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ikea report

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Introduction

Foundations of Marketing Report title: The Company Project Tutorial Time: Tuesday (1-2pm) Course: Bsc Business and Management Studies No of words in this assignment: 2162 Contents * Executive summary....................................................................... 3 * Introduction.............................................................................4 * The Company...........................................................................4 * Sales and Profit Trends...............................................................4 * The Market Environment........................................................4&5 * The Five Forces Model................................................................5 * Competitive Environment............................................................6 * Porter's Generic Strategies Model.................................................6 * The Competition..................................................................6&7 * Target Market.........................................................................7 * PEST-G Analysis.......................................................................7 * Swot Analysis..........................................................................8 * Marketing Strategy...............................................................8&9 * Growth Strategy........................................................................9 * The Marketing Mix ...................................................................9 * Evaluation Of The Company's Strategies..................................9&10 * Conclusion..............................................................................10 * Appendix........................................................................11&12 * References..............................................................................13 Executive Summary A company's marketing strategy and competitive strategy is important to make sure that your products are marketed correctly, not only for profit maximisation but also to create awareness of your brand name. An effective marketing or competitive strategy makes sure that you are always one step ahead of your competitors. You may be achieving maximum sales at the current moment but an effective strategy would look in to the long-term and plan for the future so that the success is not short lived. IKEA the Swedish furniture retailer has global brand recognition and enjoys great success all over the world as the low cost producer of stylish and functional furniture products. This report highlights IKEA's marketing strategy and how they place themselves against its competitors in order to gain market share and achieve overall success. IKEA's main aim is to be the low cost producer in the market it operates in and therefore has introduced innovative and cost efficient methods of manufacturing products. Components for products are bought from around the world and wastage of raw materials is seen as another invention to make another product. These cost conscious methods are employed at every stage in the production, manufacturing and distribution process so that the products that reach the customer are affordable for as many people as possible. "Your partner in better living. ...read more.

Middle

Economical factors * The interest rates are low but the rise in inflation may means that interest rates may increase and this will affect IKEA as they are planning to invest through opening up new stores this therefore means borrowing is going to much more expensive * IKEA locates on out skirts of towns and thus employment rates around the area must be taken in to account. Employment levels for different countries they are wishing to trade with must also be taken in to account. It is an unwise decision to build IKEA stores where unemployment levels are low as you will to need to offer higher wages to poach workers. * The exchange rate will also affect IKEA as they are importing or exporting goods with the international market. * The GDP level is an important factor as it will show prosperous and poor areas and therefore products will have to marketed according to people's abilities Socio- Cultural factors * These factors will vary from country to country depending on the dominant religion, attitudes on foreign products, the population demographics and the roles of men and women * For example in the UK we have a multi-cultured society this will affect IKEA in the way the products are promoted, the people they recruit and products being offered must meet the needs of the different user. * The increase in lone parent families means that the IKEA shopping experience has to incorporate procedures which are child friendly, for example playrooms for children's and products directly aimed at young children * The increase in the older generation has affected IKEA and this can be seen in the products they offer as new ranges of products are aimed directly at that target market. Technological factors * Technology is an important factor as more research and development is taking place. They need to find new and innovative ways of producing goods quickly and cheaply. ...read more.

Conclusion

* IKEA is not just furniture store there other facilities like the restaurant, coffee bar and children play area. * IKEA is environmentally responsible as they recycle products and follow environmental projects thus giving them an advantage over its competitors. Weaknesses * IKEA is a well known across the globe as the cheap producer. However its British competitors like Argos produce similar products at a cheaper price which could result in Argos poaching the customers off IKEA. For example in china the prices are considered expensive compared in Britain. * IKEA sell products across many sectors such as food, stationary and furniture, it may not have the flexibility of some of its more focused competitors. * The company is global, but has a presence in relatively few countries Worldwide. Opportunities * To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets * The stores are currently only trade in a relatively small number of countries. Therefore there are great opportunities for future business in expanding consumer markets, such as India. * New locations and store types offer IKEA opportunities to exploit market development. They can move from large out of town stores, to local and shopping centre based stores. * Opportunities exist for IKEA to continue with its current strategy of opening new more stores and focusing on cheap prices, high quality and quick and efficient handling of goods * They could introduce internet buying which would mean that you're offering a service for those customers who prefer to shop online. Threats * Being number one means that you are the target of competition, locally and globally and this has happened as John Lewis has over taken IKEA. * Being a global retailer means that you are exposed to political problems in the countries that you operate in and are susceptible to media coverage. * Due more innovative and efficient technologies has meant that manufacturing costs are low for both IKEA and its competitive which could results in price wars on certain items. ...read more.

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