Marketing Strengths in IKEA PDF

University
Marketing 301
Name

Table of Contents
Part 1 2
Question 1 2
Marketing Strengths 3
Marketing Weakness 3
Strategy 3
Question 2 3
Question 3 4
Question 7 4
Question 8 6
Part 2 9
1. SWOT Analysis 9
2. Internal and External Factors 9
3. Ways in which IKEA has Managed to Minimize Threats 9
4. Usage of Information in SWOT Analysis 10
5. SWOT Analysis of Starbucks 10
Strengths: 10
Weaknesses: 11
Opportunities: 11
Threats: 11
References 12
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Part 1
Question 1
The organization that has been chosen in this context is Starbucks. Starbucks is one of the most
recognizable and popular brand names in the world because it is the world’s largest coffeehouse
chain having branches all over the world. The organization sustains its reputation through a
sturdy marketing strategy that focuses on product quality and customer service.
Marketing Strengths
● The major strength of Starbucks is the quality of its products. It uses high quality raw
materials in order to produce the best tasting coffee in the market.
● The cafes are located in prime and populous locations, which can be easily accessed by
consumers. Apart from that, Starbucks also maintains an aesthetic ambiance inside the
cafes so that the customers can relax while they have the coffee (Haskova, 2015).
Marketing Weakness
● The prices of its products exceed the prevailing rates in the market. Therefore, there shall
be a lot of customers who shall pay a lesser price for the coffee they can get from local
cafes or other competitors (Gelbrich, Roschk and Gafeeva, 2016).
● Starbucks specializes on a product, which can be easily imitated, and therefore, there can
be a lot of substitutes available in the market at cheaper prices.
Strategy
Starbucks’ strategy focuses on quality and customer service that shall be instrumental in securing
the customers loyalty. It has expanded into Asian markets in order to operate in the emerging
consumerist economies. However, there are certain factors that can seriously put Starbucks in a
disadvantageous position like the availability of substitutes.
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Question 2
Starbucks has positioned itself in the market as a premium coffee brand that offers the best
quality coffee to the customers. It ensures that the quality of its coffee is superior the ones
available in the market. Therefore, customers shall be more likely to have their coffee from
Starbucks. Coupled with the high quality of its products Starbucks also boasts of an excellent
store environment, which makes the cafe-going experience of the customers truly relaxing and
enjoyable. It can be observed that there can be innumerable coffee shops in a certain location but
none can offer the value proposition that Starbucks is offering (Harrington, Ottenbacher, and
Fauser, 2017).
However, to maintain a good public image Starbucks is also very stringent about its ethical
standards. Apart from offering value to its customers, it helps its employees in various ways like
providing for their employees fees for education (Marques, Camillo and Holt, 2015). Therefore,
Starbucks’ social responsibility forms an integral part of its marketing strategy. This integrative
approach helps the brand to out-compete other brands selling similar products.
Question 3
Starbucks seeks to maintain a synchronous relationship between its marketing objectives and
corporate objectives. This implies that the marketing strategy is devised in such a manner that it
aids in the fulfillment of the long term corporate goals. Starbucks has a glorious corporate
mission, which is to “to inspire and nurture the human spirit - one person, one cup, one
neighborhood at a time” (Real and Percell, 2018). Therefore, Starbucks does not merely aim at
earning profits out of selling coffee. Rather, it seeks to imprint a lasting effect on the planet
through carrying out business. Therefore, apart from ensuring its standards of product quality, it
also indulges in various social activities for the benefits of employees and society. This helps to
increase the reputation of the brand as one, which seeks to promote the betterment of society.
Starbucks also strives to operate in a transparent and humane manner while interacting with
customers, employees and suppliers alike. It also actively invests in community building
programs as a gesture to acknowledge the gratitude that it has for customers who let it earn so
much profits (Ottman, 2017).
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Question 7
While on one hand gaming consoles like the Microsoft Xbox 360 or the Nintendo Wii is offered
in moderate prices, Sony’s premium console Playstation 3 has a very high price compared to the
competitors. While on one hand, looking at the standard prices of gaming consoles available in
the market the rate charged by Sony would seem to be a bit too unjustified to the average
consumer. Various ethical issues about the legitimacy of pricing can be brought into the domain
and Sony’s pricing strategy can be analyzed through the perspectives offered by ethical
arguments. For example, the organization can be accused to being greedy and being interested
only in profit maximization. However, such arguments should only be brought in after studying
the value proposition that is being offered by Sony. The Playstation 3 by far, is the best gaming
console that is available in the market. Leaving aside the quality of build and other physical
features of the commodity, the Playstation 3 offers the widest range of compatible games
combined with superior performance (Ofek and Wickersham, 2008). Moreover, the Playstation
boasts of a very large number of exclusive games that shall not be available on other platforms.
The Wii for example has only a limited number of game titles while on the other hand almost all
games that are available on Xbox are also available in personal computers, which in fact gives
better performance.
Therefore, it can be observed that Sony’s quality outmatches that of Nintendo or Microsoft. Seen
from this angle, the high price indeed becomes justified.
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Question 8
Figure 1: Magazine Ad of Starbucks
(Source: Pinterest.com, 2018)
Advertising Objective: To prove how milkshakes and beverages in Starbucks are tasty, rich and
smooth.
Figure 2: Website banner ads on Starbucks
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(Source: Sampson, 2018)
Advertising Objective: Starbucks is giving free tickets in order to reach out to more customers.
Figure 3: Website banner ads on Starbucks
(Source: Danimacdesign.com, 2018)
Advertising Objective: Starbucks points out those sharing Starbucks beverages mean sharing
joy.
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Figure 4: Website banner ads on Starbucks
(Source: Bqbrasserie.com, 2018)
Advertising Objective: Starbucks says that sharing and buying the food can help in passing on
the cheer.
Four main factors to consider when selecting an advertising medium:
● Cost involved
● Reach to buyers
● Practicability of the returns
● Timing
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Part 2
1. SWOT Analysis
A SWOT analysis framework mainly stands for the analysis of Strength, Weakness,
Opportunities and Threats faced by a certain business. It aids ion showing the different scopes
and issues that the business is facing and on basis of that, management body takes certain steps
and decisions in order to make the best out of the recognition of those elements.
2. Internal and External Factors
A business has different kinds of internal and external factors that affect it overall, performance
and profitability. The internal factors consist of things such as stakeholder, workplace
environment, employees, management body and other things. The internal; factors of a business
can be analyzed by using the micro based analytical framework, SWOT analysis. While the
external factors consists of a total of all the factors outside the place of the business (which
affects its actions and decisions). These factors can be analysed by making use of the PESTLE
analytical framework.
3. Ways in which IKEA has managed to Minimize Threats
For countering the social trend threats, the company is taking steps to build online help services
to guide customers. In the slowed down housing market, IKEA shall be able to give better home
improvement tips to customers making it economic for them. They have also taken steps to
provide better sustainability training to the employees. For countering market forces threats, the
company is making use of economies of scale by taking advantage of huge operational area and
distribution channel. It is employing modern technologies and efficient managers to organize all
the work. This shall also help the company to lower cost in the long run. In order to gain
advantage in a sluggish economy, IKEA lowered the prices of products (cutting down their profit
margins) in order to increase sale and demand.
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4. Usage of Information in SWOT Analysis
IKEA made use of each and every details of its SWOT analysis top strategize ways in order
ensure better improvements in the business. In response to its global recognitions and vision, it
has increased use of renewable materials by 75% and started making smarter use of them in
order to maintain sustainability. IKEA has termed ways to buy large volumes of materials from
its suppliers in order to maintain good relation with them. Further, it has also started sourcing
raw materials from near places in order to reduce costs. This has helped them to offer products at
lower price and high quality, thus keeping up to their vision.
The opportunity of rising demand for green and low priced products has been harnessed by the
company by using resources sustainability, advising people how to use sustainable and recycled
furniture, funding various charitable projects and reducing the carbon footprints.
Due to its huge size, in many countries products are made without keeping quality regulations
and have worse working conditions. IKEA has arranged for teams of inspectors in order to visit
this place and ensure that all things are made and managed as per the legislation. The demand for
low price products has pushed the company to adopt economies of scale. Profits margins have
been reduced and raw materials are harnessed from nearby places in order to reduce costs. The
large scale of scale has helped it to cover up all its profits. In addition, for helping customers,
IKEA has built online guidance options.
5. SWOT Analysis of Starbucks
Strengths:
● Starbucks is the largest coffeehouse chain in the world. It has a lot of resources at its
disposal. It can easily use them in order to increase its productivity and profitability.
● It is the most popular cafe destination and has stores all around the world. Therefore, it
can boast of a wide customer base.
● It is a socially committed and ethical organization and therefore, it has a strong public
image.
● The best quality coffee is available in Starbucks.
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Weaknesses:
● The prices are exceptionally high for the products to be bought by many customers.
● Its products are not unique and can be easily imitated.
Opportunities:
● The developing economies in Asian countries have opened up a number of opportunities
for Starbucks to expand around the globe.
● Starbucks in indulging advertisements in order to increase the reach of its marketing
strategies.
Threats:
● There are a number of alternatives to the coffee offered by Starbucks at cheaper prices.
Many consumers would opt for the cheaper coffee than Starbucks.
● The organization operates within a specific and restricted market. Therefore, Starbucks
does not have a wide range of different products that can sustain its business if its
primary niche fails to offer sufficient profits.
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References
Bqbrasserie.com (2018). Television Ad Cost - House and Television Bqbrasserie.Com. [online]
House and Television Bqbrasserie.Com. Available at: http://www.bqbrasserie.com/television-ad-
cost/ [Accessed 14 Nov. 2018].
Danimacdesign.com (2018). Web Banner Ads » Categories » Starbucks. [online]
Danimacdesign.com. Available at: https://danimacdesign.com/projects/web_banners/ [Accessed
14 Nov. 2018].
Gelbrich, K., Roschk, H. and Gafeeva, R., 2016. Countercultural Service Usage: a Cross-national
Observation of Starbucks Customers.
Harrington, R.J., Ottenbacher, M.C. and Fauser, S., 2017. QSR brand value: Marketing mix
dimensions among McDonald’s, KFC, Burger King, Subway and Starbucks. International
Journal of Contemporary Hospitality Management, 29(1), pp.551-570.
Haskova, K., 2015. Starbucks Marketing Analysis. CRIS-Bulletin of the Centre for Research and
Interdisciplinary Study, 2015(1), pp.11-29.
Marques, J., Camillo, A.A. and Holt, S., 2015. The Starbucks Culture: Responsible, radical
innovation in an irresponsible, incremental world. In Handbook of Research on Business Ethics
and Corporate Responsibilities (pp. 302-312). IGI Global.
Ofek, E. and Wickersham, P., 2008. Sony PlayStation 3: game over?. Harvard Business School.
Ottman, J., 2017. The new rules of green marketing: Strategies, tools, and inspiration for
sustainable branding. Routledge.
Pinterest.com (2018). creative starbucks print ads (3) | || coffee and kitties 2 || | Pinterest |
Typography, Typography design and Typography poster design. [online] Pinterest. Available at:
https://www.pinterest.com/pin/278660295665372689/ [Accessed 14 Nov. 2018].
Real, K. and Percell, H., 2018. Starbucks Corporate Social Responsibility Report.
Sampson, J. (2018). Christmas ads in the newspapers: Starbucks. [online] Newsworks.org.uk.
Available at: https://www.newsworks.org.uk/news-and-opinion/christmas-ads-in-the-papers
[Accessed 14 Nov. 2018].
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