IKEA Prices Contents Contents 2 Overview 3 Question 1 4 Question 2 4 Question 3 6 Reference 7 Overview The assignment shows the different prices of same product in different countries. In this assignment a product of IKEA i.e. IKEA 365 + Gnistra Bread Knife has been taken for comparing the prices among three countries which are Australia, Canada and United States…
If not, in which country is the product cheaper than it is in the United States. In which country is it more expensive? The prices of IKEA products are not identical and vary in different countries after converting the price in USD. For comparing the prices of IKEA 365 + Gnistra Bread Knife, three different countries have been chosen namely Australia, Canada and United States. Among these three countries, USA has the cheapest price which is 12.99 USD. After converting the price in USD, the price of 365 + Gnistra Bread knife of Canada has become 17.4532 USD and in Australia the figure is 18.2721 USD. So, Australia’s cost for this particular product is expensive compared to other two countries (IKEA Systems, 2011). Question 2 What might be the reason for the prices to differ even after conversion to U.S. dollars? Individual product costs differ from one country to another. The conventional reasons for difference in price level are the exchange rates and prices of labor. Wage distribution at mean level has significant negative effect on product prices. The high currency conversion rate of various countries is related with higher prices. The high income generating countries enjoy large productivity advantage (Lipse & Swedenborg, 2007). Trade cost can determine the cost of product. ...
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With the rapid growth and development of China, especially after 1987, the level of economy and the life quality of Chinese people increased dramatically. When they have enough money for food and cloth, they shift their interests in other aspects, such as furnishing, to make their life more colorful.
II. Competitive Advantages IKEA’s success can be summed up by saying it “provides a one-stop sanctuary for coolness” (BusinessWeek). Specifically, IKEA outlets are not just furniture stores, they are gathering spots where families can have a social outing (Normann & Ramirez).
is of franchise type. Contemporary designs and low prices are the hallmarks of which made IKEA a cult brand globally. Environmental sensitiveness of the company is well recognized by the consumers. The other companies that specialize in Nordic furniture design the in the US, whose prices are comparatively very high are Design Within Reach, Minimalista, Boconcept and Tema.
IKEA was one of the pioneers towards globalization by offering furniture that was sold unassembled to its clientele therefore it could be shipped more securely and economically and consequently sold at the lowest possible costs to their customers.
IKEA, from the very start took a different path and was successful in changing this concept. They decided to respond to the needs of the people with regard to home furnishing across the globe. People with different choices, dreams, tastes, needs, aspirations and budgets wanted to modify their home and develop them to make their everyday life better.
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.” (IKEA world website) This plain-speaking, deliberately
They decided to respond to the needs of the people with regard to home furnishing across the globe. People with different choices, dreams, tastes, needs, aspirations and budgets wanted to modify their home and develop them to make their everyday life better. IKEA
According to the report for most businesses, this has been challenging to attain due to the prevailing harsh economic times globally, which have solely contributed to challenging business conditions for businesses in the world today. Every business attempts to adopt business strategy that they deem to be effective and efficient.
The author states that the focus of IKEA has been to offer quality furniture at reduced prices. The company recognizes that many people are looking for quality products at reasonable prices. For this reason, IKEA follows the cost leadership strategy by minimizing the cost of production to attach lower prices to its sofas and armchairs.
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