Task 2 E-commerce: IKEA
A Swedish furniture retailer IKEA was found in 1943 and is one of major international companies nowadays. It provides the customers with flat-packed furniture, that can be assembled at home without problems. IKEA’s policy combines low prices with high quality of production.
The aim of the company is to guarantee better life for those people who are not able to afford more expensive things. The stores provide a variety of affordable furniture, so that everyone might find what he/she really needs in the shop. According to the official IKEA website in the United States, the company;s business objective is the following: “At IKEA our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”.
Political factors that are related to IKEA are quite interesting to analize. Strict law obedience which is characteristic to the company’s policy, caused multiple problems for the business development in Russia. For example, IKEA’s founger Ingvar Kamprad said that the company would not invest into the Russian market anymore because of numerous bribes. According to him, IKEA was not going to encourage further corruption. There was a number of cases that IKEA’s bord of directors made public in local press. One of such ceses was the issue when the officials from one sounthern Russian city Samara did not allow the company to open a store, because it was not sturdy enough for a hurricane. Even though such winds never occur in central part of Russia, the local government prevented IKEA from opening the department (Kramer, 2009). In general, the company usually does not rival with the local governments, but sometimes problems occur.
Economical growth of IKEA is stable and its production is popular worldwide for low affordaable costs and simple universal design. There are also numerous cafees and restauants in the buildings where IKEA stores are located. They serve national Swedish food, which is one of the characteristics of the company and a part of successful marketing strategy. Reuters write that in the last fiscal year 2012/13 the market shares of IKEA increased by 3.1 percent. Even though the company had certain ideological problems with Russian government, the most significant growth of its sales was in Russia and in China. The US market is not progressing in last years (Pollard, 2013).
Social factors are very import in the business policy of IKEA. The company pays much attention to the advertising campaign, adjusting it to the realias of the country where the target audience lives. For example, in Chinese advertisements they are using the models who are Chinese, so that the message will be closer to people.
The company also uses modern technologies actively. It is evident that the furniture IKEA produces is of hight quality and is produced according to the newest standards. There is another issue to be mentioned, which is social media integration of business. Business nowadays “goes online” and using Facebook, Twitter and online stores is crucial in promoting the production. IKEA provides the customers with all ways of payment and understandable ordering forms.
All these issues relate to the aims the stakeholders of the company have. They successfully sell high quality furniture on affordable prices.
Ikea. Retrieved from http://www.ikea.com/us/en/
Kramer, A. (2009). Ikea Plans to Halt Investment in Russia. The New York Times. Retrieved from http://www.nytimes.com/2009/06/24/business/global/24ruble.html
Pollard, N. and Nordenstam, S. (2013). IKEA sales grow 3.1 percent in fiscal year 2012/13. Reuters. Retrieved from http://uk.reuters.com/article/2013/10/14/uk-ikea-sales-idUKBRE99D03720131014