IKEA_Marketing_Analysis_Project

IKEABulgariaIKEAassignmentPreparedby:GeorgeGeorgievEvgeniyaMinchevaZornicaRashevaExecutiveSummaryFurnitureremainsthelargesthomefurnishingsandhousewaressector.Bulgaria’sfurnitureindustryisadynamicallydevelopingsectorinthepastfewyears.Itiswellknownthatmostfurniturecompaniesinthecountryarebasedonstrongtraditionsandgoodcorrelationbetweenpriceandquality,but(asinmanyothercountries),althoughthemajorpartofthecustomersontheinnermarketpreferBulgarian-madefurniture,highpricesareseenasasignofhighquality,somostfurniturepiecesproducedbythecompaniesareconsideredhighpricedandhardlyaffordableforthemajorityofpeople.IKEAwasfoundedin1943byIngvarKamprad.Itstartedasaplacewhereapersoncanbuypens,pictureframes,watches,etc.andwiththetimeturnedtobetheworld’slargestfurnitureretailer.Oneofthemainaimsoftheorganisationinclude:keepingcostslowandassistcustomersandproductscombininggoodquality,durabilityandfunctionalityandthisrepliestotheneedsoftheBulgariancustomer.TroughanalyzingthesituationwithinthecountryandIKEAthedecisiontoopenanIKEAstoreinSofiawastaken.APESTanalysiswasheldtorecognizeallthefactorsthatmighthaveaneffectonthecompanyenteringtheBulgarianmarket.ThecurrentsituationofthefurnitureindustrywasanalyzedandtroughthatthetargetmarketandthepositioningofIKEAwereidentified.Thecompetitors’andcustomers’analyzesthatweremadeshowwhatIKEAhastoadapttowhenenteringthemarketofthecountry.TheInternalandSWOTanalysisshowwhyIKEAhastheopportunitytoenter,developandgainamarketshareintheBulgarianfurnituresector.TheMarketwasresearchedandbasedonallthatthemarketingmixstrategiesweredeveloped.AndaPERTanalysiswasalsoheldtoshowhowthedecisionsmadewillbeimplemented.HistoryofIKEAIKEAwasfoundedinÄlmhult,Sweden,in1943byIngvarKamprad.Hefoundedthecompanyattheageof17.IKEAisanacronymincidentallysimilartotheGreekwordοικία[oikia]whichmeans(home)andtotheFinnishwordoikea(correct,right),butactuallywasoriginallyanabbreviationforIngvarKampradElmtarydAgunnaryd.IngvarKampradElmtarydAgunnarydcomesfromtheaddresswhereIngvarKampradstartedthecompanyIKEAinitially.Originally,IKEAsoldpens,wallets,pictureframes,tablerunners,watches,jewelryandnylonstockingsorpracticallyanythingKampraddecidedisaneededproductonreducedprice.FurniturewasfirstaddedtotheIKEAproductrangein1948.In1955,IKEAbegantodesignitsownfurniture.Thecompanymottois:AffordableSolutionsforBetterLiving.Atfirst,Kampradsoldhisgoodsoutofhishomeandbymailorder.LaterastorewasopenedinthetownofÄlmhult.ItwasalsothelocationforthefirstIKEAwarehousestorewhichcametoserveasamodelforIKEAestablishmentselsewhere.OnMarch23,1963,thefirststoreoutsideSwedenwasopenedinAsker,aNorwegianmunicipalityoutsideOslo.IKEAhasgrownstepbystepintotheworld’slargestfurnitureretailer.Thereare202Ikeastoresin32countries.Ofthese,180storesbelongtotheIkeaGroup.Theremaining22storesareownedandrunbyfranchiseesoutsidetheIkeaGroup.ProductsAvailableIKEA’sproductsareusedfromthecustomersforthewholefurnishingofahome.Customersmayfindeverythingtheyneedandbasicallyfurnishtheirhouses“fromtheforkstothechairs”.Theproductsavailableare:Storagefurniture;TVsolutions;Smallstorages;Sofasandarmchairs;Tablesanddesks;Chairsandlighting;Decorationandmirrors;Floors;Textilesandrugs;Bedsandmattresses;Cookingandeating;Furniturecareandhardware;Kitchencabinetsandappliances;Bathroomfurniture;Clothesstorages;Safetyproducts;Children’slineofproductsPESTAnalysisPoliticalFactors:-ThepoliticalenvironmentinBulgariaisconstantlychangingduetofinancialinstabilityandchangesinlowsandregulationsthatarecloselyrelatedtotheeconomicdevelopmentandtradepolicyinthecountry.-LatelytheBulgariangovernmentisfamouswithitsinadequatedecisionswhichdirectlyreflectonthebusinessenvironmentinthecountry.Thefurnitureindustryaswellasmanyothersishandicappedbythehighvalueaddedtax(20%VAT);-Anofficialcodeofethicsisconductedbythegovernment;howeveritisnotwidelyadoptedbythecompaniesandorganizationsinthecountry.TheBulgariangovernmentdoesnotforcethecompanieswithinthecountrytofollowtheethiccode;-Thegovernmentpolicy’sontheeconomyischangingconstantlyduetothefactthatBulgariajoinedEUin2007.thereasonforthisisthatoureconomyisstrivingtoreachthelevelofotherEuropeancountries’economies;-Thegovernmentistryingtoremainneutralwhenconsideringandreligiousissuesinthecountry.ItisstrivingtoprotecttheofficialreligioninBulgariawhichisOrthodoxChristianity.Nonetheless,thegovernmentallowstheexistenceofotherreligionsinthecountryanditistryingtokeepthetolerancebetweenreligions.Thereislackofgovernment’sinvolvementintheprotectionanddevelopmentoftheculture-BulgariaisamemberoftheEuropeanUnionandamemberofWTO(WorldTradeOrganization);EconomicFactors-AccordingtotheEuropeancommissionstatement,therealannualGDPpercapitaisacceleratingforthepasttwoyears.In2006,theGDPwas6.1%whichwasalmostdoubletheGDPofEU.In2007itreached6.5%andfor2008itisexpectedtotop7%.Thelevelofemploymenthasbeenrisingalsoforthepasttwoyears.In2007itreached9%percapitaanditisexpectedtoreach7%inthefirsthalfof2009.In2007,thelevelofinflationhasdroptdawnto4.1%.However,accordingtothedatagatheredbytheNationalStatisticIn