IKEA Competition and SWOT Analysis

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IKEA's Eyesight -

"To generate a better everyday living for the many people"

IKEA Business Idea

"We will offer a variety of well-designed, useful home furnishing products at prices so low that as many folks as possible will be able to find the money for them. "

IKEA group is one of the top furniture retailers on earth. Using its unique combo of form, function and affordability, IKEA distinguished itself from other furniture suppliers. Using its success in US, Europe, IKEA got into the Gulf market with the hope of continuing its success. Even though it was not very successful primarily, it upgraded through its general market trends and advertisements. Nowadays, IKEA captured major market show in the Gulf market as well as the trustworthiness of being the fastest-growing furniture store in the Gulf.

This report targets our rival Home Centre that they want to make gains and gain market show and what IKEA Dubai is doing to conquer their space. Looking at different factors that have become issues to be solved for IKEA. Some inner issues needs like POS terminals and security of money must be the aim to attain.

Competitor Analysis

These analyses are essentially done to comprehend your competition which gives you an advantage. It helps you in giving you an indication of these former, present and future strategies. It helps you to clarify your own competitive advantage and it helps you develop ways of outmaneuver them

Identifying IKEA's competitors and understanding them would help IKEA a great deal in their strategies. Home Centre is one of the competitors but taking a look at the past sales and earnings figures IKEA has done much better than Home Centre. Home Centre has been very daring in their marketing strategies. Their marketing promotions and advertising has been one of their talents but IKEA on the other palm has different activities taking place in the store. For example last month that they had Lighting Activity which month they have got Dining Activity which means they introduce services in these lines and display them in the most best and proper places where most customers can see and purchase them.

As per home centre they are pushing customers towards them by their new advertising of giving out gift vouchers over a purchase of 200Dhs. This has been some kind of successful. IKEA has its sight on them and keep an eye on their every single move and even them. IKEA has a large Marketing team which comes up with a whole lot of alternatives and ideas nonetheless they still face conclusion from home centre. Just what exactly they does after home centre's campaign they sent out 200, 000 coupons around Dubai for free for people to fill up and come to IKEA Dubai or Abu Dhabi stores and drop it in raffle boxes. The reward is 5 winners will be earning 2000Dhs of IKEA products each with their choice. The draw is still anticipated on April 18th 2010.

Other rival for IKEA is Skillet Emirates and many other furniture shops in Dubai.

Market Analysis

Market examination are essentially done to determine the market and its attractiveness because it's related to the companies strengths and weaknesses

Market size can be evaluated with the present sales of the company compared with the past sales or growth of certain range of products. Market size and progress for IKEA has increased as comes even close to this past year where IKEA Dubai was afflicted with recession rather than much earnings were made. But in according to now in March 2010 they may have achieved what that they had budgeted.

Figures show that according to march 2010 there's been a growth in total sales by 7. 3% generating sales in the month of March to 42MillionDHS. It shows how much total sales were created by furniture items and market-hall items. The marketplace has grown this year as the recession has truly gone down. The target customers are upper and middle income young families. The sales is continuing to grow not just because of IKEA's furniture and market-hall items but because of their excellent customer's restaurant and leave caf also.

Distribution programs - the products come shipped from Sweden to gulf region where they can be received at the ports and then used in their warehouse in Rashidiya -Dubai. After that the merchandise come to stock in IKEA and then they are sold right to customers. Their purpose is to lessen syndication costs, reduced developing costs and advertising costs. How can this be achieved, Through a rational product range development and by adapting product design to creation conditions, By having a rational distribution idea in combo with a caring meeting with the many people and by way of a strict cost-consciousness in all areas.

The IKEA theory aims to make the distance between your supplier and the customer as short as it can be by combining the possibilities of the distributor with the needs of the client.

Key success factors and proper strength for IKEA here are lowering circulation costs by producing products in even packaging, affordable distribution system, immediate deliveries, and transit deliveries with minimum handling.

Environmental Analysis

Macro level

At this level environmentally friendly factors IKEA is facing is technical and product creativity. They need to come up with new ways of producing their furniture goods that they say are at lesser price at exactly the same time are not that strong. At customer support IKEA Dubai they receive a lot of comes back of broken goods or low quality products which after some weeks break or get damaged quickly. The expensive products like mattresses and sofas they all have guarantees to them they get replaced however, not these small goods that get broken so easily. They have to think of something new to improve their production of certain products like lack coffee tables and TV benches.

The most important of them at the moment are the economical factor, career and culture factors. These are meant to change a lot in approaching years.

Micro level

IKEA already has Home Centre as their primary competition and IKEA is doing better than them as IKEA has a greater market share. Hazards of substitutes and new entrants are always there and there are many furniture outlets and stores in Karama, Satwa, Deira that sell furniture and mattresses at lesser price. Homes R Us is also one replacement which has already entered the market many years earlier. They sell all the merchandise that a person needs at home. IKEA has more than 7200 products which is a plus point.

Customer Analysis

Consumer patterns changes a great deal with their life-style and standard of living. Once their needs change they change their choices, buying behavior and buying power. An vision needs to be continued our customers to check on what other options they have got once their habit is changes.

Customers are split into different segments like different demographics or physical location. IKEA has customers from top class and lower school but from all nationalities. Each has their own buying power and patterns.

Internal Analysis

Physical sources of IKEA like machines which are being used to complete the stock in do it yourself serve and full serve areas are inspected and recharged daily. The machines, building and creation capacity are all well preserved to endure in retail business. They need to improve on POS terminal at exchange and returns where there were circumstances of money laundering. Employees have taken money and trapped after many days. So these things have to be taken care of from the management and fund department. This causes decrease in gains.

IKEA Dubai has more than 300 employees from different nationalities and regularly they receive trained in their training centre. Expert professors and managers provide them with training to increase employee knowledge of products and increase skills at their work.

SWOT Analysis

(S)trengths

IKEA has taken care of a long-term partnerships with its suppliers. This ensures they may have high quality products and materials at an acceptable price.
IKEA's catalogue the next most read publication after The Holy Quran on earth. The best marketing strategy they have for quite some time.
Home planning and contract sales services
Their customer support at IKEA Dubai has been the best so far. Even people from Sweden came to visit IKEA Dubai and they were stunned to see our customer service on our peak days. Customer service includes Providers, Information Desk, Play rooms for kids, Exchange and Returns, Goods Pick-up and Home delivery services which likewise incorporate assembly services.

(W)eaknesses

IKEA is a global company, so product standards may be difficult to maintain.
Production faults diminishes product quality.

(O)pportunities

IKEA can further capitalize on the "green" motion and IKEA's customers' desire to have less of a direct effect on the surroundings.
IKEA's new store in Abu Dhabi is a great chance to cater an alternative segment of individuals.

(T)hreats

The regulatory conditions across the globe vary and make a difference how IKEA does business and their product costs, especially the utilization of natural resources.
Competitors like Home Centre and Skillet Emirates generate a great deal of offers and sales in their stores; Whereas IKEA has store sales only in June and July.
Key issues IKEA encounters are internally like development fault or low quality products. Have to reduce faulty products or totally stop offering them because of complain form customers. They need Improvements in the POS terminals, minimizing accepting open plans and sales mistakes.

BIBLIOGRAPHY

http://www. ikeadubai. com/

http://www. netmba. com/marketing/market/analysis/

http://www. homecentre. net/index. php?_a=corporate

http://www. productmanagementtraining. com/product-management-training-day1. htm

http://www. ehow. com/facts_5278469_ikea-swot-analysis. html

CONTEMPORORY MARKETING STRATEGIES

MARKETING PLAN Stage 2

Executive Summary

Aim of the report is to comprehend IKEA's idea more thoroughly and maintain /increase the current market share. It really is one the targets of this are accountable to increase sales and quality of production of certain products in which they receive a great deal of complain. Improve POS terminals by putting in new software and which makes it a lot more secure. Making the most use of the June and July sales to increase sales to 10% in comparison to 7. 3% in March.

The methods and suggestions I've chosen to increase market show is to add IKEA Family within Dubai as well. This can let us increase our customer bottom part and target new segments. The sales will can also increase and we will have new participants who will reap the benefits of our exclusive services and services. IKEA family has its products which will be earned from Sweden for the users. Sales to be risen to 10% we must improve our products in June and July. The new range of products will be earned from Sweden which new IKEA family will be promoted all over IKEA stores in Dubai and Abu Dhabi and our websites. We can create this anytime in this year.

Marketing Objectives

To maintain the current market share
To boost the current increase in sales from 7. 3% to 10% by July 2010
To improve POS terminals and safety
To improve quality of certain products if not discontinue them and bring in services which are available well in Sweden or in other stores of IKEA on earth.

Targeting and Positioning

IKEA has usually targeted homeowners but as the housing marketplace weakens the IKEA is certainly going after a fresh group of potential buyers to grow future sales: Small enterprises and new young families stepping into the gulf market

In days gone by a year, IKEA has began creating interior designs and products for business owners and these families such as kitchen designs and deal sales for small business owners. In April the company is also expected to launch a fresh website, ikeabusiness. com, where small enterprises can discover new ideas for designing their offices and promote them with other internet marketers. Young families can design their kitchens at IKEA Home planning service where once they design their kitchen they have to pay 500Dhs kitchen charges which is refundable after the customer buys your kitchen.

It will be a fascinating development to view, because their targeting strategy is variety in buyer's choices and they are meeting it by providing more than 7200 products with the best of customer services. Many small business owners are price mindful and would welcome IKEA's products as an economic alternative to other suppliers. Furthermore, despite not having a solid existing collection of business furniture and accessories, entrepreneurs are already going to the stores to buy chairs, tables, storage alternatives, and other products. Wide range of products helps them improve sales

Differentiated marketing is their strategy. They have got different marketing blend ideas for different sections. Now they should have a new aim for section in this which is the disabled people. They do have this in IKEA UK and other stores on earth. They have to start this in IKEA Dubai as well. It's called IKEA Family. You will need to become a member of this family and then avail different benefits like savings on certain IKEA Family products. Offers on the foods and free IKEA newspapers. This will let them aim for a new segment and increase sales and customer move in their store. It'll build a psychological romantic relationship with these special family.

Marketing positioning affirmation: "We do our part, one does yours. Collectively we cut costs. " This lines is comes from IKEA Sweden where it began first. Their toned packed products are easy to take home and assemble by the clients because they provide all the instructions and fittings inside the container. When there is any issue in set up we can always take action for them by showing our assemblage services. Quality services will usually get customers for the store. Our exchange and refund insurance plan of exchanging and refunding the money back to the client within 30days is not adopted anywhere. Not even In our competitors Home Centre's store. We refund the money to customers because "It's okay to change your brain". This is what it says at the 22 check outs we proceed through and at the client service division.

Growth Strategies

Generic strategies like charged based, IKEA has prices of the products which are affordable that is why they are making profits and has a good market chare. But out objective is to increase the sales percentage from 7. 3 to 10% by July. This may only be done if they differentiate and highlight their services more than their rivals. Home Centre has opened a new store at Mirdiff City Centre which includes not afflicted IKEA in any way till now. IKEA can increase their sales if they bring in the service they provide in IKEA UK that is IKEA Familk and with it its new products. IKEA Family has its products with fewer prices. Quite a few upper class section customers would wish to avail these benefits because they are IKEA's regular customers. 70% of the purchasers are women and they would want to enroll in this Family. This might lead to different guidelines and IKEA will penetrate into a fresh market.

Product development is another different for IKEA to grow and change perception of the certain consumers. Certain IKEA products aren't reliable for long or get damaged very quickly. They need to look directly into their production section in Sweden and produce products like Lack espresso tables and Television benches much stronger. They are able to either discontinues these things and bring in new stock from Sweden because not all the products can be purchased here in IKEA Dubai. Expedit E book shelves comes in flat pack containers and they are delivered from Sweden so when customers buy them from here, after they open up it some parts are either absent or damaged. So the quality of production has to improve form IKEA Sweden or they need to double check it after they reach in their Rashidiya warehouse in Dubai. Customers complain about the hassle of shopping for and then knowing its broken or some parts or fittings are absent and returning to replace at exchange and dividends counters.

Other alternatives for them to improve are to upgrade or have new POS terminals with much security. They have to increase the systems and traind the staff with the new changes made. There were conditions where co-workers have been stealing money from their tills. If we have a secure and improved system this won't happen again.

Joint development - IKEA in gulf is extending and opening a fresh store in Abu Dhabi UAE.

"Today's Ikea store in Marina Mall, which is constantly on the serve thousands of our Abu Dhabi customers, will be relocated to Yas Island where it will be changed into a full-fledged notion store, " he added. Under the agreement, Aldar provides the composition for the Ikea store under a renewable, 10-year lease agreement with Al-Futtaim

The Ikea store on Yas Island will have a total floor area of 32, 000 square metres and a sales portion of 19, 150 square metres.

It will have a restaurant of 2, 100 square metres with a seating capacity of 550, as well as 1, 500 auto parking places. Franicevic said the Yas Island store provides a solid impetus for the Swedish furniture and Fixtures Company to motivate ahead with programs to expand in the region.

"We expect to serve practically 1. 3 million visitors in the first season of operations, " said James McGowan, Ikea director for Abu Dhabi. [Himendra Mohan Kumar, Al Nisr Publishing LLC 2009]

Selection of Competitive Advantage

IKEA has a competitive gain over its competition and has suffered it for some time. This benefit can mainly be attributed to its resources and features namely human resources, brand and IKEA notion.

Ingvar Kamprad the creator of IKEA though retired is still a cheerleader for the procedures/concepts that define IKEA culture. Chopping prices is one of the competitive advantages IKEA has over its opponents which is another note that results in noisy and clear among IKEA businesses. IKEA aims to lower prices across its whole offering by typically 2 percent to 3 percent every year.

Targeting middle class customers who shares buying behaviors and providing similar shopping experience the world over has made IKEA a distinctive shopping experience. A lot more than 7200 products ranging from kitchen cupboards to candles and textiles; making store visit more of an outing when compared to a chore; seducing the clients with one touch after another within the shop; offering other services like restaurant, kids area and so on; flat-packed practically all big what to save shipping and delivery cost and invite purchasers to haul their own products and so many more, makes IKEA idea of its kind and since a results supercharge its image (brand).

These resources are valuable (enables the organization to respond to environmental hazards and opportunities) but each alone is not rare and hard to imitate. IKEA's potential to incorporate these resources in the way it did (creating IKEA world), makes the complete experience exceptional and non-imitable. As a result IKEA enjoys and support a competitive edge over its competition. [Jay Barney's platform on Gaining and Sustaining Competitive Benefits, 2006]

Marketing Combine Programme

Price

IKEA's strategy is dependant on cost command. Across markets where it includes current occurrence, products are sold at low prices. Prices are 20 to 30% lower than fighting products. Price varies only in due to fluctuations in trade rates. This rates enables IKEA to get significant market share. Low prices are due to large-quantity purchasing, low-cost logistics, store location in suburban areas and a Do it yourself approach to marketing.

IKEA also benefits from economies of size and healthy supplier-firm interactions. IKEA enters into long-term deals, provides leased equipment and tech support team in exchange for exclusive, low-cost manufacturing from suppliers. For new markets, IKEA should maintain its price-image to maintain the brand's placement.

Product

IKEA's value string is unique in that customers are also suppliers and suppliers are also customers. The deals between the dealer and IKEA and to the customer have a value adding step in each stage.

Product differentiation is accessible in the value-added aspect. IKEA's consumers know the idea of IKEA of Do-it-yourself with the majority of its products demanding assemblage after purchase. But although assistance in this aspect is limited, IKEA offers customer support and home delivery services which includes transporting and assembling furniture.

While this is well accepted in areas where IKEA now works, it may be a point of awareness when getting into new marketplaces. Should IKEA come across market where DIY is not preferred, IKEA may include the expense of the service to the product's price. It does face such market where they face customers in Dubai who can't stand picking products from personal serve area. They just supply the list to sales person n inform them to bring the products which is not the idea of IKEA but nonetheless sometimes we must do this for the clients to keepo them satisfied with the service we provide.

Position/Place

IKEA store is located in Dubai Shopping Celebration. Which is a good location one of the center East's largest blended use real estate projects, that covers over 1, 200 acres. Get spread around over 25, 400 square meters This is one factor in the achievements of IKEA's low costs. While it may appear as a disadvantage, this matches IKEA's marketplace of customers willing to move their own purchases and requiring less assistance in assembly.

Promotion

IKEA's promotion is devoted to the IKEA catalogue which they launch every September of the year. There catalogue of 2010 has been distributed all over the world in millions. This is their finest marketing and promotional strategy. This catalogue is reported to be the next most read e book after The Holy Quran. It offers all the various selection of products but not all.

Secondly advertising is performed on a monthly basis in papers like Gulf Information and Al Arabia media papers whenever they have a new activity happening in the store for example they have got dining activity presently happening so they may have printed out 2 different offers in these papers with different products and prices. They even advertise on radio 101. 6 and one Arabic radio route.

Proposed strategic choices will improve sales and market talk about by bringing new products and bringing out IKEA Family in Dubai. This increase their market show in Dubai because study implies that IKEA customers want something more from IKEA and disabled people can benefit from IKEA Family with special discounts and services.

Bibliography