Last Updated 10 May 2020

Key Challenges Facing Brand Ikea

Words 365 (1 page)
Views 182

For the past years, Ikea's cultural branding stands out from other competitors because it blends value into their fashionably designed furniture to ensure that modern household goods are made affordable. However, rising prices in raw material and transport cost has forced Ikea’s first price hike in five years. Furthermore, with competitors such as Wal-mart, Carrefour and Tesco’s expansion into furniture and furnishings, and following Ikea’s similar approach of low-priced strategy, it has certainly presented a challenge for Ikea in terms of maintaining its differentiation (Euromonitor 2009).

Ikea being able to maintain or improve its corporate image through social and environmental responsibility is a challenge as well, as it is essential for customers to have positive association to the brand with trust and shared values. For instance, customers that are concerned with the environment will be delighted to purchase Ikea products that are recyclable, made from recycled materials, or both (Euromonitor 2009).

Recent economic crisis has dampened the world’s economy including Western Europe, slowing most of their GDP growth. As a result, it has exposed Ikea’s over reliance on Western Europe market for its growth, whereby its 10 largest markets accounted for 75% of its sales in 2008, and out of the 10 largest markets, 8 were from Western Europe (Euromonitor 2009). In addition, as mentioned previously, Ikea’s major markets are faced with maturity and fierce price competition. Therefore, Ikea’s brand and growth sustainability in its major markets is one of the key challenges, so as to ensure the brand does not fade away in the next decade.

Order custom essay Key Challenges Facing Brand Ikea with free plagiarism report

GET ORIGINAL PAPER

The target group in developed market are mainly made up of broad consumer base as compared to emerging markets which is pretty much different, targeting growing urban middle class. Hence, it is a challenge for Ikea lock down the growing urban middle class in order to secure a reasonable share in these markets (Euromonitor 2009). When it comes to Ikea moving into emerging market, it is a challenge to customise the local needs without compromising the brand’s concept or values. For instance, in China, customers are not used to the DIY idea; as a result, more focus on assembly service is allocated to its assembly services as compared to Western markets(Euromonitor 2009).

Key Challenges Facing Brand Ikea essay

This essay was written by a fellow student. You can use it as an example when writing your own essay or use it as a source, but you need cite it.

Get professional help and free up your time for more important courses

Starting from 3 hours delivery 450+ experts on 30 subjects
get essay help 124  experts online

Did you know that we have over 70,000 essays on 3,000 topics in our database?

Cite this page

Explore how the human body functions as one unit in harmony in order to life

Key Challenges Facing Brand Ikea. (2018, Jan 02). Retrieved from https://phdessay.com/key-challenges-facing-brand-ikea/

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Save time and let our verified experts help you.

Hire writer