Question

Ikea is a Swedish based multinational corporation that designs and sells ready-to-assemble furniture and home accessories. IKEA is the largest furniture company in the world. It is known for its modern architectural designs, as well as its attention to continuous product development, operations details, and cost control. IKEA relies on design innovation to bring great quality and beautiful designs to the market and its stores by collaborating with the best designers from various parts of the world. It has developed cost efficient and innovative methods to match people’s expectations of price and quality. Answer all the three following questions in relation to IKEA. You can use your study material and other resources to write your answers. Use your own words and adhere to the wordcount specified for each question

Question 1: Innovation at IKEA (30 marks, 300 words) A. Why is IKEA an innovative company? Support your answer with examples. B. Discuss the role of four business functions at IKEA. Give at least two innovation examples for each business function at IKEA

Question 2: Product offering and targeting (30 marks, 300 words) A. Discuss the three levels of a product by using the HAMARVIK mattress as an example. B. Discuss the four targeting strategies. Which targeting strategy does IKEA use for its mattresses. Justify your answer. (Check the mattress section on the IKEA website before answering this question)

Question 3: The marketing mix and innovation (40 marks, 500 words) IKEA’s marketing strategy consists of market segmentation, targeting, positioning and the marketing mix. IKEA’s marketing strategy enables the company to be a successful player in the global market. Using your B207A course material, evaluate how the innovation in IKEA’s marketing mix elements are used to position the products within the minds of consumers. Your answer should contain the following: 1- IKEA’s market segmentation and targeting 2- What is positioning. How is it related to the marketing mix? 3- Examples of IKEA’s marketing mix elements and their contribution to brand positioning

Answer 1

Question 1:Innovation at IKEA

A.

IKEA is one of the important innovative companies in the world which sells innovative furniture to global customers. It is called as an innovative company as it has incorporated modern technologies into its business. Though it is basically a furniture company, it thinks like a technological company when it comes to innovations. It is propagating the idea of smart homes with smart furniture. The Augmented Reality app developed by IKEA is an ideal example of its innovations, it helps a customer to see how a particular IKEA furniture looks like in a home. Another example of IKEA innovation is the new type of joint named Wedge Dowel that helps the customers to assemble wooden furniture without screws, bolts, or other equipment.

B.

Operations, finance, marketing, and human resources are the four major business functions of IKEA. When it comes to operations, IKEA tries to understand the needs of customers and provides products that satisfy their needs. In the case of finance, IKEA ensures profit by satisfying the need of customers. In the case of human resources, IKEA provides a diverse work environment. All the workers in the company are given an opportunity to learn and grow. The Tack program of IKEA allows the employees to receive an additional contribution to the pension fund. It also has a bonus program for all its employees. In the case of marketing, IKEA depends more on its websites, publications, brochures for the marketing of its products. The newly invented Augmented Reality app is also facilitating the marketing function.