1. Didem AHN Ahmet OCUK 2. IKEAs Business IKEA is an international home product company that designs and sells ready to assemble furniture appliances and home accessories IKEAs Vision IKEAs vision is to create a better everyday life for the many people. IKEAs Mission To offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them. 3. IKEAs Strategy: Finding Smarter ways to make Furniture Strategy followed by IKEA Price Quality 4. IKEAs Founded Furniture Introduction Furniture Catalogue IKEA TURKEY 2000s1990s1980s1970s1960s1940s1930s 1950s IKEA designs its own Furniture IKEA introduces Flat packages IKEA stores open at USA France England IKEAs Timeline IKEAs Company History* *Source: www.ikea.com Enterance to the new market in Russia Japan Signed a new partnership with Maya Holding A. 5. I (Ingvar ) Founders first name K (Kamprad) Founders last name E (Elmtaryd) Farm where he grew up A (Agunnaryd) Home village 6. IKEAs political environment is favourable. In Europe and America, the political systems have developed over long time providing a very stable environment. IKEA does not operate in Africa where most nations are not politically stable. Furniture Market Political P Recession reduces disposable income and hence the demand (Low prices advantage) Enjoys economies of scale High barriers of entry for competitors due to low prices offered to consumers Economic crises in Russia has also effected Turkeys economy. Economic E Changing with social trends E.g. Many people associate Sweden with a fresh healthy way of life. This Swedish lifestyle is reflected in the IKEA product range. The freshness of the open air is reflected in the colors and materials Social S Innovative designs 3D mobile catalogs for the customers Flat sized packaging Lots of assembling videos on youtube Technological T PESTEL Analysis Labor laws Taxes and duties Environmental Laws Lesser carbon footprints Ecologically sustainable Recyclable products Online tips on reducing environmental impact (CSR) Legal Ecology E L 7. Competitive Analysis of IKEA Comparing Chart of IKEA and It's Current Rivals Name of the Company Number of stores Number of Employees Number of Product Variety Market Share Growth Targeting Plan Current Revenue 29000 employees More than 40000 products. 7% Targeting to grow 100% by using franchise model in Mediternian and Ege Areas. 235,76 million euro 37 stores in 19 Turkey cities More than 3000 employees More than 40000 products. 45% Targeting to open min. 5 stores in every year. Approximately 1000000 TL revenue. Has 2000 employees in Turkey Stores and 10000 employees in other country's stores 12000 kinds of products. N/A Targeting to grow 10% in 2015 25,17 billion euro 87 stores in Turkey More than 500 employees 3500 different kinds of products Under 20% Revenue target is 110 million TL 100 million TL 91 stores in Turkey and 9 stores in the other countries. 1200 employees 40000 different kinds of products 5% Targeting to increase number of stores to 120. 120 million TL 27 tepe home stores ,12 Tepe Kitchen ,10 Tepe Furniture sellers in Turkey Approximetely 1750 employees 40000 kinds of products 25% Revenue target is 184,7 million TL 168,3 million TL 13 stores in Turkey and 8 stores in other countries. Approximately 800 employees 25000 different kinds of products 11% Targeting to grow 40% in 2015 120 million TL 4 strores in Istanbul 22 employees 5000 luxury furnitures and import furnitures 1% Targeting to increase number of stores to 18. 60 million TL 34 stores in 17 cities in Turkey More tahn 150 employees 14000 kinds of products. 14% Targeting to increase market share to%20 2500 million TL 22 stores in Turkey 363 employees 500 kinds of products. 10%-15%Targeting to grow 60% 120 million TL 244 stores in 43 different countries More than 13000 employees Approximately 311000 different kinds of products 30% Targeting to be the third big Furniture Company in the world. 5,8 billion TL 8. Potential Rivals Porta Mbel: One of the IKEAs international rival determened to enter Turkish Market with the partnership of Bodyak Holding. Walmart is the most serious rival for Ikea .At the same time a new maket research for Tukey market is performed by Walmart. Conforama is a France orijined firm which is a strong rival of Ikea in Europe, is deceded to open a new store in Istanbul Umraniye. Substitues There is no specific product that can be a substitute for the furniture but IKEA at least, have to keep up with the latest trends, to avoid becoming out of style Problems faced due to distribution channels 9. Threat of Buyers growing bargaining power There is a little power because of the existing low-price options IKEA ensure that their customers in all aspects will be satisfied for quality service they provide Focused their marketing approach on demands and needs of the buyer IKEA uses their corporate responsibility as a good public image to their customers IKEA Family -card as a membership IKEA uses pull strategy to the customers. Threat of Suppliers growing bargaining power IKEA has its thousands of suppliers that set standards in delivering the materials Because of the low-pricing, IKEAs profit margin also affects the prices in raw materials than by prices in labour IKEA has a wide network of 1300 suppliers. They carefully select the manufacturer of its products. The company has own production factories and designers which makes it less dependent on others Bargaining power of supplier could be threat for the profit of the company 10. DEMAND ANALYSIS According to the some researches in Turkey, Local furniture producers give affordable prices to their customers, but they have limited options and demonstration capability. IKEA differs itself with their highly wide range and colorful options and also aims to upper level status with average and low income level people. And this is an exception for Turkey in the world. 11. INTERNALEXAM EXTERNALEXAM SWOT W O T S STRENGTHS Wide range of products and styles Cheap and affordable One stop shop Easy shipping and transportation Eco friendly and recycling of products Functional design of products Appealing shopping experience OPPORTUNITIES Untapped markets like middle east and Asian countries Better advertisements Online sales Demand for greener and environment friendly products Conforama Company which has 3.3 Million Euro revenue abandoned Turkey Market in one year. WEAKNESSES Assembly of furniture Yet to invade upcoming global markets Products dont last long Product dimensions unsuitable for global markets Advertisements in the form of catalogues mostly THREATS Organized sectors like Masko and Mobesko Furniture Unorganized sectors like local manufacturers and carpentry stores Competitors opting for similar designs with a contemporary twist to cater to upper class POSITIVE INFLUENCES NEGATIVE INFLUENCES 12. IKEA THE BRAND Iconic Sensible 13. Segmentation (Hybrid Segmentation) Young and fashionable people (20-35 ages range)(Demographic Segmentation) Targeted middle class customers ( Lovers of modern furniture and accessories.(Behavioral Segmentation) Colorful and novel products 14. TARGETING They are aiming to appeal to people of all ages, sexes, geographic, locations, all who have one thing in common: Price preference. In Turkey, Single and who have High Income Level people Married and have Average Income Level couples Who likes simplicity and functionality together in every age 15. POSITIONING A. Cost Leadership B. Shopping Experience C. Swedish Design Functional and Simple 16. Low-cost modular ready to assemble furniture Get it delivered for a fee or by yourself Employees are trained to save electricity Fly in economy class Take buses instead of taxis Expensive wood is used only on top visible layers of the furniture Suppliers are chosen from a pool of 1800 to maintain cost leadership 17. B. SHOPPING EXPERIENCE Displays every products in rooms Give a message You Dont need a decorator, you can get a harmony in your flat just like that The Swedish Restaurant (as popular as its furniture) serves to people who walk through 25.000 sq m. (average space of IKEA store) Customers move along a predetermined path through a maze of rooms aligned to its customers who are young but not wealthy 18. C. FUNTIONAL&SIMPLE Design is the last step, after choosing the price point and manufacturer, in the process Designers mainly focus on simplicity and functionality in IKEA 19. COMPETETIVE ADVENTAGE Low price and good quality more than competitors Good service High quality of design Wide varieties 20. BCG Matrix for IKEA Textile products were investigated to be an example for BCG Matrix: Ikeas Textile products are question mark on BCG Matrix because of the strong rivals like Linens etc.Decision is investing to make them a star. 21. ANSOFF GROWTH MATRIX IKEA uses market penetration strategy for its current products. By the decision of selling food and openning restaurants inside the store they used conglomerate diversification. By entering Turkish Market Ikea used Market Development Strategy. 22. 7P's Marketing Mix Marketing Mix Product Price Placement Promotions People Physical Evidance Process 23. PRODUCT Flat sized packaged boxes Basic assembling guideline Modular storage Easy to assemble Food, with a European touch In-store restaurant Product extends to service Excellent Sweedish design Using different types of wood for a single wooden product High quality materials on furniture surfaces All IKEA products come with a 2 years everyday quality guarantee Same day shipping with the online shopping Sewing service for textile products Flexible return policy Has 24 hours open call center for any questions. (444 0 532) 24. Product Line Bathroom Laundry Bedroom Lighting Children's IKEA Living room Cooking Secondary storage Decoration Small storage Dining Textiles Eating Workspace Hallway Youth room Kitchen 25. Reverse positioning strips away sacred product attributes while adding new ones. IKEA innovative marketing and phenomenal growth brilliant reverse positioning. PRODUCT LIFE CYCLE 26. Product Price Mix (TL) STYLE PRICE RANGE Scandinavi an (Sleek Wood) Modern (Minimali st) Country (Neo- traditiona l) Young Swede (bare bones) High Medium Low IKEA's Product Price Matrix Pricing Strategy: Market Pricing 27. PRICING STRATEGY Prices as low as $2.99 advertised 28. PROMOTION High profile advertisement campaigns Spending 70% of annual marketing budget in printing catalogs. Online shopping. Ikea providing home delivery service to its customers After sale service to the customers. Online advertisements. Mini designed homes in the stores Sale compaignies in winter and summer times. Kitchen planner tools (Design your own kitchen before you go) Gift cards for the friends. Ikea family card obtains discount. (Customer loyalty programme.) Advertising by using WOW 29. IKEA GUERILLA MARKETING IN MANHATTAN 30. PLACE The vast majority of Ikea Stores are located out of city center in Europe because of land costs and traffic problem. There are 5 Ikea Stores in Turkey and most of them located near Shopping Malls. The cities are:Istanbul-Bayrampasa,Ankara,Istanbul- Umraniye,Izmir and Bursa. We can easily say that its an advantage for Ikea because of the dense of population. Distribution Channel: Direct and Selective Distribution Channel for Online Shopping:Direct and Intensive 31. Augmented Services 32. Customer Experience at IKEA Bright and inviting store atmosphere Resembles Modern Theme park with childcare centers Restaurants serving various delicious meals. One stop shopping experience IKEA for kids: You shop, kids play IKEA provides clean feeding and changing rooms for small children Restaurant has a special menu just for kids Free parking place IKEA without barriers Free wireless internet access PHYSICAL EVIDANCES 33. PEOPLE Knowledgeable and friendly staff. Technical support from experts. Design advice department Personal Selling Team (Staff and Other Customers) Ikea is a place where the people socialize with each other PROCESS The furniture is made by IKEA itself whereby IKEA makes its own wood-based furniture and wooden components. So for example the business owns forestry sawmills. The customer drives to the store, selects a product, orders, it, and then collect it, only then to have to drive the product home themselves. This is all part of the low pricing commitment. 34. CONCLUSION IKEA is the biggest retailer furniture company in the world. With their wide range options, they want to reach as possible as more peoples home. Additionaly ,Ikea is the biggest catagory killer in the world. There is no company to dare with them. 35. SOURCES 1. IKEA (2013). About IKEA. Available at: http://www.ikea.com/ms/en_GB/about_ikea/index.html 2. The Times 100 (2012). Business Case Studies. Ikea case study. Available at: http://businesscasestudies.co.uk/ikea/swot-analysis-and-sustainable-business- planning/strengths.html#axzz2VB9TPpjz 3. Interbrand (2012). Best Global Brands in 2012. Available at: http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands- 2012.aspx 4. Wikipedia (2013). IKEA. Available at: http://en.wikipedia.org/wiki/IKEA 5. http://kevinrjohnson.weebly.com/uploads/5/6/3/7/5637086/marketing_paper.pdf 6. http://shazeeye.com/value-proposition-and-positioning-ikea-case-study 7. http://www.milliyet.com.tr/fransiz-conforma-turkiye-yi- terk/ekonomi/detay/1842760/default.htm 8. http://www.milliyet.com.tr/ikea-nin-alman-rakibi-turkiye-ye- geliyor/ekonomi/ekonomidetay/25.03.2011/1368892/default.htm