History,development and Growth

History,development and growth:

Ikea is one of the world's most successful golbal retailers which was established by Ingvar Kamprad in Sweden in 1943.He published his first catalog in 1949 and with business growing rapidly,he hired a designer to start designing more furniture,meanwhile in 1950s,flat packaging was introduced which had great success in reducing cost and this self-assembly was integrated to the Ikea concept in 1956.Later, the first store was located at Almhult and Ikea-designed furniture manufacturer was found in poland,at that time,a self-service pick-up solution was put into practice and soon became the company norm .Ikea continue expanding outside scandinavia in western europe like Switzerland in 1970s and followed by UK,North America in 1980s,but things were not going well in America,Ikea had to make decisive actions and redesigned many products to be more integrated in local cultures and customs,after learned vital lessons Ikea continued to expand to asia countries and entered China in 1998.In total,by 2008,there were 285 Ikea stores in 36 countries and Sales €21.2billion.Ikea vision is to create a better everyday life for the many people and the target market is young.

SWOT:

Strengths for Ikea which apparent is that the very profitable with high revenue company had established reputation for low cost and high quality around the world;It has a friendly atmosphere with comfortable facilities like restaurant and daycare center.Another is Ikea has strong global sourcing capabilities and offers the prospect of forging a long-term,high-volume business relationship with their manufacturers which can gain a win-win result.

Weaknesses can be seen that the swedish-style maybe not suitable to American and asia markets,as well as with relatively few locations,Ikea would like to enter non-western markets which there would be some obstacles.

Opportunities like Ikea still can expand into many other regions,continue focus on young people with low cost and increase online sales and display.

Threats from other competitors like Wal-mart,etc who will also provide low cost and high quality furnitures,Ikea have to find the unique advantages and improve quality to compete with them.

Factors and strategies that contribute to Ikea's success:

Cost leader strategy:Ikea has a product strategy council,once a priority is established,product developers survey the competition and then set a price point that is 30% to 50% below that of rivals,which can be a competitive advantage for Ikea.

Flexible production design and differentiated promotion strategy:Ikea designs own furniture and different styles for customers to choose,the flat packaging model makes it easier to consumers to transport the furniture.After finding the difficulties of entering non-western markets,Ikea