IKEA Competitor and SWOT Analysis

IKEA Competitor and grind AnalysisJump to food food market Analysis Environmental Analysis IKEA nerd Analysis Growth Strategy merchandising Mix of IKEAIKEAs Vision To nominate a collapse everyday life for the m each peopleIKEA problem IdeaWe sh every(prenominal) offer a wide shed of hale-designed, functional office furnishing increases at prices so low that as many people as possible go out be able to afford them.IKEA group is hotshot of the top piece of furniture retailers in the world. With its unique combination of form, function and affordability, IKEA severalise itself from separate furniture retailers. With its success in US, Europe, IKEA entered the disjuncture market with the try for of continuing its success. Even if it was not very successful initially, it cleansed by dint of its market research and advertisements. Nowadays, IKEA captured major market sh be in the Gulf market and besides the reputation of being the fastest- spring uping furniture retailer in the Gulf.This typography focuses on our contest syndicate midriff how they argon seek to make profits and hand market sh ar and what IKEA Dubai is doing to conquer their space. facial expression at diametrical components which scram be find issues to be resolved for IKEA. round internal issues inescapably a a give cargon(p) POS terminals and security of m peerless(prenominal)y fatalitys to be the aim to achieve.Competitor AnalysisThese analyses are basically make to assure your competition which gives you an edge. It armed emoluments you in giving you an indication of their several(prenominal)magazine(prenominal), present and future strategies. It helps you to get through your testify competitive advantage and it helps you develop strategies to placemaneuver themIdentifying IKEAs competitors and belowstanding them would help IKEA a lot in their strategies. Home Centre is one of their competitors exclusively looking at the past gross revenue and p rofit figures IKEA has done better than Home Centre. Home Centre has been very brave in their market strategies. Their promotions and announce has been one of their strengths that IKEA on the other hand has different activities expiration on in the insert. For example last month they had lighting Activity and this month they afford Dining Activity which means they enrol tender products in these drags and display them in the nearly shell and strategic places where approximately clients whoremonger see and buy them.As per hearth pump they obtain been pushing customers towards them by their naked as a jaybird promotion of giving out gift vouchers on a purchase of 200Dhs. This has been some kind of successful. IKEA has its look on them and monitor their each and every move and even them. IKEA has a big Marketing team which comes up with a lot of solutions and ideas but they still face completion from scale centre. So what they did afterwards home centres promotion t hey distributed 200,000 coupons all over Dubai for free for people to fill and come to IKEA Dubai or Abu Dhabi stores and drop it in raffle boxes. The prize is 5 winners ordain be winning 2000Dhs of IKEA products each of their choice. The draw is still due on April 18th 2010.Other competitor for IKEA is Pan Emirates and many other furniture retail stores in Dubai.Market AnalysisMarket analysis are basically done to determine the market and its attractiveness because its related to the firms strengths and weaknessesMarket sizing can be evaluated with the present gross revenue of the firm compared with the past gross revenue or expansion of reliable mountain chain of products. Market size and growth for IKEA has increased as compares to last course of study where IKEA Dubai was affected with recession and not much profit were made. But in as per straight in March 2010 they require achieved what they had budgeted.Figures show that as per march 2010 in that location has been a growth in total gross revenue by 7.3% do gross revenue in the month of March to 42MillionDHS. It shows how much total sales were made by furniture items and market-hall items. The market has gr induce this year as the recession has gone d admit. The sucker customers are upper and middle social clan families. The sales has grown not just because of IKEAs furniture and market-hall items but because of their polished customers restaurant and exit caf also.Distribution channels the products come shipped from Sweden to gulf verym where they are matchd at the ports and then transferred to their warehouse in Rashidiya -Dubai. From there the products come to tired in IKEA and then they are sold at one time to customers. Their aim is to reduce distribution greets, reduced manufacturing costs and deceiveing costs. How can this be achieved, Through a keen-sighted product range tuition and by adapting product design to drudgery conditions, Through a rational distribution idea in combination with a caring merging with the many people and through a strict cost-consciousness in all battle bases.The IKEA c at a timept aims to make the distance between the supplier and the customer as short as possible by combining the possibilities of the supplier with the needs of the customer.Key success factors and strategic strength for IKEA here are cut concealment distribution costs by producing products in flat packaging, cost efficient distribution system, direct deliveries, and transit deliveries with minimum handling.Environmental Analysis large levelAt this level the environmental factors IKEA is facing is technological and product innovation. They need to come up with untested directions of producing their furniture items which they introduce are at lesser price at the same time are not that strong. At customer work IKEA Dubai they receive a lot of returns of damaged goods or poor flavor products which after some weeks break or get damaged very easily. The expensive products like mattresses and sofas they all check guarantees on them they get replaced but not these itsy-bitsy items which get damaged so easily. They need to think of something new to improve their production of certain products like lack coffee tree tables and TV benches.The most important of them at present are the economic factor, employment and enculturation factors. They are meant to deviate a lot in coming years. little levelIKEA already has Home Centre as their primary competitor and IKEA is doing better than them as IKEA has a big(p)er market share. Threats of substitutes and new entrants are always there and there are many furniture shops and stores in Karama, Satwa, Deira that sell furniture and mattresses at lesser price. Homes R Us is also one substitute which has already entered the market many years ago. They sell all the products that one needs at home. IKEA has much than than 7200 products which is a accession point.Customer AnalysisConsumer air changes a lot with their life elan and standard of living. Once their needs change they change their choices, acquire behavior and buying power. An eye has to be kept on our customers to check what other options they affirm erst their behavior is changes.Customers are divided into different segments like different demographics or geographical location. IKEA has customers from upper class and lower class but from all nationalities. Each has their own buying power and behavior.inner AnalysisPhysical resources of IKEA like machines which are used to fill the stock in self serve and full serve areas are check over and charged daily. The machines, building and production capacity are all well exerted to survive in retail business. They need to improve on POS terminal at fill in and returns where there have been cases of money laundering. Employees have stolen money and caught after many days. So these things need to be taken care of from the management and finance department . This leads to decrease in profits.IKEA Dubai has more(prenominal) than three hundred employees from different nationalities and regularly they are given training in their training centre. Expert professors and managers give them training to increase employee knowledge of products and increase skills at their work.SWOT Analysis(S)trengthsIKEA has maintained a yearn-term partnerships with its suppliers. This ensures they have gritty quality products and materials at a reasonable price.IKEAs scroll the 2nd most read book after The sanctum Quran in the world. The best merchandising strategy they have for many years.Home planning and use up sales servicesTheir customer service at IKEA Dubai has been the best so far. Even people from Sweden came to visit IKEA Dubai and they were shocked to see our customer service on our peak days. Customer service embroils Operators, Information Desk, Play rooms for kids, Exchange and Returns, Merchandise Pick-up and Home delivery services whi ch also admit assembly services.(W)eaknessesIKEA is a global company, so product standards may be difficult to maintain. production faults decreases product quality.(O)pportunitiesIKEA can further capitalize on the green movement and IKEAs customers desire to have less of an impact on the environment.IKEAs new store in Abu Dhabi will be a great opportunity to cater a different segment of people.(T)hreatsThe regulatory environments crossways the globe vary and can affect how IKEA does business and their product costs, oddly the use of natural resources.Competitors like Home Centre and Pan Emirates consume in a lot of promotions and sales in their stores Whereas IKEA has store sales just in June and July.Key issues IKEA faces are internally like production fault or poor quality products. Need to reduce wrong products or totally stop selling them because of complain form customers. They need Improvements in the POS terminals, reducing accepting open packages and sales errors.BIBL IOGRAPHYhttp//www.ikeadubai.com/http//www.netmba.com/marketing/market/analysis/http//www.homecentre.net/index.php?_a=corporatehttp//www.productmanagementtraining.com/product-management-training-day1.htmhttp//www.ehow.com/facts_5278469_ikea-swot-analysis.htmlCONTEMPORORY MARKETING STRATEGIESMARKETING PLAN PHASE 2Executive SummaryAim of this report is to understand IKEAs archetype more thoroughly and maintain /increase the current market share. It is one the objectives of this report to increase sales and quality of production of certain products in which they receive a lot of complain. Improve POS terminals by installing new software package and making it much more secure. Making the most use of the June and July sales to increase sales to 10% compared to 7.3% in March.The methods and recommendations I have chosen to increase market share is to introduce IKEA Family here in Dubai as well. This will let us increase our customer base and prey new segments. The sales will also incre ase and we will have new members who will benefit from our exclusive services and new products. IKEA family has its own products which will be brought in from Sweden for the members. Sales to be increased to 10% we will have to improve our services and products in June and July. The new range of products will be brought in from Sweden and this new IKEA family will be promoted all over IKEA stores in Dubai and Abu Dhabi and our websites. We can introduce this anytime in this year.Marketing ObjectivesTo maintain the current market shareTo increase the current increase in sales from 7.3% to 10% by July 2010To improve POS terminals and safetyTo improve quality of certain products if not discontinue them and bring in new products which are selling well in Sweden or in other stores of IKEA in the world.Targeting and PositioningIKEA has traditionally targeted homeowners but as the housing market weakens the IKEA is going after a new group of buyers to grow future sales Small business owner s and new families launching the gulf marketIn the past 12 months, IKEA has started creating interior designs and products for entrepreneurs and these families such as kitchen designs and contract sales for small business owners. In April the company is also expected to institute a new website, ikeabusiness.com, where small business owners can discover new ideas for designing their offices and share them with other entrepreneurs. 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 once the customer buys the kitchen.It will be an interesting development to watch, because their targeting strategy is kind in buyers preferences and they are meeting it by providing more than 7200 products with the best of customer services. Many small business owners are price conscious and would take IKEAs products as an economic alternative to other suppliers. In addition, despite not havin g a strong existing selection of business furniture and accessories, entrepreneurs are already going to the stores to buy chairs, tables, storage solutions, and other products. Wide range of products helps them improve salesDifferentiated marketing is their strategy. They have different marketing mix plans for different segments. Now they should have a new target segment in this which is the disabled people. They do have this in IKEA UK and other stores in the world. They should start this in IKEA Dubai as well. Its called IKEA Family. You need to suit a member of this family and then avail different benefits like discounts on certain IKEA Family products. Offers on their food products and free IKEA magazines. This will let them target a new segment and increase sales and customer flow in their store. It will build a emotional relationship with these special family members.Marketing positioning statement We do our part, you do yours. Together we save money. This line is originated from IKEA Sweden where it started first. Their flat packed products are easy to take home and flip-flop by the customers because they provide all the instructions and fittings inside the box. If there is any issue in assembly we can always do it for them by proving our assembly services. Quality services will always win customers for the store. Our exchange and refund policy of exchanging and refunding the money back to the customer within 30days is not followed anywhere. Not even In our competitors Home Centres store. We refund the money to customers because Its ok to change your mind. This is what it says at all the 22 check outs we go through and at the customer service department.Growth StrategiesGeneric strategies like priced base, IKEA has prices of their 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 can only be done if they differentiate and h ighlight their services and products more than their competitors. Home Centre has belatedly opened a new store at Mirdiff City Centre which has not affected IKEA at all till now. IKEA can grow 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 own products with fewer prices. Many of our upper class segment customers would adore to avail these benefits because they are IKEAs regular customers. 70% of the shoppers are women and they would love to become a member of this Family. This would lead to alternative directions and IKEA will penetrate into a new market.Product development is another(prenominal) alternate for IKEA to grow and change perception of their certain consumers. Certain IKEA products are not reliable for long or get damaged very quickly. They need to look in to their production department in Sweden and produce products like Lack coffee tables and TV benches much stronger. They can eit her discontinues these items and bring in new stock from Sweden because not all the products are sold here in IKEA Dubai. Expedit Book shelves comes in flat pack boxes and they are shipped from Sweden and when customers buy them from here, once they open it some parts are either missing or damaged. So the quality of production has to improve form IKEA Sweden or they have to double check it once they reach in their Rashidiya warehouse in Dubai. Customers complain about the hassle of buying and then realizing its damaged or some parts or fittings are missing and coming back to replace at exchange and returns counters.Other alternatives for them to improve are to bring forward or have new POS terminals with much security. They need to improve the systems and traind the staff with the new changes made. There have been cases where co-workers have been stealing money from their tills. If we have a secure and improved system this wont happen again. phrase development IKEA in gulf is exp anding and opening a new store in Abu Dhabi UAE.The present Ikea store in Marina Mall, which continues to serve thousands of our Abu Dhabi patrons, will be relocated to Yas Island where it will be transformed into a full-fledged judgment store, he added. Under the agreement, Aldar will provide the structure for the Ikea store under a renewable, 10-year lease agreement with Al-FuttaimThe Ikea store on Yas Island will have a total floor area of 32,000 self-coloured metres and a sales area 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 set places. Franicevic verbalize the Yas Island store will provide a strong caprice for the Swedish furniture and Furnishings Company to push ahead with plans to expand in the region.We expect to serve nearly 1.3 million visitors in the first year of operations, said James McGowan, Ikea manager for Abu Dhabi. Himendra Mohan Kumar, Al Nisr Publishing LLC 2009Selection of warr ing AdvantageIKEA has a competitive advantage over its competitors and has sustained it for a while. This advantage can mainly be attributed to its resources and capabilities namely human resources, station and IKEA concept.Ingvar Kamprad the founder of IKEA though retired is still a cheerleader for the practices/concepts that define IKEA culture. Cutting prices is one of the competitive advantages IKEA has over its competitors and this is another message that comes across loud and slide by among IKEA operations. IKEA aims to lower prices across its entire offering by an average of 2 percent to 3 percent each year.Targeting middle class customers who shares buying habits and providing similar shopping experience the world over has made IKEA a unique shopping experience. More than 7200 products ranging from kitchen cabinets to candles and textiles making store visit more of an outing than a chore seducing the customers with one touch after another within the shop offering other ser vices like restaurant, kids area and the like flat-packed nearly all big items to save shipping cost and allow shoppers to haul their own stuff and many more, makes IKEA concept of its own kind and as a tops boost its image (brand).These resources are expensive (enables the firm to respond to environmental threats and opportunities) but each on its own is not rare and hard to imitate. IKEAs ability to combine these resources in the way it has done (creating IKEA world), makes the whole experience rare and non-imitable. As a result IKEA enjoys and sustain a competitive advantage over its competitors. Jay Barneys framework on Gaining and Sustaining Competitive Advantage, 2006Marketing Mix ProgrammePriceIKEAs strategy is based on cost leadership. Across markets where it has current presence, products are sold at low prices. Prices are 20 to 30% lower than competing products. Price varies only in a result of fluctuations in exchange rates. This pricing enables IKEA to gain significant market share. Low prices are a result of large-quantity purchasing, low-priced logistics, store location in suburban areas and a Do it yourself progression to marketing.IKEA also benefits from economies of scale and healthy supplier-firm relationships. IKEA enters into long-term contracts, provides leased equipment and technical swan in exchange for exclusive, low-cost manufacturing from suppliers. For new markets, IKEA should retain its price-image to maintain the brands positioning.ProductIKEAs value chain is unique in that customers are also suppliers and suppliers are also customers. The transactions between the supplier and IKEA and on to the customer have a value adding step in each stage.Product note exists in the value-added dimension. IKEAs consumers know the concept of IKEA of Do it yourself with most of its products requiring assembly after purchase. But although assistance in this aspect is limited, IKEA offers customer service and home delivery services which inclu des transporting and assembling furniture.While this is well accepted in areas where IKEA now operates, it may be a point of consideration when entering new markets. Should IKEA encounter a market where DIY is not favored, IKEA may include the cost of the service to the products price. It does encounter such market where they face customers in Dubai who dont like picking products from self serve area. They just give the attend to sales person n tell them to bring the products which is not the concept of IKEA but still sometimes we have to do this for the customers to keepo them satisfied with the service we provide.Position/PlaceIKEA store is located in Dubai Shopping Festival. Which is a good location one of the Middle Easts largest mixed use real estate projects, that covers over 1,200 acres. Spread over 25,400 square meters This is a factor in the achievement of IKEAs low pricing. While it may appear as a disadvantage, this fits IKEAs target market of customers willing to transp ort their own purchases and requiring less assistance in assembly.PromotionIKEAs promotion is centered on the IKEA catalogue which they launch every September of the year. There catalogue of 2010 has been distributed all near the world in millions. This is their best marketing and promotional strategy. This catalogue is said to be the 2nd most read book after The Holy Quran. It includes all the different range of products but not all.Secondly advertising is done every month in newspapers like Gulf word of honor and Al Arabia news papers whenever they have a new action at law going on in the store for example they have eat activity currently going on so they have printed 2 different adds in these newspapers with different products and prices. They even advertise on tuner 101.6 and one Arabic radio channel.Proposed strategic choices will improve sales and market share by bringing new products and introducing IKEA Family in Dubai. This will increase their market share in Dubai bec ause study shows that IKEA customers want something more from IKEA and disabled people can benefit from IKEA Family with special discounts and services.Bibliographyhttp//www.ikeadubai.com/http//pathfinder01.blogspot.com/ Understanding IKEA How a Swedish Company Turned Into a Global Obsession (II), 2006http//www.oppapers.com/essays/Ikea-Marketing-Mix-Analysis/167093http//www.essayclub.com/term-papers/Ikea-Marketing-Plan/7406.htmlhttp//www.thefreelibrary.com/Aldar+and+Ikea+UAE+break+ground+for+Yas+Island+store.-a0218635945Himendra Mohan Kumar, Al Nisr Publishing LLC 2009, Aldar and Ikea UAE break ground for Yas Island store.