Swedish company IKEA releases a 300-plus-page catalog each year featuring its fu
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Question
Swedish company IKEA releases a 300-plus-page catalog each year featuring its furniture in fashionably modern room settings. The 2013 catalog comes in 62 different versions for 43 countries. IKEA’s photo shoots for the catalog take place in one of Europe’s largest studios—94,000 square feet—which employs almost 300 photographers, interior designers, carpenters, and others involved in making each scene just perfect. The process is very labor-intensive and wasteful because rooms are built up and torn down and often thrown into a dumpster after the photo shoot. The catalog typically consumes 70 percent of the company’s marketing budget each year. However, all that is being reduced thanks to technology. IKEA’s catalog is going digital. Instead of a couch or bed or table or entire room, many items depicted in the catalogs are now merely pixels instead of pine. This year, 12 percent of the content online, in catalogs, and in brochures is not even real, and that proportion will increase to 25 percent next year. Using 3-D graphics to create the scenes, IKEA can cut costs and more easily manipulate imagery from one country to the next. Whereas Americans might prefer darker woods, a given living room can be shown with lighter woods for Japanese consumers. Don’t expect to find any fake people or pets, however, because 3-D figures tend to look like ghosts.
IKEA has achieved something big. It has become the world’s biggest furniture retailer by selling the same furniture to the people of 41 different countries, representing vastly different cultures with vastly different needs. And it doesn’t seem to be slowing down as it lays out plans to build stores in more and more countries. But adhering to a standardized template for global commerce is only part of the story. IKEA takes great care to properly adapt its stores and offerings so that they appeal to the tastes of each market.
Q1. Visit www.ikea.com and compare a catalog from one country to that of another. What differences do you notice? Can you discern that some photos are 3-D mockups instead of real rooms with furniture?
Q2. Discuss IKEA’s global strategy in terms of the five global product and communications strategies.
Q3. If IKEA can sell a sofa in China for $160, why doesn’t it sell the product at that low price in all of its markets?
Q4. Can competitors easily duplicate IKEA’s strategy? Why or why not?
Explanation / Answer
Answer
Answer 1
Visit www.ikea.com and compare a catalog from one country to that of another. What differences do you notice? Can you discern that some photos are 3-D mockups instead of real rooms with furniture?
There are differences in product offerings, Price range, colour & combinations of products in a catalog from one country to that of another. Yes we can discern that some photos are 3-D mockups instead of real rooms with furniture because 3-D mockups photos are of high quality and can be easily differentiated against photos of real rooms with furniture.
Answer 2
Discuss IKEA’s global strategy in terms of the five global product and communications strategies.
IKEA’s global product strategies are as follows
IKEA’s global communications strategies are as follows
Answer 3.
If IKEA can sell a sofa in China for $160, why doesn’t it sell the product at that low price in all of its markets?
IKEA decides its product offerings and its price range as per demographic and cultural needs of particular country. Moreover IKEA has county specific management style and aims at individual & segmented marketing rather than mass marketing. So Products offerings and price range of IKEA in china will be different from other markets.
Answer 4
Can competitors easily duplicate IKEA’s strategy? Why or why not?
IKEA has following competitive advantages compared to its competitors.
So, Other competitors cannot easily duplicate IKEA‘s Strategy.
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