Assessment Brief: Task and General Guidelines

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Scenario:

Choose any international organisation (with any product) of your choice preferably where you are

working or worked with or familiar with and prepare an entry plan for international markets. Your

report should investigate various factors that influence the entry mode of the company into the

global market along with the potential barriers that might hinder the expansion of the chosen firm.

Various marketing strategies in order to enter into the international market should also been

explored. The details of the expected project report format is given below:

1. Executive Summary: [10 Marks]

2. Introduction: Provide some background information on the chosen organization in the

context of marketing management. [15 Marks]

3. Application of theory to practice: The following concepts/theories/models should be

covered:

(1) Marketing process and strategies. [10 Marks]

(2) A critical evaluation of marketing mix of the chosen organization. [20 Marks]

(3) The role of marketing models, tools and techniques in developing new products and

effective marketing plans. The models discussed should include at least one model among

(Porters Model, SWOT Analysis, and PESTLE) and at least one Model among (BCG

Matrix, Ansoff Matrix and Product Life Cycle Model). [30 Marks]

4. Conclusions and Recommendations: Provide recommendations for adequate marketing

strategy for the chosen organization to expand the business in the global market. [15 Marks]

5. References: you should use the Harvard referencing system only.

SAMPLE

Executive Summary: [10 Marks]

Marketing is the art of attracting customers to a product or service and convincing them of the value

for money for the subject product/service to increase the market share through having more

customers and sales in addition to keep reminding customers of the benefits and enhancements of

the product/service to avoid losing customers in favor of competitors.

The International Marketing is the application of marketing principles to satisfy the varied needs

and wants of different people residing across the national.

Nowadays, the competition in business became very tough due to wide variety of channels to reach

customers, variety of modes and choices, variety of shopping tools and variety in cultures even

within the same country.

There are thousands of researches carried out on the marketing locally and internationally that came

up with systemized tools to assess the market opportunities and have a clear picture on the

feasibility of introducing new product or expanding the business internationally/globally and set

effective strategies to ensure successful entry to a new markets.

In my assignment I have chosen one of the most successful companies in the

furniture industry IKEA which have started 75 years ago and expanded its

business across 47 countries and keep in building on its success by more

development.

Introduction to the chosen company shall include critical analysis of its market matrix and shall

enlighten the strength and success achieved through its journey supported by charts illustrating the

escalated trend of its business within key markets across the world, also the philosophy and strategy

that IKEA follows to keep attracting new customers and its continued efforts to provide value for

money stylish products.

I will discuss in this papers the feasibility of entering new Market in Bahrain by applying SWOT

Analysis elaborating on the strengths and opportunities that support such decision in addition to

weakness and threats with strategies to eliminate its implications on the business growth within the

new market, also PESTLE analysis will be discussed to assess influence of external factors of the

new chosen market.

Porters Model 5 forces model will also show how IKEA position shall not be effectively impacted

by forces that may weaken its competitive strength.

Finally I will conclude the factors that helps IKEAs success and the recommendation to keep up

the success and expand the business globally with a recommended marketing strategy.

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2. Introduction

Chosen organization : IKEA

IKEA is one of the largest international furniture manufacturer with a passion to provide quality,

stylish furnishings at a reasonable price, so that anyone can afford to shop there.

IKEA was founded in 1943 in small village Agunnaryd , Sweden, its name stands for the initials of

its founders name Ingvar Kamprad Elaterid AgunnarydIKEA mission is to improve peoples everyday lives

IKEA vision is creating a better everyday life at home for the many people.

IKEA operates 375 stores in 47 countries with 70% of the stores located in Europe. The best

countries for IKEA are Germany and the U.S., which both represent 14% of IKEA Group sales. The

retailer added 13 stores in 9 markets during 2015 with multiple store openings in China, France and

Germany. Ikea received 771 million store visits last year, up 7.7% from 2014. It offers roughly

9,500 products. (Forbes, 2017)

IKEA has built its success over the last 75 years by offering furniture at an affordable price that

suits the majority of consumers and different budgets, it follows the concept of self-assembly

furniture that help in achieving cost efficiency and value for money by reducing transportation,

warehousing and inventory costs.

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The graphs show that IKEA business is mainly depends on Europian market with considerable

existence in Asia, Australia and North America.

IKEA Marketing Management

IKEA Marketing Management is an ideal in terms of effectiveness and the ability to reach all

customers and touch their needs, it uses a very successful marketing strategy that is Content

Marketing which is a marketing program that focuses on creating, publishing, and distributing

content for the target audience in order to attract new customers,

IKEA started this by printing its first catalog edition in Sweden in 1951 and continued to add more

items and features to its publish, currently it prints over 200 million copies of its catalog each year

to be distributed all over the world wherein the stylish and luxury products are shown with

dimensions to help customers judge on the suitability of the items to the available space at theirhomes, the catalogs are distributed free of charge.

With the globalization and revolution in technology and communication, IKEA has adopted the

digital mode of marketing using the social media to reach maximum number of customers across

the world, it has maintained its presence on the most popular social media sites Facebook and

Twitter

IKEA first product catalog in

1951 and a recent catalog in 2016

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In Facebook: There are more than 23 million visitors and likes for IKEA UAE page where links to

photo albums and YouTube clips are available to increase engagement.

In Twitter: IKEA has separate twitter feeds for all its country-specific twitter pages. The US page

alone has 2, 22,000 followers while IKEA Canada page has 6, 66,000 followers.

IKEA is really cares of its customers and always tries to identify their needs by sending design

experts to their homes to listen to their concerns and feedback that are taken in consideration when

design the furniture, this strategy also makes IKEA the preferable furniture for all classes.

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(2) A critical evaluation of marketing mix of IKEA. [20 Marks]

Lets simply define marketing as

offering the right product in the right

place, at the right price, at the right

time.

The above would make it easy to

understand the concept of marketing

mix which is known as the 4 P's of

marketing: Price, Product,

Promotion, and Place

The four elements are necessary to

be thoroughly studied based on

accurate data and researches to come

up with a clear strategy to enter the

target market and ensure that money

is spent in the right place with a

guaranteed revenue.

The first step in introducing a new product to a market or an old product to a new market is to think

as customers expected to think.

Customers always need to have the best product at the best price easily, these are the first three

components of the marketing mix (Product, Price and Place) but how to create customers awareness

about the product, here is the forth component which is promotion which is the key component as it

is about dealing with different cultures, different styles and different levels of perception of the

people in the targeted market, without promotion that capable touches the needs of the majorities

the entire marketing process shall be unsuccessful.

Within the next pages, I will discuss each component elaborating on its importance in the marketing

process and applying each component on IKEAs case to illustrate how IKEA managing its

marketing components successfully to sustain the success

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Product

The product could be tangible (goods) or intangible (service)

The product must meet a specific customers need, in order to market a product there should be a

clear understanding of;1- The features and benefits provided by the product

2- The unique selling proposition (USP) of the product.

3- The potential buyers of the product

4- How the product will be designed and packed

5- What value the product provide over other brands

Simply its about the aspects that give the product features

that add value to it and make it able to attract consumers

when comparing it with similar products.

Product in IKEAs market mix

IKEA well understood the needs of its customers and target prospects, it has provided variety of

items that meet the expectation of all classes by providing wide range of furniture in different styles

and variety of options at affordable price to attract maximum number of buyers, it has also provided

flat pack self-assembly furniture that makes the shopping experience different.

IKEA expanded its range of products to include different categories like light fixtures, bathroom

accessories, and kitchen fittings, beds & mattresses, mirrors, textiles & rugs etc.,

The strength and popularity of IKEA products came as a result of IKEAs continuous changing of

its designs as a response to the change in the business environment and to meet new fashions and

luxuries trends as to maintain its unique selling proposition and be the preferable among its

competitors.

IKEA has continuously kept changing with a change. The designs have always been fresh and this

was the major point of differentiation for Ikea. Ikea is a brand that has broadly differentiated and

has not depended upon a solitary classification of items or administrations for its extension. The key

for Ikea has been to give the business a wide assortment of items and administrations to satisfy theirparticular aspirations and to defeat the obstructions or impediments of confined classes.

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Price

Price is amount the customer will pay against the product, it is a key factor that identifies the selling

power of the product, the customer always look at the value for money.

The product should be priced at its perceived value to be sold, pricing at higher or lower than the

product perceived value shall make it difficult to sell.

The value of the product in customers eye depends on many factors started with the need of the

product which come at the first then the design and packing and the selling price compared with the

similar products by the competitors.

If the customer valued the product positively, than a product may be successfully priced higher than

its objective monetary value. Conversely, if a product negatively valued by the customer, then it

may need to be underpriced to sell

The final price of the product is affected by manufacturing costs, the distribution plan, value chain

costs and markups, all these factors should be considered while planning the product marketing to

ensure product reaches the end user at affordable price.

Price in IKEAs market mix

IKEA gained its reputation and success over the years by offering its products at a lowert prices

makes any of its product value for money, it always try finding out how to produce the most

functional, beautiful and durable home furnishing imaginable, at the lowest price possible.

IKEA has considered the competition in the market in its

approach to be the preferred furniture seller in markets

wherein it operates, to achieve this whilst maintaining the

good quality of its products, IKEA has developed a new

system to reduce the costs of transportation, warehousing,

assembly and inventory by using flat pack and self-assembly

that mean optimized loads and fewer transport.

IKEA strategy is offering fantastic and stylish products at low prices, which is the key reason its

customers have always been retained to IKEA

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Promotion

Promotion is the communication technique of the entire marketing function aiming to raise

customers awareness of a product or brand, provide necessary information about the product

verbally or visually.

Promotion is key in generating sales and creating

brand loyalty, promotion is successful when it

reaches right audiences in the right time by any of

means.

Promotion has many tools can be in a physical

environment by arranging events like trade shows,

festivals and concerts, this type of promotion

involve direct interaction with customers that help

achieving immediate purchases.

Other type of promotion is the traditional media

including newspapers and magazines or electronic

media like TV and radio, outdoor media like

billboard or banner advertisement.

Recently the digital media took an important place

in the promotion depending on heavy use of

internet and social media across the world in

parallel to the revolution in the communication

field.

Sales promotions is another approach that can be considered the preferable from the customer point

of view due to benefits and more value gained in return of money.

Promotion in IKEAs market mix

IKEA has a very successful promotion strategy depending on its brand name.

It uses all forms of promotion, one of the most successful promotion tools is the advertisement

through annual catalogues distributed widely to reach the mass of consumer audience, this approach

started in Sweden in 1951 and continued adding more items and features, currently IKEA prints

over 200 million copies of its catalog each year to be distributed all over the world Catalogues are

useful to the customers as it provide all details about the different kind of stylish and luxury

products with actual dimensions to help customers deciding the suitable items to the available

space, the catalogs are distributed free of charge.

IKEA professionally uses such smart promotion tool to

support the products by making them look desirable and

unique in their design.

Another successful promotion tools is seasonal sales

promotion IKEA use depending on its popular brand

name and pricing structure, its one of events that

customers wait for to get the needed items at affordable discounted prices that increase the feel of

Value for Money.

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Place

Place is very important factor in marketing mix, its about the distribution channels that is required

to make the product available and accessed easily by the end user.

Distribution is concerning to make the product available in the right place at the right time in the

right quantity to reach existing and potential customers, the distribution is done by distribution

channels that is about moving the product from production to consumption.

Poor planning of this subject may jeopardize the business

and waste all time and effort spent in the other marketing

elements. Simply if the product found to be valued by the

customer and its provided with affordable price and had a

very successful promotion strategy creating good level of

awareness BUT the product is not available where the

customer is looking for it and out of stock the customer

will go for the alternative product and lose its loyalty to

the product.

In addition to the distribution channels, place management

involved in different management areas such as Logistics,

coverage, locations, inventory and transportation, the

management of all these items is based on the demand and

forecast production plan.

Place in IKEAs market mix

IKEA runs its business by selling from its own retail stores, IKEA stores are usually located out of

the town, very large and well organized for a successful shopping experience.

The layout in IKEA stores is impressively designed and divided into approximately20 zones each

zone include certain type of home furniture or accessories to make the customer feel comfortable

and in control of their shopping experience.

IKEAs 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. Many of the stores even have restaurants, food shops and a Swedish market. Some stores

even have a bespoke play area.

In addition to the above, IKEA helps its customers finding their way with indoor Google maps

Currently IKEA has more than 375 stores in 48 countries across the world, its strategy for

expanding by granting rights to become a franchisee in markets where rights have not already been

given to maintain their exclusivity

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IKEA is very careful when selecting franchisees, it evaluates the following key aspects before

agreeing the franchise; Experience of the partner and capability to run the business in the selected country

Corporate culture and values that plays a key role on operating the business consistently.

Financial strength and ability to carry through the investment penetrating a country in full

and in a large-scale retail environment format.

(3) The role of marketing models, tools and techniques in developing new products and effective

marketing plans. The models discussed should include at least one model among (Porters Model,

SWOT Analysis, and PESTLE) and at least one Model among (BCG Matrix, Ansoff Matrix and

Product Life Cycle Model). [30 Marks]

The project is preparation of entry plan to expand the business in a new market, there is no specific

product but the plan is to introduce the company in the new market as a manufacturer of stylish and

quality furniture at lowest cost that suit all budgets of customers and meet their requirements.

The new chosen market to expand the business is Bahrain, its a good decision due to the following

consideration; IKEA is present in many countries in Gulf area such as Saudi Arabia and Qatar and known

to a considerable number of customers in that area.

Bahrain is one of the richest countries in the area due to exporting Oil, it attracts workers

from all the world to work and make money with a stylish and comfortable level of living.

Bahrain society includes different levels of income that will make a great demand on all

types and wide range of products in terms of price.

Different cultures will also help in marketing different styles on fashions that is one of

IKEA strengths.

Background of the chosen market

Although Bahrain is an attractive investment and business destination for retailers giant like IKEA,

entering a new market is still not an easy decision, it involves spending money and effort thats why

it has to be studied from all aspects to identify factors that shall affect the business either lead to

success or failure.

One of the most important factors is the key competitors in the new market, what are their capacity,

market shares and price range for each.

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Key Competitors in Bahrain Market

Company

Branches

Existing

since

Range of

Products

Price

range

2 Branches

2005

Bedrooms,

Dining rooms,

Living rooms,

accessories,

lights, Sofas,

kitchen

appliances,

bedsheets,

textiles, curtains

& Tables

Medium to

High

2 Branches

2007

Bedrooms,

Dining rooms,

Living rooms,

accessories,

lights, Sofas &

Tables

High

3 Branches 2004

Bedrooms,

Dining rooms,

Living rooms,

accessories,

lights, Sofas &

Tables

Medium to

High

1 Branch

2008

Bedrooms,

Dining rooms,

Living rooms,

Sofas & Tables

Medium to

High

As shown above, the 4 key competitors in Bahrain have product range similar to IKEA that will

definitely impact IKEAs market share at least in the first year after the entry.

The Entry strategy should take into consideration this factor and design a marketing plan to reach

maximum number of customers highlighting them the advantages of IKEAs products in terms of

value for money, thorough studies to the products in high demand in this market is must to enable

identifying range of products worth to introduce and invest in within the first year, the strategy shall

be flexible to be updated (if needed) based on the sales records in the first quarter after launching.

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Other Key factors that affect the entry strategy

There are many researches done in this field that set a framework to analyze the factors and its

influence on the marketing strategy, one of these models is Porters 5 forces model which created

by Michael E. Porter of Harvard University as a Framework for analyzing the level of competition

within an industry and business strategy development.

Porters model is useful as it helps understanding the strength of current competitive position, and

the strength of a position in the target market, it focuses on the attractiveness of the target market.

The model assumes the following five forces that are important to determine competitive power in a

business situation;Awareness of these forces can help a company stake out a position in its industry that is less

vulnerable to attack (Porter, 1979)

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1. Supplier Power (Risk to drive the price up)

Supplier power is the extent to which the supplier can affect pricing of the product, this

depends on number of suppliers of the key input for the product.

The more alternatives available the less effect of the suppliers to drive the prices up.

Successful organizations should have different suppliers and a backup plans to switch from

one supplier to another with lowest cost possible to overcome the power of the unique

supplier and its capability to control over the business.

Applying this force on IKEA business

IKEA has a long-term approach to achieve its business objectives, it has a long term relation

with its suppliers who share the same business model and values, the strategic relation with

a huge range of suppliers make them partners rather than just suppliers.

This strategy proven to be very successful in eliminating the power of suppliers and theirinfluence on the price that makes IKEA able to sustain its success by achieving its vision

and strategy of providing stylish products at lowest cost.

2. Buyer Power (Risk to drive the price down)

Buyers power is the ability of buyers to drive prices down, it depends on the number and

importance of buyers and their available options that make it easy to switch to competitors

product.

Dealing with few and powerful buyers increase their influence and ability to dictate theirterms that definitely affects the business negatively.

Applying this force on IKEA business

One of the key success factors of IKEA is having a long term relation with its

customers/buyers as well.

The way IKEA mange its business maintains offering quality products at lowest price, the

cost efficiency achieved by reducing the logistics costs by 35% makes IKEA the most

attractive furniture retail among its competitors.

The high market share in addition to a very competitive price puts IKEA at the top of its

business focusing in enhancing products to attract more customers and maintain lotalty of

existing customer that reduces the influence of buyers power.

3. Competitive Rivalry:

The competitive rivalry is the toughness of the competition, it depends on the number and

capability of the competitors, if there are many competitors who can offer similar product

with equivalent quality then the organization will have less power because suppliers and

buyers will go elsewhere if they don't get a good deal, in the contrary if the product is unique

or there are few who can offer similar products, then the organisation will have more power

in the market.

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Applying this force on IKEA business

IKEA has many competitors however, its still at the top of the competition among them due

to its quality products at low price in addition to the wide range of products that meet the

requirements of all customers.

IKEA business strategy make it unique despite having many competitors.

4. Threat of Substitution:

A substitute is a product that performs the same or similar function as another product

Threat of substitution is the possibility of the customer to purchase a product from another

industry similar to the product produced by our industry, it depends on the benefits the

customer may find in the other product that equals or more than provided by our product.

The preference of substitute can be a result of its attractive price or increased quality.

Applying this force on IKEA business

IKEA always keep eye on the potential substitutes, it overcomes the risk of customer switch

by keep innovating its products, focus on increasing the quality and value for money for its

products to maintain its position in the market and ensure its customers loyalty.

5. Threat of New Entry

It refers to the threat new competitors pose to existing competitors in an industry.

No doubt that the successful and profitable business attracts new entrants and encourage

them to invest in the same industry based on the success of the existing organizations

perform the same business.

Applying this force on IKEA business

Nowadays, furniture industry becomes one of the most successful business due to the wide

range of designs and styles and increase in customers needs.

Although the possibility of new entrants to the industry is high and impose a risk of reducing

the market share, IKEA strength and experience in its industry shall protect it from that risk

as it always renovate to attract more customers by focusing on its strategy and vision to

maintain value for money with quality and stylish products therefore can preserve a

favourable position and take fair advantage of it.

Porters forces analysis outcome:

IKEA is competitive due to the big variety of products that target medium and high end

customers and also provide suitable products at low cost for the low income customers.

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IKEAs suppliers are not a threat or a source of pressure to its business due to having

different suppliers who are keen to keep a good and permanent business relations with IKEA

through a strategic partnerships.

Customers bargaining power is not considered as a real threat to IKEAs business as it

provides a value products at affordable cost depending on its successful strategy to reduce

the transportation and inventory costs in addition to the assembly cost by following selfassemblyphilosophy, the margin achieved by IKEA is very reasonable due to these factors.

IKEA strength and excellent reputation built over the years protect it from the threat of

reducing market share in favour of new entrants to the market, in addition to that IKEA keep

doing researches and enhancements to sustain customers satisfactions and ensure its

products meet their expectations and provide required solutions.

SWOT Analysis

As discussed, entering a new market is not an easydecision and needs a lot of studies and researches to

ensure the feasibility of such step and profitability to

the whole business regardless of the scale of the

organisation and its success in the past.

One of the most important analysis that is

recommended to any organisation to start a new

business or take a step forward for its growth is the

SWOT analysis that stands for analysing Strength,

Weakness, Opportunities and Threats that face the

organisation.

Planning to expand IKEA business in Bahrain shall be

subject to the outcome of this analysis as a tool to

judge on the feasibility of the expansion plan and have

a backup and support to the decision.

Strengths

Based on the details in the background section and history of success, IKEA displays a great deal of

customer loyalty and contact.

The key strengths of IKEA are; Customer loyalty built over the years by keep innovating and work hard to meet customers

needs and expectations.

Direct Marketing through annual catalogue that show extensive range of products, catalogues

are distributed to individuals for free showing different design styles with full dimensions to

assist customers selection for the suitable product.

Share-Space builds good customer relationships

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IKEA has established a Share-Space website that has created a web presence for existing

customers to browse what other customers are using their IKEA wares for

Large range of products that suit a wide range of customers at all levels.

Unique showrooms

IKEA makes its show rooms as a great attraction to all family members, it provides a

restaurant, and super market and kids play area making the shopping experience so

impressive, such approach can be considered as one of IKEAs strengths that makes it

unique among its competitors.

Strong image

Low prices due to reducing transportation and inventory and assembly costs.

Easy-to-assemble products

Environmental friendly company

Weaknesses

Although IKEA has demonstrated its strong ability to connect with existing customers.

IKEA sells its products only through its show rooms and never depends on distributers or agents,

that can be considered as one of the weakness factors as the products will not be accessed by people

who do not live within a reasonable distance of an IKEA showroom, those people are unable to seethe benefits of purchasing IKEA (over a competitor)

IKEA does an excellent job at maintaining a good relationship with its current customers, but the

campaign toward potential customers is lacking that may give advantages to its competitors who

have a chain of distributers covering wider area and accessed by more customers..Opportunities

IKEA is known in Gulf area as it exists in KSA and Qatar markets which are close to Bahrain that

will help in smooth entry to that market since IKEA excellent reputation is already built in the area

that will give it opportunity to gain an even larger customer base. The potential for growth is

enormous considering the high life style in Bahrain society in addition to the wide culture variety

that will mark a sign of massive potential for new customers.

Another opportunity is that Bahrain society includes 52% Expatriates who live and work in the

country, usually expatriates form the key customers of IKEA as they prefer light weight, stylish and

quality furniture at lowest cost possible.

Threats

Due to communication revolution in the era of computer and internet, any marketing plan has the

distinct challenge of cutting through the clutter.

That is to say: making customers see and connect with IKEA, instead of the advertising tactics of a

competitor.

In this way, and especially because this plan will focus on an Internet-based market, IKEA will face

the same challenge. The threat could be even larger than traditional marketing plans, as the

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Internet throws advertisements at individuals at almost every moment they are online. IKEA must

break through the clutter and become top-of-mind.

Limited access to the customers live at a far distance from the show room is another threat that will

give advantage to competitors, however IKEA philosophy in reducing the overall cost still able to

attract customers in consideration of its quality products at lower prices that will encourage them to

drive long distance to access the show room.

Market entry strategy in terms of products in demand

BCG Matrix Model

Its crucial to make a good start in the new market by prioritizing the products that are in high

demand to achieve targeted sales and planned profit.

IKEA has a very wide range of products, the demand on each is different depending on the market

and the nature of customers therein.

Since IKEA has an experience in the Gulf area as it exists in KSA and Qatar, it definitely has a

statistics for the products sales where it can identify the products in high demand.

One of the key techniques to set the strategy for introducing the products at the early market entry is

BCG matrix or Boston Consulting groups product portfolio matrix which is designed to help with

long-term strategic planning, to help a business consider growth opportunities by reviewing its

portfolio of products to decide where to invest, to discontinue or develop products. It's also known

as the Growth/Share Matrix.

The Matrix is divided into 4 quadrants represents

market growth and relative market share, as shown in

the diagram below.

1- Dogs: These are products with low growth or

market share.

The usual marketing advice is to remove any dogs from

the product portfolio as they are a drain on resources

without a return

2. Question marks or Problem Child: Products in high growth markets with low market share.

These products are in the gray area and not known if they will become a star or drop into the dog

quadrant.

Manufacturers always do significant investment to push them into the star quadrant to improve its

marketing position and get the targeted profit.

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3. Stars: Products in high growth markets with high market share.

These products are the market leader and the most profitable to the business as it generate more

return on investments (ROI) though require ongoing investment to sustain.

4. Cash cows: Products in low growth markets with high market share, these products should

continue with enhancements to keep customer satisfaction as to maintain the market position and

high market share

Using BCG matrix will help IKEA manage its portfolio of products to decide where to invest and

figure out which areas of its business deserve more resources and investment and would be

introduced in new market entry.

IKEA portfolio include a very wide range of products in terms of function and style as well.

The strategy for entering a new market shall consider the range of products that are expected to

have the maximum market share and market growth as well, those products are to be prioritized in

the pre-launch marketing campaign.

IKEA products categorieIKEA products categories are as follows;1- Bedrooms and mattresses

2- Dining rooms

3- Cupboards

4- Sofas and armchairs

5- Cooking wares

6- Textiles & Rugs

7- Decoration and Lighting

8- Outdoor furniture

9- Kitchen cabinets and appliances

10- Safety

The range of products that fall under each

quadrant of BCG matrix can be identified

through;1- Researches on Bahrain market.

2- Statistics of sales in an existing KSA

market being almost similar toBahrains market in many aspects

such as cultures and demographic segmentation.

Based on the outcome of the above the entering strategy shall be built based on the following; No items expected to be in the star quadrant of high growth rate and high market share at the

new entry stages, the market share shall be increased for the key items in high demand

gradually as the awareness about these products increased through marketing campaigns and

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The furniture items 1 to 4 above expected be in the question mark quadrant as those items

are in high demand but the market share might not be high at the early stage of market entry

due to existing competitors in Bahrain market who are producing the same items with also a

good quality, however IKEA shall invest in these items to attract the customers and increase

the market share to shift these key items in to the star quadrant (can be targeted within 2

years from the entry date)

The decoration, lighting, kitchen items expected to be in the cash cow quadrant of low

growth rate and high market share as IKEA products under this category are quick selling

items due to its quality, design and reasonable prices.

Some items like safety items, cloth storage boxes and are expected to be in the dog quadrant

with low market growth rate and low market share being not in high demand by the majority

of customers and doesnt have any design features that push customers in need of it go

IKEA to buy it.

In the next two pages, the expected BCG matrix for the different range of products at the market

entry stage and the targeted distribution within 2 years from the entry date will be illustrated.

The strategies shall be made to achieve the target within the time frame, monitoring the progress by

reviewing the sales records quarterly shall give an indication whether the strategy is effective to

meet the objective or need to be updated to overcome challenges, this is part of lean management

approach in the business.

Moreover, reviewing economy reports and forecasts is very important to assess the market growth

rate and compare it with early estimate to have action plan in place to deal with expected risks that

may require change the strategies set to run different production units.

Page 25 of 35

Expected BCG Matrix at Market Entry

MARKET SHARE

LOW

HIGH

LOW

HIGH Marketing strategy should allow

more investment and marketing

campaign to get these items in this

quadrant having high market share

within 2 years from the market entry

Page 26 of 35

HIGH LOW

LOW

HIGH

MARKET SHARE

Targeted BCG Matrix 2 years after Entry

Page 27 of 35

IKEA strategy for its business growth

Planning for the business growth is one of the key factors that help in having a clear road map with

defined strategy to meet the long term objectives.

IKEA should have studied the different options for its new step to expand the business based on

thorough study of its capacity, market condition, economy trends and business environment.

One of the tools that are used to define the most appropriate strategy that suits the organization in

Ansoff matrix.

The Ansoff Matrix was developed by H. Igor Ansoff and first published in the Harvard Business

Review in 1957, It has given generations of marketers and business leaders a quick and simple way

to think about the risks of growth.

The Matrix categorizes the strategies for

business growth with respect to the

magnitude of risks associated in to 4

Assessment Brief: Task and General Guidelines

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