IKEA in the UK: Applying Marketing Principles for Market Growth

This report evaluates the marketing principles applied by IKEA in the UK market, focusing on strategic decisions for growth and expansion. It begins with a background of IKEA, followed by macro and micro environmental analyses using the PESTLE framework to assess political, economic, social, technological, legal, and environmental factors. A competitive analysis against companies like Amazon and Walmart is presented, highlighting strengths and weaknesses. Furthermore, a SWOT analysis identifies IKEA's internal strengths and weaknesses, as well as external opportunities and threats. The report concludes by emphasizing the importance of understanding these factors for effective marketing and strategic decision-making in the competitive UK market. Desklib offers more solved assignments and resources for students.

Principles of
Marketing
Management

Contents
Introduction.................................................................................................................................................3
Background of company..........................................................................................................................3
Macro analysis.........................................................................................................................................4
Micro analysis..........................................................................................................................................6
Competitive analysis................................................................................................................................7
SWOT Analysis.........................................................................................................................................9
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12
Books and Journal..................................................................................................................................12

Introduction
The criteria behind this report are to evaluate different principles of Marketing by analyzing a
leading market and requirement of strategic decisions for growth and expansion. Marketing is a
significant function of organization and for market growth. It is the process of putting product for
the right customer's at right price. Marketing involve branding, promotion and customer service
in an effective way. Therefore it requires an analysis of different market areas that could affect
and organization. This report is going to consist auditing report on IKEA in a leading market of
UK. The company e is a leading manufacturer of furniture and home furnishing products. As
marketing could not get beneficial without analyzing the potential customers and factors
affecting the environment so that this report is going to present analysis of micro and macro
factors using pestle and competitive analysis through which it would be analyze how political
commerce social and environmental and other factors influence organizations product and its
market (Kumar, 2018). Also coma the report will present SWOT analysis of the company so that
the strength and weakness come out and decisions will be more effective for future growth and
expansion. UK comes under one of the most wide business market in which business could use
effective resources and technologies for marketing. Therefore, it is necessary to identify the
surrounding to eliminate uncertainty and future competition.
Background of company
IKEA is one of the largest retailer and manufacturer of home accessories and furniture. The
company was first established in 1943. it is a Dutch company and now scattered into many
locations which include South Asia Africa Europe, North America and many more. IKEA is
basically known for its quality products of home appliances and furniture as which they make
through a sustainable production and fulfil all the customer requirements. Ikea has great Grand
exposures into to market and provide unique selling furniture and home equipment which are
ready to use and durable (Hurth, and Whittlesea, 2017). The company serves as a Supermarket
chain into Retail Industry and has large operational cost inventory and brand reputation. It serves
into approx 445 locations and looking forward to spend into further markets. IKEA provides
product through offline and online methods both which has prominently reaching to high success
as the website contains over 12000 products which provide customer convenience and varieties

at one place. In UK market, IKEA is creating immense growth bye providing unique product
solutions for every corner of home and people love their varieties and designs (Heath, and
McKechnie, 2019).
Macro analysis
Macro analysis can be characterized as an assessment which facilitates prominent assistance to
the business enterprises in terms of monitoring and determining the potential factors and forces
existing within the external environment which can impact upon the operations and functioning
of the same in a considerate manner (MARKETINGU, 2020). In order to conduct the macro
analysis of IKEA, Pestle Framework will be taken into consideration.
Pestle Framework can be defined as a tool that allows the business firms to obtain essential
insights about the forces external to the business that can influence the stability and profitability
of the same. The external environmental forces factors that can impact upon the business
operation of IKEA in United Kingdom are as follows:-
Political
Political stability plays a significant role in the routine functioning of a business entity. In
context to IKEA, the minor or major alterations within the political reforms, policies, procedures
etc. within UK can result in severe implication for the concerned business organization.
Moreover, the political environment can also impact upon the brand name and value of the
organization. Hence, IKEA is required to monitor the political culture of UK in order to obtain a
necessary overview that can help the firm in taking the appropriate measures in the UK market.
Economic
Brexit policy can emerge as complete game changer in the UK business industry. The regulation
of Brexit policy can impose major threat to the trade and supply procedures of the respective
enterprise. The impact of Brexit can also contribute to the hike in the cost of the raw materials
within in turn can result in modifications in the pricing structure of the company (THIS, 2020).
In addition to that, the fluctuating rates of foreign currencies, inflation, recession, doom period
etc. can also impact the business process of IKEA in an enhanced manner.

Social
The social values, attitudes and culture of the market also impacts upon the business practices
and the overall growth rate of a company. In context to IKEA, the company must incorporate the
social values of the customer segments in UK and work towards providing them with effective
consumer experiences and satisfaction in order to heighted the value of products and services
catered by the firm in the concerned market domain.
Legal
The amendments in the legal framework or addition of new specifications in the exiting trade
policies, introduction of new business laws, modifications in employability laws etc. can hugely
affect the business process and procedure exercised by IKEA. Also, the firm needs to obligate
with the tax and tariffs charged by the country for the trade regulations in an appropriate manner.
Technological
Technology can be termed as a significant factor which accelerates the growth of the company.
Nowadays, every business enterprise capitalizes upon IT in order to reach the global audience,
interact with them and maintain a global business network. The change in technical
advancements, emergence of new innovation in the field of Information Technology,
obsolescence of tech sources and services can affect upon the business operations of IKEA.
Thus, the company needs to optimize upon the latest and upgraded versions of high tech in order
to attain an added leverage in the target market.
Environmental
IKEA needs to focus upon integrating sustainability measures within its current line up business
process in order to contribute towards healthy environment. The firm also needs to establish its
corporate social responsibility goals and objectives in a detailed and defined manner in order to
lead a good example in the market and assist in the upliftment of the society. The advance
strategies in regard to waste control management, promotion of renewable energies can also
assist the firm to create sustainable future, enhanced goodwill and reputation within the market
environment.

Micro analysis
Micro analysis can be defined as an assessment and evaluation of all those factors and forces that
are internal to the business entity and generates a direct impact upon the business functions and
process in a deliberate manner. The micro analysis of IKEA is as follows: -
Company
IKEA is an international business firm which exercises its business process and procedures in
various countries across the globe. Company is known to provide quality furniture products and
services to its customers at low prices. The company has a strong brand image within its target
environment and exercises of good and prominent share within its business environment as well.
The business process and units of IKEA are quite advanced and well integrated which provides
assistance to the firm in leading competent business functions in the target market environment.
Customers
IKEA targets the customer which prominently belongs to middle/upper middle class income. The
company provides goods and services at low prices which in turn enhances the level of
satisfaction derived by the customers the offerings of IKEA (Maleki and Shabani, 2020). The
firm incorporates up huge retention of customers from the global domain.
Suppliers
Since IKEA is a popular and known brand within the global industry, the company has a
prominent supply chain network in various parts of the world. Supply practices of IKEA are
extremely flexible and productive which in turn helps the company to maintain a smooth flow of
supply and operations management within the concerned business entity.
Marketing intermediaries
Marketing intermediaries of IKEA such as mediators, agents etc. facilitates advance functions to
encourage the sales of the products and services of IKEA through a chain of marketing network.
Marketing intermediaries also helps IKEA to build a strong customer relationship in order to
boost its business operations to a next level and create a reliable customer base within the

market. Marketing unit also ensures that the brand awareness of IKEA is increased to maximum
in order to persuade more and more customers to invest in the company in an enhanced manner.
Public
IKEA is an international business organization which has the appropriate and relevant public
support. The company exercises a positive brand name and representation within the society
which in turn helps the company to conduct its business operations with full flexibility and
acceptance within the public domain. IKEA tries its best to produce goods and services that can
meet the requirements of the public domain and provide them with their enriched experience.
Competitive analysis
An in depth monitoring and evaluation of competitors is extremely beneficial to the business
enterprises as it helps to provide major insights about the strategic direction, tactics and process
of the rival firms within the market environment (Innanmaa, 2020). IKEA can also benefit from
conducting a systematic competitive analysis through which it can identify the prominent
forthcoming steps and strategies of its competition and achieve a prominent edge over the same
in the market. IKEA faces a major competition from companies such as Amazon and Wal-Mart.
IKEA v/s Amazon
IKEA Amazon
IKEA charges high shipping and delivery cost
from its customer lineup while catering its
organizational offerings to the same.
Amazon has incorporates free shipping policy
within its business operations in order to attract
the interest of major customer pool towards the
products and services.
Also, the online portal of IKEA does not
facilitate the entire product portfolio of the
firm and limits the online sales to a specific
product range only.
Amazon provides the facility to buy each and
every product offered by the company on its
online website (Chernev, 2020)
.
The product range and quality provided by
IKEA has a normal and standard in approach.
Amazon’s furniture products and services are
manufactured from quality and solid wood
which in turn increases the overall
effectiveness of its products among the

customers.
IKEA v/s Wal-Mart
IKEA Wal-Mart
 IKEA’s product range is limited as it
only caters to a specific industry type.
 Wal-Mart provides a wide rage and
variety of products and services to the
market domain including home
furnishing and related goods and
services.
 The quality of products and service
provided by IKEA are quite basic in
comparison to the Wal-Mart.
 Service quality facilitated by Wal-Mart
is extremely advanced and satisfactory
to the customers.
 IKEA only concentrates upon a
particular industry i.e. furnishing
industry. Hence, IKEA’s scope of
expansion is only limited to its existing
industry.
 The market share and profit scale of
Wal-Mart is extremely high as it
facilitates its business activities and
operations in various markets.

SWOT Analysis
Swot analysis can be characterized as a prominent approach that assists the business firms to
determine their existing strengths and weaknesses within the business environment. It also helps
the firm to identify the potential opportunities that can facilitate the firm to grow and develop in
the long run. Moreover, it allows the firm gain insights about the prevailing and forthcoming
thread that can severely impact or impose restrictions to the business practices led by the firm in
its respective industry
Strength
 One of the key strengths of IKEA can
considered as its affordable and
reasonable price strategy (Patil, 2020).
The company is known to provide
quality furniture at low prices which in
turn has helped the company to create a
loyal customer base and retain the same
in a prominent manner.
 In addition to that, IKEA enjoys a
global network that assists the company
to conduct its supply an operation
through an advance and integrated
approach.
 The design and quality of the products
and services offered by IKEA is highly
optimum. The company believes in
catering quality services to its customer
segment which in turn helps the
company to maintain a good reputation
and in the market.
 Also, the profit margin, market share
Weakness
 One of the potential weaknesses of
IKEA can be characterized as its
limited product range. The respective
business organization provides a
limited range of products and services
to its customer lineup which in turn
impacts upon its variety proposition.
 Portfolio of the products and services is
quite basic and fundamental as well.
 IKEA has been reported to provide less
emphasize upon the durability as well
as security of the furniture. There have
been numerous cases in controversies
which highlighted the negligence of the
company to facilitate much needed
concentration upon the long-term
durability of goods and services.
 The physical stores of IKEA are located
in the outskirts of the city which
emerges as a serious concern for the
buyers.

and revenue scale of IKEA is
phenomenal. The increase in the
revenue general helps the company to
invest into advanced research and
development procedure through which
it can promote innovation and creativity
within its product range in a desired
manner.
Opportunities
 The emerging trend for E-business and
the capitalization of online and digital
platforms for business operation can be
termed as an advance opportunity for
IKEA to lead its sales and marketing
operation on the online portals and
websites.
 IKEA can also rely upon locally
available raw material and supplies in
order to reduce the transportation, trade
cost associated with the acquisition of
raw materials from cross border
countries.
 The role of infrastructural development
has promoted the demand for furniture
and related goods within the market
domain. IKEA can focus upon
expanding its business practises to new
countries and cities in order to acquire
larger market share and elevate the
Threats
 The budding competition within the
respective industry can impose severe
implications to the profit margins of the
company.
 Moreover, the competitive advantages
realized by the rival companies can also
result in a potential threat for the
company.
 Also, the shift of the customers towards
furniture rental services can also be
termed as a major threat for the
business practices of IKEA.
 The regulation of trade restrictions due
to COVID-19 pandemic is an emergent
threat for the concerned business
organization.

overall profitability of the firm to a
higher extent.
Conclusion
The report has concluded that macro factors have great impact on business marketing and
expansion. The strategic needs for organization are to be innovative and sustainable in business
practices. It has been evaluated that fulfilling social and environmental needs are the main key
points that must be taken into consideration for better results. Also, the report identified various
opportunities and threats require prominent strategies to serve long term expansion. Therefore, it
is required to adopt good marketing strategies and promotional tools which help in people reach
and make the brand active and authenticate into market.

References
Books and Journal
Kumar, V., 2018. Transformative marketing: The next 20 years.
Heath, T. and McKechnie, S., 2019. Sustainability in marketing. In Incorporating Sustainability
in Management Education (pp. 105-131). Palgrave Macmillan, Cham.
Hurth, V. and Whittlesea, E., 2017. Characterising marketing paradigms for sustainable
marketing management. Social Business, 7(3-4), pp.359-390.
THIS, T.M.I.L., 2020. Strategic Marketing Planning. Hashtags and Headlines: Marketing for
School Leaders, p.29.
MARKETINGU, M.U.A., 2020. The Various Models of Marketing Audit. MARKETING, 37(3),
pp.51-72.
Maleki, M. and Shabani, A., 2020. Surveying Influence of Business Strategy, Generosity, and
Environmental Mobility on Marketing Performance; Determining Marketing Audit Role (Case
Study: Pharmaceutic Companies). Commercial Strategies, 14(9), pp.45-56.
Innanmaa, K., 2020. A strategic marketing plan.
Patil, S., 2020. Marketing Planning and Control.
Chernev, A., 2020. The marketing plan handbook. Cerebellum Press.