BY:

DEEKSHANT GAHLOT
GORLE KRISHNA CHAITANYA
GAJENDRA SINGH
DIVYA PRAKASH
DHONDI SAI KRISHNA

Outline
Introduction
Vision And Business Idea
IKEA spirit: Ingvar Kamprad
Cross-Cultural Issues and resolution
Future Prospects: In India

Marketing Innovations

Introduction
Designs and sells ready to assemble furniture appliances and home

accessories in flat top boxes.

Founded in 1943 in Sweden by a 17 year old Ingvar Kamprad
Started business by selling pens, Christmas cards & seeds
Recognized the business opportunity in changing Cultural values*
Gradually grew into a retail titan in home furnishings
Revenue: 29.30 billion (FY 14)
Employees: 147,000 (FY 14)
Store Spread:
315 stores in 27 countries
Foot Fall:
716 million store visits in FY 14

Vision And Business Idea

Vision: To create a better everyday life for many people
Business Idea: IKEA's Business idea is 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.

The IKEA way:

Democratic Design

IKEA spirit: Ingvar Kamprad

Started selling Christmas

mags and seeds at his farm

Soon realized potential in
Furniture market
Simple living, High
thinking
Networth = $52.7 Billion
What motivates Ingvar is not
profit but improving quality
of peoples life
Source of IKEAs informal
work culture

No of IKEA retail outlet

Geographical Spread

SALES BY REGION
Europe 69%, North America -15%,Asia & Australia -9% and Russia 7%
TOP SUPPLIER COUNTRIES
China -25%, Poland- 18%, Italy -7%, Sweden 5% and Lithuania -4%

Cross-Cultural Issues
IKEA tasted early success in Scandinavian countries
Next, step was:

Cross-Cultural Issues
IKEA tasted early success in Scandinavian countries
Next, step was:
GERMANY

Did not take long until the problems

appeared: Work culture difference
became apparent.
IKEA transformed its informal work
culture to a more hierarchical one.

Similar work cultures arrived in

France and other Central
European countries

Cross-Cultural Issues
Ventured into Japan in 1974, failed to lure the

Japanese audience, exited in 1986

Issues faced in Japan:

Self-service and do-it-yourself (DIY) assembling

More demanding customers
Smaller sized homes and living spaces

IKEA re-entered Japan in 2006

With increase focus on consumer

Awareness and better customer
service

Cross-Cultural Issues
IKEA opened in USA in 1985; initially tried to

replicate its existing business model and products

Issues faced by IKEA in US (few examples):

Flower vases for drinking glasses

Different sized beds, closets
and drawers

Cross-Cultural Issues
IKEA opened in USA in 1985; initially tried to

replicate its existing business model and products

Issues faced by IKEA in US (few examples):

Flower vases for drinking glasses

Different sized beds, closets
and drawers

Cross-Cultural Issues
IKEA entered China in 1998; here it faced peculiar

problems
Low-price strategy created confusion among Chinese
consumers while local competitors copied its designs
New strategy:

Targeted young middle-class segment

Projected itself as an aspirational western brand
Changed store layouts reflecting smaller living spaces and
modular wardrobes

Currently operates 18 stores

Cross-Cultural Issues
IKEA ran into controversy in Saudi Arabia where it

airbrushed women from their catalogues

SA

Sw

IKEA IN INDIA
Challenges:

Corruption and bureaucracy

Existing low prices; No
brand recognition
No DIY Culture and varying
consumer tastes

Legal:

FDI in single brand retail

30 % mandatory local sourcing

Takeaways:

Adjust products to local

needs
Intensive marketing efforts
Opening smaller stores
before flagships
Customer awareness: DIY
Increase localization of
products
Customize supply chain to
gain competitive
advantage

IKEA IN INDIA
Challenges:

Corruption and bureaucracy

Existing low prices; No
brand recognition
No DIY Culture and varying
consumer tastes

Legal:

FDI in single brand retail

30 % mandatory local sourcing

Takeaways:

Adjust products to local

needs
Intensive marketing efforts
Opening smaller stores
before flagships
Customer awareness: DIY
Increase localization of
products
Customize supply chain to
gain competitive
advantage

Times of India: IKEA buys land in Hyderabad for first India store

IKEA: Innovative Marketing

Catalogue (70% of annual marketing budget)

Printed 208 Million copies (greater than bible)

62 different version in 43 countries
The Book Book campaign

Augmented reality

Launched in 2013
Revolutionized customer
experience

Online series :
IKEA home
Easy to assemble
Assembly tutorials

IKEA! A Brand for All the People.

Thank You !