IKEA's Mission Is to Provide Term Paper

The stylishly designed, low cost furniture is appreciated by many customers. Even in the recession, IKEA was still able to maintain sales growth. IKEA has used word-of-mouth as their marketing strategy, and customer loyalty is the major component of IKEA's success.

Not every furniture company has the ability or money to develop smartphone apps. However, IKEA is able to increase its sales through e-commerce, which also increases company's accessibility and brand awareness (Ikea assembles record profits for 2011, 2011).

Moreover, IKEA is one of the very few furniture stores that carry a wide range of products with relatively low prices. Although the Bay is one of the largest retail chains, it does not offer a wide range of home furnishing and housewares selections compared to IKEA. The Brick and Leon's are furniture focused companies, but they do not operate internationally and their brand awareness is lagging behind IKEA's.

New entrants of furniture company in the forecast period are moderate because a lot of furniture companies do not go internationally due to the fact cost can increase at any time for security purpose. That goes along with the fact customers are not in high demand of furniture due to the fact, recessions have hit the economy more than once, which is another advantage of IKEA low cost products. However, some strategies that IKEA could take from their competitors are to offer a low interest rate or no interest for a year or two by increasing the furniture price so that they can have a better quality of product.

Because IKEA is trying to reduce its overdependence on a few suppliers, IKEA lean towards to import furniture internationally. This is because there has been improvement to chemical and waste management, fire prevention and workers' health and safety, and today the average IWAY fulfillment rate for Chinese suppliers is 93%.

However, doing business internationally is difficult, because it is essential to understand the culture and tactics of a foreign country (Sustainability Report, 2011). If IKEA does not understand the culture and tactics of their foreign suppliers, the foreign suppliers will decrease because it is a great insult if business partners are not aware what they are about. If they go more internationally without making the changes that they need, they are at risk of losing the business. By trying to expand the business internationally, it shows great leadership within the company because the leaders obviously saw a need to change in order to make revenue better.

References

Ikea assembles record profits for 2011. 2011. http://www.thelocal.se/38616/20120120/

Presentation on IKEA. 2008. http://www.slideshare.net/amarendrahota/ikea-final-presentation

IKEA Invades America. 2011.…