IKEA's Global Strategy - Furnishing the World Essay

IKEA's Global Strategy - Furnishing the World - Essay Example The entrance of IKEA into Germany has been unbeaten because of low prices of IKEA’s products. Although Germany was a mature market and various established retailers were attracting the major consumer segments, still IKEA enlarged the market and changed the competitive position because even the established retailers adopted the formula of IKEA in their own operations. In Germany, unlike traditional retail stores, IKEA introduced lean organizational strategies through which it enhanced responsibilities and freedom of employees. These strategies energized employees by increasing their motivation level. Canadian market was also a mature market, however, IKEA through its full advertising campaign, positive word-of-mouth and newly recruited local suppliers, energized Canadian market and successfully established its position. Moreover, in Canada, lean organizational practices were welcomed. In the huge and mature market of U.S. IKEA established it position by catering to the local ta ste and tapping into local expertise through franchising, acquisitions and joint venture. Therefore, IKEA’s practices insisted the competitors to reconsider their pricing strategies, advertising strategies, product features and management styles. It has analyzed from case study, that most of the markets which IKEA has targeted, word-of-mouth remained the best effective advertising strategy of the company however, in the U.S. market more focused media-advertising was required. IKEA through its TV advertising campaign touched the personality, life style and emotions of people and encouraged the sales of company. Through this campaign IKEA actually changed the furniture buying behavior of the consumers in the United States. The series of eight TV advertising spots was featured in such a way that every consumer in the U.S. could associate himself/herself with one of the series. Therefore, after this campaign, consumers started buying furniture not only to furnish their living space but as a matter of their lifestyle, personality and emotions. The campaign benefited IKEA because other companies in the U.S. were spending huge in advertising to stay in the business, whereas, by changing the behavior of consumers towards furniture, IKEA grew its customer base.