IKEA International Marketing - Case Study Example

Those that can are part of an elite group that set a precedent for other retailers to follow. IKEA is one of those leaders. In less than forty years, IKEA has become a globally successful, multibilliondollar business, with stores on six continents and a very large customer following. Competitors constantly strive to imitate IKEA, but this company's secret to success is not easily duplicated. In Sweden in the 1940s, Ingvar Kamprad ran a small delivery business from his home using the local milk van.

Needing a name for his business, he combined the initials of his name along with those of his family farm, "Elmtaryd," and the name of his village "Agunnaryd," to form IKEA (Appelbaum 1990). When the delivery service failed, Kamprad transferred his knowledge to mail order and soon discovered an untapped niche: furniture. By 1953 the first warehouse showroom of cataloged goods was opened. Soon to follow were stores in Norway and Denmark. Today Kamprad can boast of ninety-six stores in twenty-four countries, including the United States, France, Poland, Germany, Czechoslovakia, Australia, Hong Kong, Hungary, and Saudi Arabia.

The Swedish company is now the largest furniture retailer in the world. In total, these stores cover 14 million square feet and in 1990 had global sales exceeding $3.4 billion and served close to 90 million customers (Chandler 1990). What was Kamprad's formula for success "IKEA shall offer a wide range of home furnishing items of good design and function, at prices so low that the majority of people can afford to buy them" (IKEA Home Page 2008). A simple formula it is, but one that has resulted in huge success ("IKEA in 2005", 2005).

Current Business Structure Around the globe, IKEA stores are similarly designed in a Swedish style-blue and gold (Sweden's national colors), with the flag of Sweden waving proudly at the front. The stores are huge (100,000-250,000 ft), warehouses led with wide aisles for easy navigation. Products consist of assemble-it yourself furniture such as tables, bookcases, and shelves, and also china, plants, linens, wallpaper, flooring, carpets, beds, lighting, and cabinets, all at rock-bottom prices (IKEA Home Page 2008; Trachtenberg 1991).

All stores are attractively merchandised with up to one hundred settings of fully decorated rooms. Store traffic patterns are designed so that the customer passes through all departments to pick up the knock-down merchandise and proceed to the checkout counter. Very little space is wasted ("IKEA in 2005", 2005). MARKETING STRATEGIESIKEA was founded as a mail order