Due March 2nd 9 page Assignment

Description of the Company

The company to be used for this report is IKEA, a multinational organization that has fought tirelessly to ensure it remains relevant from a global perspective. The company’s name is an acronym whereby the I and K stand for the name of the founder who is Ingvar Kamprad. The E stands for Elmtaryd, which was the farm in which the founder grew up in. A represents Agunnaryd, which was the hometown of the founder in southern Sweden. IKEA was first established in Sweden, but with time it has become a Dutch-based company with its headquarters located in the Netherlands. Since 2008, IKEA has become the largest furniture producer in the entire world and has been able to use various strategies within its marketing sector to ensure it remains to be the best worldwide. The company has diversified the types of furniture it produces, and with great and attractive designs they have been able to appeal not only to the local markets but also to the international customers. Currently, the company operates in 49 countries, with 411 stores globally while selling goods worth billions each year.

The core products the company offers

IKEA, as stated in the above description, deals in a variety of furniture and home decor. Most of this furniture is made to be shipped in flat pack boxes, and the customer assembles the furniture into the final product once it is purchased. The company does this due to transportation issues as it becomes difficult to transport an already assembled piece of furniture. In some cases, the products can arrive damaged. The main pieces of furniture in which the company produces include upholstered furniture, bookshelves, media storage, coffee tables and rattan furniture. The company also produces beds, hall furniture, dining tables, wardrobes, bookcase ranges, chairs, desks, carpets, fabrics, garden furniture, kitchen furniture and lighting furniture are also part of the core products in which the company produces (Lau & Igarashi, 2011).

Brief History

IKEA was founded in 1943 by the late Ingvar Kamprad who remained until his death to be the owner of the company. The company began as a mail-order sales business. Five years into this business, the company experienced a breakthrough, and this was when Ingvar Kamprad started his furniture business. In 1958, IKEA opened its first store in Sweden; five years later, two more stores outside Sweden were established. These stores were in Denmark and Norway. During the 1970s, IKEA expanded most of its stores within Europe. With time, the company has opened more stores in North and Latin America and in Australia. In the Middle East, just recently in 2013, the company opened its store in Qatar. IKEA has continued to open more stores globally as it seeks to establish more global dominance.

Key current competitors

Every firm must have some certain level of competition. It is, however, very fortunate for IKEA from the fact that they do not have a real competition especially from the global perspective. As seen from the description, IKEA is a worldwide company that operates in different countries globally. As for now, there isn’t any firm that has been established to deal exclusively in furniture and serve the global market. Competition for IKEA has thus been left in the hands of small local firms in different countries which produce pieces of furniture to the local people. Some of the competitors, however, identified include Ashley Furniture Home Stores, Bob’s discount furniture, Argos, and John Lewis.

SWOT analysis

The strengths of IKEA have been known to have deep customer knowledge. Secondly, the company uses innovation constantly to drive costs low as possible. Supply chain integration, brand reputation, and product diversification are other strengths of IKEA. The weaknesses of the company are the negative publicity, decreasing quality and their products have been termed as being standard. The company has the opportunity to expand to developing nations in Asia and Africa. There is increasing rates of online sales. With respect to threats, competition remains to be a threat as long as an entrepreneur finds this business to be attractive. If IKEA does not take caution, then, in the future, competition may intensify. The growth of average consumer income may result into customer loss in the future as consumers will always want to purchase products of higher prices when their incomes increase.

Product or service line to develop a marketing plan for

An Innovative idea can be that a customer can hire IKEA helpers to help load their products into the car. The worst part of going to IKEA is finding a parking spot in front of the loading dock to load your items in your vehicle. IKEA designed the loading deck with metal bars so you cannot take your baskets to the parking lot. The IKEA helper service can be offered as a small fee if customers wish to hire helpers for their items. IKEA would open up drive-through type lines where items can be loaded quickly by the IKEA helper staff, and the customer doesn't have to worry about getting hit or hitting someone in the parking lot.

Reference

Lau, M., & Igarashi, T. (2011). Converting 3D furniture models to fabricatable parts and connectors. In ACM Transactions on Graphics (TOG) (Vol. 30, No. 4, p. 85). ACM.