IKEA : Marketing strategy and challenges of internationalization

In the 1940s, the furniture’s distribution market was split up into cartels with strong barriers to entry in order to limit competition. Furniture’s prices were high and also reserved to well-heeled households. Retailers were especially located in downtowns and there were no way to target humble households because of high costs of such a localization. But, after WWII, new socio-demographic trends grew up, such as baby boom and new needs appeared. That is why in 1943, a 17 years old Swedish man, Ingvar Kamprad decided to launch IKEA, named as an acronym of his name and his address (Elmtaryd, the farm where he grew up and Agunnaryd, his home parish). He had the wonderful idea of democratizing the furniture’s market with a large line of products and very low prices. IKEA became the first category killer of the furniture’s market. Now, IKEA, which is an international home products Swedish Corporation, designs and sells ready-to-assemble furniture, appliances and home accessories. As of May 2010, the IKEA group itself own 276 stores in 25 countries and other 37 stores are owned and run by franchisees outside the IKEA group in 16 countries. The company is from now on the world’s largest furniture retailer. What is its marketing strategy ? What about the internationalization’s strategy of the group ? And especially, what are the opportunities in Japan ? What is at stake in this new market ? Are Japanese people ready to accept this new type of furniture’s retailer ? We will first see the marketing strategy of the group (I), then the internationalization of the group (II) and finally the Japanese case (III).

According to the corporate website, “The IKEA vision is to create a better everyday life for many people. We make it possible by offering a wide range of well-designed, functional home furnishing products at price so low that as many people can afford them”. Indeed, IKEA has developed a very