Free Essay Sample «IKEA Company»

«IKEA Company»

1.0 Introduction

Focus was given to countries namely Brazil, Qatar and New Zealand and the highest priority was given to New Zealand. Both Brazil and Qatar offer a good ground for the IKEA Company to export its product but this was limited by some factors. Brazil has a high population but it is limited by the fact that it has unequal distribution of income. Social stratification is so rampant and this hinders any development especially n the rural sectors where the poor live. It is also limited by its poor infrastructure and unstable market prices. Its currency is in Brazilian Real (BRL) and has a low currency value in the market. On the other hand, Qatar offers a better site for exporting than Brazil. Being an oil rich country it has a good amount of wealth for its nation. It has a good infrastructure for transport and diverse networking services. It is limited by unstable political status in that it discriminates persons of a different religion apart from Muslim.

2.0 New Zealand as the Target Market

New Zealand is a rich country not only economically but also socially and politically. It has a good number of citizens who are friendly even to strangers. it has unlimited freedom in movement of goods especially due to the fact that is has well built infrastructure compared to most countries as stated by Gorham Rex and Karl Brown (2004).

2.1 Demography of New Zealand

As Tim Hazledine (2008, p. 35) reports, the population of New Zealand is made up of3.9 million citizens. The population is ever growing and a large portion comprises of the young people who are energetic and ready to develop. It has most of its immigrants coming from United Kingdom, the pacific and the Asia. But it also has most of its citizens moving toward Australia and United Kingdom. It is made up of three main ethnic groups including the Asian occupying 8.1%, Maori and the pacific islands occupying 13% and 6.0 % respectively (Tim Hazledine 2008, p.37).

The life expectancy at birth is seen to be very high having a total population of 80.36 years where the male have78.43 years while the female have 82.39 years.

2.2 Political Stability

New Zealand is made of a constitutional monarchy. It is reigned by a governor who has great authority in making major decisions of a nation. It is the most top country that allows women leaders to take part in the highest offices. it is also a member of the commonwealth giving it access to enjoyment of free movement of .goods and services. having a strong profile in protection against social stratification and environmental protection, it will provide a great market for the export of IKEA furniture it also practices free trade and protects the rights of individuals in its territory.

2.3 Infrastructure

Hayward, Margaret (2001, p.49) reports that New Zealand is made up extensively built roads which open up doors for easy access of materials. International calls made from its landline are cheap thereby providing good communication system. Its internet services are widely spread in that it can be accessed from different parts of the country even those in the rural sector. It has large number of airports which have paved pathways making immigration into and out of the country favourable and easy. Telecom is the most commonly used form of mobile provider in spite of the competition it faces from other mobile providers.

2.4 Economy

Hayward, Margaret (2001, p.52) further described New Zealand as having a stable economy compared to the other target markets as observed in part one and two. It has a competitive currency in the market giving it an advantage over the other currencies in the market. Its economy can also be described to be a market economy in that it gets most from international trade that it carries out with Japan, China, European and United States. It has allows investments in the country without much barriers .Its GDP per capita income increase with time consideration that the rate of inflation is maintained at a low value .it has and industrial growth rate of 5.9% considering that most of its population is made up the young who are also employed. This means that the rate of unemployment is low compared to other nations like Brazil which has a higher population but with a high rate of unemployment. 

2.5 SWOT Analysis

The IKEA Company has internal advantages which it intends to use to lure the export of its product. Being a large scale producer it has decided to establish multiple retail outlets in the home country to aid in the delivery of its product. It has also availed trained staff members who will make sure that goods produced are high quality so that it can compete favourably in the market. Having identified New Zealand as the target country it has decided to expand its internal middlemen in order to increase its sales. It has also prepared itself to counter the completion from the other furniture producers by having a well defined market niche.

2.6 Market Strategy

The company plans on using different marketing strategy to improve the amount of sales in New Zealand (Bartlett, Dessain 2006 p.29). Being a ready market that is rich, the company plans on promoting its product using different methods including selling directly to the customer thereby, maintaining good interpersonal interrelationship with them. It plans also on using personal retailers, construction of chain stores and having different outlets in the target country. Other methods to be considered includes using networking, email communication, newspaper and press information.

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In order to keep the interest of the customer at heart it has decided to offer after sale services by sending reliable middlemen to the target country. It will also offer a certain percentage of discounts when a certain amount of sales is made. Apart from that it will also provide free repair service to its customer on a certain guarantee period.


2.7 Social Economic Stratification

New Zealand is a free country that considers equality for all in all aspects (Tim Hazledine 2008, p.75). The margin between the poor and the rich is not strongly viewed giving the country a peaceful environment to carry out its trade with no ethnic restriction. On comparison Brazil has well developed areas which are distinguished by the lavish lifestyle in the town region compared to the less developed areas where the poor stay.

3.0 Conclusion

Based on the above mentioned facts about New Zealand, the IKEA Company has decided to focus on it as target market. They are a good target because despite being a friendly country they also participate in environment conservation. This is a good sign especially if the company decides to produce its products from there. Being also an agricultural country it has a readily available source of raw material which will enable easy production. The population is made up wealthy immigrants (Briton) who are pocket friendly and therefore availability of a ready market.

The company is prepared to counter any threat that might present itself in the course of promoting its product to New Zealand. Some of the threats it might encounter includes other furniture producers who have New Zealand as their target market too. The completion may lead to a reduction in the market price of its products thereby cutting down the amount of profits to be enjoyed by the company. The company has also planned on strategising its market by using appropriate advertising and promotions methods in the target country. Offering free repair services was seen as the best method of promotion and use of discounts to win the trust of the consumer.

Being a large company with all the necessary standards, its cost of production is reduced and therefore, it in a position to produce goods at a favourable price. Considering the lavish lifestyle of those living in New Zealand the company expects a high sales turnout which in turn enables the company to expand more. This expansion will be of advantage because the company will be in a position to enjoy economies of scale. The positive image of the company will also be boosted leading to a great publicity of the company.



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