Tuesday, 26 February 2013

IKEA: Singularity of the brand

Profs. Arun Kumar and N. Meenakshi write about IKEA...
Authors can be contacted at ak2605@gmail.com and n.meenakshi.n@gmail.com

The success of any brand has to be based foremost on an original and unique idea. The idea has to be translated into a brand identity, i.e. developing the personality, culture and value systems of the brand that reinforce the original idea. Good brands manage to actually translate all these esoteric jargons into best practices.

IKEA is one such brand. Starting as a small business in Norway, IKEA went international much before the concept of globalization was conceived, because domestic demand was constricted. IKEA’s business success came from doing everything the other way around. At a time when the furniture that was sold was heavy with intricate designing, IKEA made light Scandinavian furniture. The furniture was flat and had to be assembled by the customer himself. Further, there was no home delivery, this was the responsibility of the customer. The brand offered a wide range of furniture with quality and style at affordable prices. The designs were distinctly Norwegian and continue to lend a distinctive edge after nearly 60 years since the inception of the company.

It is also important to remember that every element of the marketing strategy must reinforce and strengthen the brand values. Often companies confine their focus to communication, product range or prices. For IKEA, their mode of expansion and distribution strategy are also reminders of the character of the brand. IKEA does not go in for vertical backward integration because its strength lies in retailing furniture, not manufacturing it. Besides, having its own manufacturing base could seriously hamper the freedom to choose from the best suppliers, and ability to manage the supply-demand equation.

IKEA also uses only the organic mode of expansion simply because the company feels that no existing retail format or retailer can match its expectations of the retail ambience which is absolutely crucial to its success. The vast expanse of its retail stores and location in the outskirts of the city would automatically make acquisitions more complicated. Besides, the layout may not match with the company’s requirements, and modifications would be prohibitively exorbitant.

These brand values also have to be understood by employees. In fact, IKEA goes through an extensive selection process, where it is very important that the personality of any prospective candidate matches with the brand values that the company stands for.. Brand power comes partly from a employee’s conviction in its values. Lack of conviction reflects in poor performance.

Despite being in existence for such a long time, the singular idea that formed the key to success for the retail chain continues to remain unshaken. Though it is widely believed that differential advantages do not last long, it may not always be true. Any idea that is implemented consistently and with continued precision is extremely difficult to copy with the same degree of success by a competitor. IKEA is a living proof.

Visit Ikea at http://www.ikea.com/

1 comment:

  1. The activities done over a period of time reflect an optimal fit with the consistent positioning of the corporate. A noteworthy example of sustainable competitive advantage. Thanks for sharing it!!!!