on giving tips and ideas that raise awareness on solutions that enhance sustainable life at their homes. IKEA encourages reduction of wastes and programs to use less water so as to enhance sustainable use of resources. It also aims at reducing energy use by using renewable energy and reduces on transportation through air and reduce the type of packaging which is all directed at reducing carbon footprint. Supporting charities as a way of developing and supporting social responsibility and encourages building of trust trough good communication with customers, workers and this is being open to all its stakeholders. 3.3 Weakness and threats 3.3.1 Weakness Acknowledging its weaknesses, IKEA can be able to manage them to the advantage of their business (Liu, Lou & Shi, 2003, p.18). Firstly, its weaknesses may include controlling products quality and standards which is hard due to it being in many countries. Secondly, a call for pocket friendly products calls for a balance of the same with good quality so that she can differentiate herself from the competitors. Finally, IKEA need to maintain communication with all the stakeholders in regard to all environmental activities they engage in. She uses, print outs and online publications and also the media (TV and Radio) enhancing communication to wider target audience. 3.3.2 Threats It is easier to fight against threats if the company is aware of their existence to the business advantage (Jaworski & Kohli, Sahay, 2000, p.151). Firstly, threats may arise the decrease in the new buyers in the house market bearing in mind that this is the main market segment for IKEA products this being a social trend. Secondly, more competitors enter low price household and furnishing market due to market force. Thirdly, it requires that, IKEA must concentrate and reinforce its unique qualities to beat the competitors in the market. Finally, Economic factors which are attributed to the financial crises/recession which slows down consumer spending and disposable income decreases. 4.0 Marketing Objectives These are the objectives that need to be implemented; 4.1 Marketing penetration In this case, the main aim is venturing into new markets and making sure that all places have access to products at an affordable price. The kind of products developed by IKEA are good for all from all walks of life, therefore they can be made available in the hyper markets as well as in that small shop in the village. This will ensure saturation of the products is all places and hence improve sales and give competitors at bay (Aaker & David, 2005, p.231). 4.2 Marketing development This involves extending the existing products in new markets as well as making sure that the existing customers are still taken good care of. This will ensure venture into new market segments enlarging the market share (Armstrong & Kotler, 2006, p.16). 4.3 Product development This involves developing new products for existing market and also for the new markets. This will in the long run result to improving the products, improving on the entire products, introduction of new products in the market (Armstrong & Kotler, 2006, p.24). 5.0 References Aaker, D. A. (2005). Strategic Market Management, New York: Wiley & Sons. Armstrong, G., & Kotler, P. (2006). Marketing: an introduction (8th ed). New Jersey:Pearson Education. Daniels, C. (2004) “Create IKEA, Make Millions, Take Bus”, Fortune, 9 (4), 149. Elbanna, S., & Child, J. (2007), Influences on strategic decision effectiveness: development and test of an integral model, Strategic Management Journal, 28, 431-453. Howell, D. (2006) “IKEA ‘Leeds’ The Way”, Chain Store Age, 8(2), 101-102. Jaworski, B,J., Kohli, A.K., & Sahay, A. (2000). Market Driven Versus Driving markets, Journal of the Academic of Marketing Science, 6(2), 45-54. Kotler, P., & Keller, K. (2006). Marketing Management (12th ed). United states of America: Pearson Prentice Hall. Liu, S.S., Lou, X., & Shi.Y, Z. (2003). Market Oriented Organizations in an Emerging Economy: A study of Missing Links. Journal of Business Research, 23, 481-491. Panagiotou, G. (2003), Bringing SWOT into focus, Business Strategy Review, 14(2), 8-10. Slater, S.F., Narver J.C, & McLachlan, D.L. (2004), Responsive and Proactive Market orientation and New Products Success, The Journal of Product Innovation Management. 28, 334-347 Read More