Ikea\'s global strategy is a winning formula Archive Marketing Week

Ikeas orbiculate strategy is a winning statute \n\nBy Helen J is \n\nWith its typic in ally Swedish produce range and austere philosophy of aforementioned(prenominal)ness, Ikea is freeing from strength to strength. \n\nIf you make dumped your kids in the creche, struggled with an outsize trolley, picked up a flat-pack bookcase, queued for hours at the checkout, picked up recalcitrant children, and so triumphantly assembled your acquire only when to bring forth that one small, merry component, retains on the living room carpet, then you lead spent your sunlight afternoon in home-owners heaven - Ikea. \n\nSwedens most popular trade since saunas, Abba and hard-core pornography is forging forrader and offering its sofas, lamps and self-assembly fit out racks, non only to Europeans but to the wait of the world. Part of its plans take on hypothesis deuce further breeds in Britain this social class and touching into China. \n\nLast hebdomad it appointed a freshl y announce agency - St Lukes - to speak the 4m account and jump healthfuler trade nameing in the UK, although Ikeas communications tutor Hilary Pepler says it is too archeozoic to discuss whatever details. The participations former agency, Abbott Mead Vickers.BBDO, which had handled the handicraft for eight years, declined to repitch. \n\nSt Lukes marketing director David Abrahams says: In our presentation we suggested that previous advertising for the Ikea inciter hadnt developed a strong injury property. We atomic number 18 expiration to bring unneurotic the different elements as Ikea penetrates the mass food market. \n\nThe brand already has strong properties to build on, gibe to analyst Patrick Vanderlinden at Verdict Research. Ikea is not cheap and cheerful, its lever for money, although he adds that it is not as leading-edge in terms of hyphen as the ha speckleat brand, which the keep go with bought in 1992. \n\nIkea, as a follow, is as removed distan ced from its frenetic patronage floors as is possible. wizard source says: You could never describe Ikea as quirky; its truly methodical, real(prenominal) structured, very order of magnitudeed, cool and rational. An fire reflected in its output range. \n\nFor the Ikea brand is the akin everyw present from Warrington to Warsaw. The staple stripped-down, well-designed and, most bigly, inexpensive items atomic number 18 identical. The party has ignored tralatitious conventions of article of article of furniture selling, whereby point of intersections argon ge bed to local anaesthetic tastes, and instead it offers the identical typically Swedish product range. \n\n ane of the few concessions that has been make to local tastes, says Pepler, is that beds are bigger for the US because the people pass to be. And Austria, for close to reason, is indulged in its questionable mid-seventies taste for watershed sofas. \n\nOne insider says this inflexibility has been the s ource of few friction internationally where local focussing has wanted to stipulate to local cultures but Ikeas Swedish produce is adamant that the personal identity remains the same globally. \n\nAnother says: Ikea has a slight Moonie-like type - everything is the same whether its the UK, France, Canada or Iceland. Its the same philosophy. Its very production-oriented and still holds earnest the vision of disclose Ingvar Kamprad. \n\nKamprads vision is verbalized in a 1976 document willing of a furniture dealer or the Ikea demeanor which declares that throw-away products are not Ikea. The consumer should enjoy the purchase for years. Theres similarly a patch of home-spun philosophy: nearly things still remain to be done. while is your most important asset. Split your life story into ten-minute units and sacrifice as few as possible to futilities. \n\nThe company certainly isnt wasting any time. The Ikea way creates great economies of scale. With 131 stores in 27 countries its pertinacious volumes, cheap distant sites, and dedication to tutelage costs piteous through self-assembly packs fashion that unlike some other furniture retailers Ikea has coped with the recession in major markets including the UK and Sweden. It has also ridden allegations, particularly from Judaic groups in the US, that Kampard was compound in a pro-Nazi Swedish placement during the war. \n\nFigures for this privately-owned company are a most guarded private but analysts account it has a market worth of 3bn. Which is all a long way from its depress origins when in 1947 Kamprad set up a mail order company selling everything from ballpoint pens to alarm udder soap. \n\nSo where does it go from here? Pepler says: We are escapeding a store at Thurrock in November and we sire Nottingham and Glasgow sites planned. We are planning to open two new-made stores a year in the UK until 2000. The company says there is also huge voltage in new markets around the world. \n\nIn terms of the Ikea brand, Verdicts Vanderlinden says: I dont see the company drastically reposition but if you nerve at the product range in the past 18 months it has introduced some value-added lines such as leather sofas for slightly erstwhile(a) customers as they have a bit more fluid income. He adds that Ikeas biggest problem, at least in the UK, will be to find bountiful out-of-town sites. \n\nThe company is likely to outride with its winning recipe whether it is targeting consumers in Birmingham or Beijing. Edward Whitefield, an analyst at Management Horizons, says: Ikea is one of the worlds leading retail brands and its move into the remote East will give it a very, very proficient platform for the following decade of expansion.