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Table of Contents
Introduction .................................................................................................................................................. 3
Elements of Retail Mix .................................................................................................................................. 4
Location of the Store................................................................................................................................. 4
Merchandise Range and Assortment Planning ......................................................................................... 4
Marketing Communication ....................................................................................................................... 5
Formats and Locations .............................................................................................................................. 6
Pricing Strategy and Tactics ...................................................................................................................... 7
Customer Service and Facilitating Services............................................................................................... 7
Retail Mix for Sustainable Competitive Advantage ...................................................................................... 8
Challenges to Continued International Growth .......................................................................................... 10
PEST Factors ............................................................................................................................................ 10
The competitive context ......................................................................................................................... 11
Growth Strategy ...................................................................................................................................... 11
Conclusion ................................................................................................................................................... 12
Harvard Referencing ................................................................................................................................... 12

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Introduction
Nowadays market is changing all over the world. Kotler and Armstrong (2004:15) emphasize the shift
that has been made from local to regional, regional to national, national to international and
international to global. Constantly increasing development in transport, communication, has reduced
trade barriers. International trading, which was once considered a luxury, has become a need in several
sectors. Globalization has carried out an innovative ways of doing business now. It has created
opportunities for organizations to retail in more than one country (Kotler & Armstrong, 2004:17).
A proper planned and integrated retail mix will deliver a dedicated position in the marketplace and
differentiate your retail establishment from that of your defined competition. The essentials of
proposed competitive advantage should guide in the design of retail mix.
IKEA is a private international furniture manufacturer and they are widely known for their low prices and
unique style. IKEA is a Swedish company. IKEA is the worlds largest furniture store .The store was
created by A Nazi Sympathizer. Founder Ingvar Kamprad founded IKEA in 1943. IKEA is the retail
company that is present in 41 countries around the world. Although there are 301 of IKEA stores in 41
countries, IKEA group owns 247 IKEA stores in 24 countries, the rest being managed by franchisees in 30
countries.
IKEA vision: To create a better everyday life for the many people, their basic idea is to offer a wide
range of well-designed, home furnishing products at low prices so as many people will be able to afford
them.
One of the most important things that make IKEA stand out among global retailers is the alleged standardized approach to every market it enters. It looks and operates the same in every market
markets.
COUNTRY TAKEN FOR ASSIGNMENT: United Arab Emirates.
Regardless of the fact that IKEA has displayed their skill to go in new marketplaces, the UAE marketplace
is unlike supplementary marketplaces because of its disparate and exceptional culture. IKEA, this
exceptional believed store is fully outfitted alongside above 8500 residence furnishing produce, diner
and playground for kids. Previously placed inside the Marina Mall convoluted, the store was advanced to

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Yas Island mainly due to manipulated room for expansion. IKEA main competitors in UAE are Home R us,
Home center, 2XL Furniture & Home Dcor, ID design and Grand Royal Furniture Trading LLC.

Elements of Retail Mix

Barnes (2003) states that various forms of value exists, firms can create a type of value contributing to
functional customer relationships based on: access, convenience, and timeliness, and product quality,
value for money, competency and communications, among others. He retail mix consists a number of
key decision variables which significantly impacts on the overall marketing strategy of a retailer (Levy
and Weitz, 2011). The elements of the marketing mix can be presented as follows:

Location of the Store

There are only two stores in United Arab Emirates; one is in Abu Dhabi and in Dubai. IKEA Abu Dhabi
store is located in YAS Island. Its Effortless to reach with both car or bus service. IKEA Yas Island is the
first retail outlet to open on Yas Island. The 33,000sqm store with a total sales area of 19,150sqm is the
largest IKEA store in the MENA region and it is dedicated childcare's play area where kids can be
themselves under expert supervision, and over 1400 parking space, it promise to provide a great
shopping experience. According to Deloitte, et al. (2010), IKEA was the 30th largest retailer in the world
in 2008.Previously located within the Marina Mall complex, the store was moved to Yas Island primarily
due to limited room for expansion. In Dubai they are revitalizing the Store to enhance and to improve
their customers shopping experience. When it comes to in store graphics the graphics the availability of
food and beverages and a baby-sitting service is something that IKEA offers its customers.

Merchandise Range and Assortment Planning

Hart and Tzokas (2000) described that merchandise range

of product which a merchandise

retailer keeps in their stores to sell. Merchandise is a board marketing attention and has to do
alongside allocating jointly an attractive assortment of produce for the customer to buy in the store. The
base of the marketing strategy is the merchandise, i.e., the product range and the benefits of the

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products.
The width of IKEA product assortment includes: all kind furniture, crockery, mirrors, children-furniture,
cooking-accessories, matters, clothes-storages, decoration, kitchen, appliance, lighting and fittings. They
have over 1000 different products.
Emiratis see IKEA products as original and not traditional as in emirates local retail stores have. Huge
and fancy furniture are for example traditional (whereas new shaped and little weighted are nontradition).
Here in UAE IKEA you will find inspiration from over 55 smart room-set solutions, and three complete
homes. You will find everything you need under one roof to transform your home into the most
important place in the world. Overall the assortments in UAE stores are not different from anywhere
else in the IKEA world. The beds sold at IKEA are smaller than the normal UAE size because mostly
people live in apartments and only local in live in big villa.
IKEA offer more supportable products at low prices, they are always examining what they do and how
they will do it at every stage of an IKEA products life. They are always in take opportunities to
contribute to develop themselves for people and environment. They make improvements at every stage
and adding them to a list a never-ending list.
IKEA is no exemption from this company concept. It seems that IKEA itself, is trying to cover all phases in
the worth added wood and furniture chain. At the same time to tie in suppliers alongside worth fixing
contracts.

Marketing Communication

Effective communication at IKEA Communication is the important factor to a successful business

because everything is carried out accurately and operates smoothly, being well organized too. As
communication is the way in which the customers finds out about IKEA and its activities such
promotional or introducing new products. IKEA have run many different ads in UAE, in TV, newspapers
and in print
IKEA covers all marketing/retail communications areas and has advertising campaigns all around UAE.

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Sustainability is an IKEA priority: IKEA is trying to change their ways to do less harm to the environment.
IKEA has made the crucial decision to emphasis its power inside on constant improvements that prop
the environmental strategy and plan. Therefore, external contact of the plan's implementation is made
across "proving results.
IKEA has made the strategic decision to focus its energy internally on continuous improvements that
support the environmental policy and plan. Therefore, external communication of the plan's
implementation is made through "proving results.
Communication reflects IKEA benefits both visually and in tone of voice, so marketing and contact
coworkers contain fine art managers and copywriters, inside designers and undertaking leaders. Jointly
they work alongside the IKEA catalog, IKEA websites, publications, brochures, and publicizing, inner
contact and area relations.
Support in the strategic PR & Communication for IKEA
They involve in crucial decisions in running PR & Contact subjects, in close co-operation alongside the
associates in the department. Responsible for establishment issues from a communication perspective,
and being a member of the Establishment Steering Group Responsible for crisis training for
management groups, the crisis manual and be a member of the National Crisis Group/ERT.

Formats and Locations

Having their items packaged and stored in such a manner allows customers to immediately take their
purchases with them, eliminating any delivery costs. IKEAs product line is quite extensive, including
every possible item necessary for the home. IKEA's main business relates to its retail stores. Many of
these stores are in out-of-town locations and do not benefit from the footfall of primary and secondary
locations. The stores themselves are very large.
IKEA stores are usually very large blue buildings with yellow colored written IKEA and few windows.
They are often designed in a one-way layout, leading customers counter clockwise along what IKEA calls
"the long natural way" designed to encourage the customer to see the store in its entirety. Or IKEA store
are design just like a maze because shoppers will find hard to escape from store and a disorientated,

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IKEA customer feels compelled to pick up a few extra impulse purchases.

Pricing Strategy and Tactics

IKEA vision is to have low prices and so IKEA products are available to everyone. Its mission statement
indicates a cost leadership strategy. IKEA use Porters generic strategies and they are also applying an
indirect differentiation strategy due to its different way of incorporating the customer in the value
chain. This blend indicates a focus strategy.
IKEA mainly targets people who want value at a low price but are willing to do a bit of work. It can
provide quality furniture at low price to its customers by making some tradeoffs.
IKEA uses a self-service model based Instead of having sales people attending customers
IKEA design its own low-cost-modular, ready-to-assemble-furniture because they dont rely on third
party manufacture as they will cost more.
Items are endowed to clients in flat-packed form, that aftermath in an expansive scope of supply shackle
contributions. The Flat package reduces the price of shipping, storing, assembly and assembling. It
additionally provides larger transportation capacity and warehouse space.
IKEA offers products that are available in all IKEA stores all over the world. Price promotions are
available at the IKEA store at any given time. IKEA is not only market leader in the furniture industry in
all over world, but also low-cost leader.

Customer Service and Facilitating Services

IKEA positions itself in the eye of the consumer; nowadays they have been trying to target the smallbusiness market. IKEA is hoping to offer planning tools to small businesses to help them to design their
space. IKEA has already begun displaying furnishings geared towards small businesses in their stores.
Their goal is to target firms of all kinds, ranging from businesses such as service providers working out of
small offices, beauty salons, bookstores etc.
Self-services system is offered by IKEA. When customers themselves go and pick up the products, they
are able to get access to the product in conjunction with the purchase. You can also arrange for home

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delivery. The delivery fee is regardless of the weight or size of the order. Their delivery charges start
from AED 200 which is $59.
IKEA also offer Total Project Management, Delivery, Installation and more. This is especially done for
kitchen services.
Home Furnishing Advice: There are some experts who give free professional advice for your home
furnishing and dcor. They give suggestions and help you out and strategized the space youve always
wanted, from beginning to end.
IKEA Gift Cards: Just select the worth of the card and your friends or relations are free to become
precisely what they desire. IKEA gift cards are easy to use.
IKEA launches loyalty program in UAE: IKEA in UAE is member of the Al Futtaim group of companies and
they launched IKEA Family customer loyalty program. It is accompanied by the launch of the IKEA
Family range offering around 100 exciting new products in the areas of travel, safety and relaxation.
Smland: IKEA dedicated childcare's play area where kids can be themselves under expert supervision.
Parents drop off their children at a gate to the playground, and pick them up after they finish them
shopping.
Sewing service: Choose of your favorite IKEA wide range of fabrics and we can take care of the sewing
for a small extra charge.
Restaurant: Every store includes a restaurant serving food. They usually follow Swedish food with local
food also. As UAE is a Muslim country they follow Halal food + traditional food also.

Retail Mix for Sustainable Competitive Advantage

IKEAs superiority is in their unique style and quality of their product. This is the main key which is
leading IKEAs competitors to pay attention to requirements and market trends. IKEA main competitive
advantages is its talent to know the current trends and what their customer desire. IKEA are in business
world from long time, they know their customers well. They are already operating in 41 countries before
operating in a new country they does lot of research to know customers culture tradition and tastes so

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they can provide the product which will match customer requirements and demand. This raises trade for
IKEA, customer satisfaction and gives IKEA a competitive advantage over its competitors in the UAE.
Agreeing to the research findings in this report, IKEA has outperformed their competitors.
Location of the Store
If we compare store layout and design with IKEAs competitors than IKEA is totally different from others.
From structure of building to services provide to products in store. This is most successful part of retail
mix of IKEA. They want their customers to feel better and enjoy their shopping. Each and every part of
store is focused.
Formats and Locations
Usually and even in UAE IKEA stores are located very far from city center because big space needed.
Customers generally plan first make to visit store. Stores are too big that sometimes customers do get
lost in the stores.
Merchandise Range and Assortment Planning
The product range and the prices of the products are affordable. These are supposed to be the same
with very small adaptions for all regarding countries in all stores. IKEA offers wide range of variety to
their customers. IKEA chose a different way which is stand on the side of everybody. IKEA also does a
good job in environment protection. Competitors are always looking forward to widening the depth and
breadth of IKEA products. Competitors are always looking forward to widening the depth and breadth of
IKEA products.
Marketing Communication
They are worldwide known brand. They always update their customers with meaningful advisement and
other promotional strategies. IKEA is dominated by the catalogue; a marketing instrument that is
unusual for an international retailer but at the core of IKEAs marketing strategy. IKEA catalogue copies
are published more than bible (FACT). They have online too and there is an app also in iTunes. They
discover new and innovative idea to attract new and regular customers.

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Pricing strategy and tactics

Prices on products are supposed to be considered low in comparison to what consumers find in
competing stores: the aim is to deliver high value at low price. IKEA use two strategies: opportunity to
match differences in actual costs and a competitive advantage on the market. Usually IKEA follows the
idea of having low price rate, so it can be accessible for everyone. This strategy has been profitable and
beneficial for the company as well as the customers. IKEA can afford to be so cheap is only because the
bulk of their furniture is made of such low quality materials
Customer Service and Facilitating Service
IKEA customer service and facilitating service is admirable. They are actually well-known their services.
Creative heads of IKEA are always coming up with new challenges and fulfil their goals. IKEA is offering
many services like restaurant, sewing service etc. which most of IKEA competitors dont have benefit.
Appreciating that they are totally customer-oriented and they take they customers in all aspects. This
makes IKEA different from other retailers.
Subsequently reviewing the overall retail mix, IKEA is performing smartly and continuing maintain a
strong image in the UAE market and among their competitors. This strategic decision has enabled IKEA
to maintain a competitive advantage, and earn above average returns due to leadership in the market.

Challenges to Continued International Growth

PEST Factors
Political: IKEA is successful in both domestic and international business. Political stability of any country
can affects any businesses. In 2008 whole-world was hit by a shock of recession. UAE was also affected.
Political situation drastically transformed and this affected the buyer-supplier relationship IKEA. The
political system is different in UAE. As it is a tax free country and its easy to operate.
Economical: Adopting different kind of strategies that will seize an appeal on their customers and aiming
to own the consumer loyalty. IKEA is largest store in the MENA region. They are successful in adapting to
the fluctuating economic environment internationally. For example If IKEA wants to expand in Asia.

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Countries over there like PAKISTAN & INDIA are less economically stable as compared to the UAE. IKEA
has to adapt to the different inflation, interest rate, taxation and exchange rate levels.
Social factor: IKEA contributed abundantly in the society as they provide opportunities in people and the
employees are entitled in different benefits such as insurance and pensions. IKEA provide more high
quality and unique style furniture at low prices.
IKEA Foundation helps thousands of children in Pakistan find a route out of child labor.
Technological: The IKEA utilized quality knowledge and arrangements to advance the shorter queues,
proper arranging, pursuing and interchange outlines, and staffing. It aims to be extra productive and
institute operative preferences.

The competitive context

IKEA operated in an enormously competitive industry, describe AS much other low priced, good quality
furniture. Given the attractiveness of the (Do-it-yourself) furniture industry, IKEA continues to compete
and grow in all market of the world. Recession has affected furniture also. This was the hardest hit in the
industry then other sector. IKEA competitors are trying to increase market share. Factors such as
monopolies and oligopolies also will make it hard for IKEA to successfully establish them.

Growth Strategy
IKEA vision is to create a better life for people. They offer home furnishings at such low prices that as
many people can afford to buy them. IKEA had significant increases in raw material prices, and able to
offer lower prices. The outcome has been higher market share in almost every country they do business.
To strength their development, IKEA had to do four things: lowering operational prices, rising volume,
develop an even better-functioning supply chain and inspiring workers. They always desire come to be
even larger at rising volume, because that permits them to lower their price of goods and working costs.
To raise volume, they had to come to be larger at grasping extra people and products. IKEA utilized the
recession to strength its company and unlike most retailers, reinvest in itself instead of cutting prices
and lying off employees.

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Conclusion
IKEA is a prosperous globe brand. In order to make its company prosperous IKEA ought to gaze into both
its inner and external environmental situation. These will scrutiny its menaces and opportunities. After
we gaze into IKEA they clarify how they are keen concerning the people and eco-friendly environment.
IKEA as finished merges the factor of design, price competent and environmental approachable uses of
the resources. It considers the sustainable factor all jointly for clients, earth and the business.

Harvard Referencing

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Abhijeet S, 2nd December 2010, Pest Analysis on

IKEA,http://www.managementparadise.com/forums/principles-management-p-o-m/208720-pestanalysis-IKEA.html 29/04/2014

John Duudovskiy, July 28, 2012, IKEA PEST Analysis, http://research-methodology.net/IKEA-pestanalysis/ 29/04/2014

Sikandar Khan July 02 2012, IKEA http://www.slideshare.net/SikandarKhan3/IKEA-13511543

29/04/ 2014

Deniz Caglar, Marco Kesteloo, and Art Kleiner, 7 may 2012, How IKEA Reassembled Its Growth
Strategy http://www.strategy-business.com/article/00111?pg=all 29/04/2014

Eat strategy, 2011, IKEAs Growth Strategy http://eatstrategy.com/IKEAs-growth-strategy/

29/04/2014

UK essay, 2012 A SWOT and PESTEL analysis of IKEA,

http://www.ukessays.com/essays/marketing/a-swot-and-pestel-analysis-of-IKEA-marketingessay.php#ixzz30Tj30Hxe 29/04/2014

Shubro Barua Jul 13, 2011 Case Analysis: IKEA http://www.scribd.com/doc/59951004/CaseAnalysis-IKEA, 30/04/2014

UK essay, 2012 report on Organisational change and multiculturalism in IKEA

http://www.ukessays.com/essays/business/report-on-organisational-change-and-multiculturalism-inIKEA-business-essay.php 30/04/2014

Bhavya Misra, 22 February 2014 How IKEA uses social media to emerge a marketing success
http://retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/how-IKEAuses-social-media-to-emerge-a-marketing-success/30857725 30/04/2014

TradeArabia News Service January 22, 2014 IKEA launches loyalty programme in UAE
http://www.tradearabia.com/news/MISC_250362.html 30/04/2014

GULF TALENT 2012 Retail Sales Representatives

IKEAhttps://www.gulftalent.com/home/Retail-Sales-Representatives-IKEA-jobs-in-Dubai-UAE136969.html 30/04/2014

Lewis, Viky, May 2012 IKEA PS COLLECTION2012

http://www.IKEA.com/ms/en_GB/pdf/IKEAps2012/IKEA_PR_PS_FY12_UK_WEB.pdf 30/04/2014

Heidi Owens, 2012 A Natural Step Case Study http://www.naturalstep.org/en/usa/IKEA,

30/04/2014

JAMES TOZER, 24 January 2011, why shoppers find it so hard to escape from IKEA: Flatpack
furniture stores are 'designed just like a maze, http://www.dailymail.co.uk/femail/article-1349831/IKEA-

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design-stores-mazes-stop-shoppers-leaving-end-buying-more.html#ixzz30ToLRwxw 30th April 2014

Osama Albarrak Jan 31, 2012 IKEA Strategic case study & analysis
http://www.slideshare.net/OsamaAlbarrak/IKEA-strategic-case-study 30 April 2014

Strategic management Insight 17 May 2013 SWOT analysis of IKEA

http://www.strategicmanagementinsight.com/swot-analyses/IKEA-swot-analysis.html 29th April 2014

Kat shanahan June 23, 2012 IKEA Integrated Marketing Communications Campaign
http://kshanahan.com/kShanahan_610_Final.pdf 30th April 2014

Valerie Chu, Alka Girdhar and Rajal Sood, 21 July 2013, IKEA growth in China,
http://businesstoday.intoday.in/story/how-IKEA-adapted-its-strategies-to-expand-inchina/1/196322.html, 30th April 2014

Jackdugher, 11 September, how does IKEA benefit from economies of scales?

http://jackdugher.wordpress.com/2012/09/11/how-does-IKEA-benefit-from-economies-of-scale/ 30th
April 2014

Suzanne vangilder. 2013 manufacturing IKEA style,

http://www.surfaceandpanel.com/articles/cool/manufacturing-IKEA-style 30th April 2014

Gunde Odgaard, BAT-Kartellet, Denmark IKEA: An investigation into the world of how The IKEA
Group is organised, itsactivities and how IKEA has developed its business strategy
http://www.batkartellet.dk/pictures_org/IKEA_maj1996.pdf 30th April 2014

Viernes, 8 de marzo de 2013 IKEA: more than low

priceshttp://thebusinesstrategy.blogspot.ae/2013/03/IKEA-more-than-low-prices.html 30th April 2014

Rebecka Isaksson, 2006 IKEA experience http://epubl.ltu.se/1402-1773/2006/162/LTU-CUPP06162-SE.pdf 30th April 2014

Paula Gronvius, Clara My Lernborg 2009 LIKEA and CSR

http://arc.hhs.se/download.aspx?MediumId=656 29 April 2014

Leif Linnskog June 4, 2008 Internationalization of IKEA in the Japanese market and Chinese
markets http://mdh.diva-portal.org/smash/get/diva2:121496/FULLTEXT01.pdf 30 April 2014

ALEXANDRA STOLBA 2009 IKEAs failure and success on the Japanese market
http://pure.au.dk/portal/files/7566/Afhandlinger 30th April 2014

Zhi li June 2010 the competitive advantage of IKEA and IKEA in chian http://hig.divaportal.org/smash/get/diva2:326248/FULLTEXT01.pdf 30th April 2014

Ulf Johansson 2008 standardized marketing strategies in retailing? IKEAs marketing strategies in
China, Sweden and the UK www.researchgate.net/...Standardized_marketing_strategies_in_retailing_...

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30th April 2014

Anthony Landry November 2012IKEA: Product, Pricing, and Pass-Through*

http://www.dallasfed.org/assets/documents/institute/wpapers/2012/0132.pdf 30th April 2014

Susanne Hertz Hamid Jafari may 2011Forecasting System at IKEA http://www.divaportal.org/smash/get/diva2:437863/FULLTEXT01.pdf 30th April 2014

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