Price Ikea Offers Prices example essay topic
310 words
The basic business strategy of IKEA is! SS To offer 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!" . The following point is to describe how IKEA has adapted its marketing strategy to take advantage of globalization and further develop their competitive advantage. Focus your discussion on raw material, product, price, distribution, promotion, and service.
Raw material- - Competitive advantage in design and organization - No competitive advantage in the production of raw materials -Use organizational skills to develop lowest cost suppliers of raw and semi finished goods from all over the world - by constantly working with suppliers and value added facilities Ikea streamlines transactions, increases efficiency and as a result get the cheapest price. Product- All products are designed in Sweden. - Because IKEA has a competitive advantage in design, all design is done at IKEA Sweden. After they are designed, the product, or even parts of the products, are contracted out to the cheapest producer. - IKEA further reduces overhead through a standardized product strategy with an identical assortment around the world. Price- Ikea offers prices that are 30 to 50 percent lower than fully assembled competing products. -large quantity purchasing - low cost logistics -low cost, suburban store locations - and DIY marketing Distribution- - IKEA has built its own distribution networks.
Buying centers"^3 warehouse or store "^3 store - When purchased from store, consumer takes responsibility for transport Promotion- - centered on catalog, and word of mouth - attention getting promotional efforts; media varies depending on market - Target audience young, highly educated, liberal cultural values, white-collar, and not concerned with status symbols; this group is similar internationally Service- -Little customer assistance -customer chooses, transports, and assembles products.
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