IKEA Company Market Performance - Essay Example

Insert Case Study of the IKEA Company The IKEA is the leading company in furniture production globally that its profits were rumored to increasing each and every year (Haskel and Wolf). The founder of the business which is known as Ingvar Kamprad is old enough not to run the business, but he steps in not to run it but on how the company is run. Apart from giving advice to his founded company, he is believed to be the richest is his country. The company was found in 1943, and it is based in Sweden. In the initial businesses that the companies run, it started with selling fish, Christmas magazines, and seeds that come from the farm that the family owned. The company not only did such kind of business but also did some transactions that comprised selling matchboxes. The company name is an acronym that has meaning behind it. Most of the name meaning represented the founder’s initial names and the name of the location in the southern Sweden where the business is based (Haskel and Wolf). Each year the company was seen to making significant changes. From adding its furniture to its product line, publishing the first catalog and distribution and this continued until it was offering free delivery of services to its customers. The company from time to time encountered obstacles of milk tucking which eventually changes the route of the enterprise. As a growing firm, its objectives were to provide a stylish and functional design that has a minimal line of manufactured cost through contract suppliers where most people can afford. Another problem faced was the high-cost furniture of promoting this company to sell its products at a lower price so it can have a competitive advantage over other retailers. Passed across the generations, furniture in Sweden was considered a family heirloom, and this is the reason it was expensive (Haskel and Wolf). Despite these challenges, the company had a strategy of manufacturing new design of furniture so that it can reduce transport and warehouse costs and damage. The management and the organization of the company had a proper reflection on the personal philosophy of its founder through article publishing. Through the advice of the business’s founder, the company became mission driven by putting into practice a course and making sure that those working with him adopted it. The company had a trend of keeping culture; this was followed an upheld the through hiring young people who had never worked in any of the companies. In some other countries such as in the UK Company’s growth was reported to be slow (Haskel and Wolf). From opening branches in the foreign countries, the company acquired some valuable lessons that enabled its future expanding. So far the company has identified India to be its largest target market, and it is planning to invest billions of dollars by opening more stores. Basing focus on the concept and the business model of this company, it has a target with middle level global and also looking for prices for the design of their furniture and household items (Haskel and Wolf). The designation of the products is done to reflect on the global line that are vital and that they can be used as the trademark for the firm. Finding the right supplier for each item is a consideration that the company is devoted to winning competitive advantage over it, competitors. To be outstanding in the market, good relationship with the suppliers plays a vital role. Self-provision is an establishment that the IKEA Company has put into practice in the period of half century. Globally, the firm has become the most successful retail establishment in the world. The numerous foreign markets and the lessons that were learned have propelled its expansion from its failures. In the period of 1970s, the company had a competitive advantage over other firms that generated the same product. Market share steered the source of its success that the governance gave the company (Haskel and Wolf). It had nine stores that mainly based on furniture retailing. The fifteen percent share that Sweden government gave the company triggered its expansion. The reason IKEA company expanded rapidly in Europe is that the company had in possession of fifteen stores. Whereby the markets from western European furniture was fragmented costing high retailers that were located alongside downtown stores to sell relatively expensive furniture that were not commonly available for delivery. The stumble that was witnessed in the North America was caused by the perception of the people. The perception was that those who are qualified to purchase these products from the company are those who travel abroad, and they ought to be risk takers (Haskel and Wolf). Another cause was the mentality from consumers that those to buy must be peopling who like excellent food and wine, and they concentrated mainly on the coast. From the failures they encountered, the learned some lessons and they are implanting more tactical means of evading them in the present marketing. To the North America, the characteristics that were put to strategize its missteps was redesigning of the products to fit in the American needs. The choosing of newer and larger stores in the aim of reducing the prices was among the strategies. Towards suppliers, the company had some policies that benefited the consumer. Offering of the high-quality goods, offering home delivery, reducing the price of the products. To meet the levels of the customer, were strategies that any firm struggles to so they may gain more advantage over competitors (Haskel and Wolf). To the IKEA Company laying this procedure has a significant role to it growth and success globally. The customer needs and satisfaction are the priority that this company has to put in the forefront. Currently, the company’s success is based on many sources. The production of high goods to the consumers, customer satisfaction and bringing service closer to the customers is among the sources of success that IKEA Company has based on. In the IKEA Company, there is a significant weakness (Haskel and Wolf). The custom of keeping their tradition by employing young individuals that do not pose any experiences works contrary to the success of the firm. The solution for this is to hire people with experience who have worked with other enterprises. Work Cited Haskel, Jonathan, and Holger C Wolf. The Law of One Price -- A Case Study. Cambridge, MA: National Bureau of Economic Research, 2001. Print. Read More