IKEA Inc. United Kingdom (UK) operation Essay Example | Topics and Well Written Essays - 2000 words

IKEA Inc. United Kingdom (UK) operation - Essay Example IKEA was founded in Sweden in 1943 by Ingvar Kamprad Elmtaryd Agunnaryd. The company’s name represents the initials of its founding father. Since the begging Mr. Kamprad had the vision of creating furniture products of good quality in which he applied low cost solutions to lower the prices. IKEA has grown tremendously over the years to become a global enterprise. Currently the company has 220 stores in 33 countries. In the United Kingdom the company has 15 stores. The product offering consist of over 11,000 articles. The great variety, innovative designs, and low prices are some of the reasons customers keep coming back to IKEA for their furniture needs. Exhibit A shows a graph of IKEA worldwide sales. In 2005 IKEA sales were 14.8 billion euros. IKEA utilizes low cost, green furniture and e-retailing strategies to grow its business. The United Kingdom is a country with a strong economy that the company has targeted as a location to expand its business. Designing products to meet the needs of the customers and constant market research will allow the company to expand its global empire. Political and Economic Forces The United Kingdom of Great Britain and Northern Ireland is one the world’s most powerful nations. It is a member of the Group of Eight (G8), whose inclusion means the country is one of the top eight industrialized countries in the world. ... Managerial Implications IKEA is a company with a proven long-term strategy. The company’s great product variety, low prices and logistics has helped them become a global player in the furniture business. They have focused in the European market, which generates 81% of their corporate revenues. A glaring weakness is the fact the company has not entered the South American market. In South America there are many developing economies such as Brazil and Chile should be targeted in future expansion plans. The US market is another region which has a lot of potential for growth. Currently only 11% of their sales are generated in the United States. The company should study what has worked in their US stores and apply that knowledge to increase their market share. Multiply viability studies must be underway to scout new locations for establishments in this region. IKEA has utilized catalogs and the internet as marketing tools to generate sales. The United Kingdom is a great place to test new technologies and realize market research. The business e-commerce strategy would be enhanced if the company developed or acquire a technology to identify the entry of new users into the internet. The company’s corporate website utilizes a lot flash technology and animations which require users to have a high-speed internet connection. Refinements and web site optimization techniques could help the company increase its online traffic.