Question

IKEA uses social media such as Pinterest, Twitter, and Google+ to connect with local customers in many of its markets. By engaging customers with interesting and use- ful content, the retailer builds brand awareness, polishes its image, and promotes selected products or categories. Its U.S. Facebook page, with more than 3.2 million likes, features product photos, store news, and links to nonprofit groups that IKEA supports, such as UNICEF. Its U.S. Twitter account, named @DesignByIKEA, posts a variety of tweets and Vine videos focusing on seasonal merchandise and solutions to common problems like storage and organization. Although IKEA has traditionally concentrated on brick- and-mortar retailing, it is upgrading its e-commerce tech- nology and its logistics to accommodate customers who like to browse and buy with a click. The retailer now makes 70 percent of its products available for online purchase and delivery in 13 countries. Within just a few years, all of IKEA’s products will be included in its e-commerce offerings.42

Questions for Discussion 1. Would you recommend that IKEA continue printing and mailing catalogs or should it switch to an online-only catalog? Explain your answer. 2. If you were in charge of choosing IKEA’s next U.S. store location, what factors would you consider in making your decision? 3. How much channel power does IKEA possess? What are the implications for the role it plays in the channel? 4. What are the main logistical issues IKEA must address to be able to make 100 percent of its products available for online purchase and delivery?

Answer 1

Answer:- I would recommend Ikea to continue to print and mail catalogues due to below stated reasons:-

1. Push strategy: The customers who are not internet savvy or still want to go to real stores, in these cases, the company will be requiring print catalogues would serve the purpose better.

2. Convenience: The customers can read catalogue whenever they find the time.

3. Stickiness: They are sticky in comparison to the online material as they are present in the house unless throwing away.

Answer:- The following factors will be considering while selecting next location:-

Demographics: These are the most important traits of the customers, The company can gain a lot of information about its target customers and thus can select the location near to the target market.

• Style of Operation: Depending upon the style of operation i.e. formal, elegant, casual or kicked-back, the business will select the store location.

• Building's infrastructure: There may not be suitable infrastructure for contemporary operations. In the old buildings. It is important to have the buildings which can fulfil the present and future needs.

• Other Costs: Rent can be considered as a major portion of ongoing facility expenses so, consider it carefully along with other expenses

Answer:- In 2014, the group income of IKEA was 3.3 billion EURO. With the stronger performance in China and North America, the company continued to have better conditions. The company is experiencing increased sales in existing stores and also in the opening of new stores and in e-commerce. In case of retailing, the company is selling almost 70% of its products online and covering 13 countries. Different units are developed within IKEA which has different operations and roles. The company has more than 590 million visitors per year all over the world and offers 9500 different products. It has more than 1220 suppliers in 55 countries and manufacturers almost 65% of its product in Europe.