Internationalization of the Ikea in the Egypt Markets Statistics Project

Essays on Internationalization of the Ikea in the Egypt Markets Statistics Project The paper â€Å"Internationalization of the Ikea in the Egypt Markets" is an excellent example of a statistics project on marketing. In the multibillion furniture and retail global market, IKEA group is one of the leaders in the world. In the global environment, IKEA was able to distinguish itself from other furniture retailers by combining its unique principles of function, form, and affordability. Having progressively taken over the European market, IKEA ventured into the American market. Although there was little success at first, IKEA improved its market position through market research and advertisements. The progress has now ranked IKEA as the fastest-growing furniture retailer with a major market share in the US.In Africa, IKEA has extended its presence by setting outlets in countries like South Africa. Egypt with a population of 81.5 million people (2008 estimate) provides a potential market for IKEA’s global expansion strategy. Considering Canada that hosts 11 IKEA s tores records an annual 25 million visitors, Egypt with its cost-based competitive furniture market provided a ready market for IKEA. The company targeted the affluent middle class willing to spend up to $3,000 for household furnishing. Because the Egyptian furniture manufacturers and retailers depend on wood supplied to the industry from Eastern and Northern Europe, the presence of IKEA will greatly lower the cost of production and hence the price of furniture for the middle-class earners. In addition to wood, all other materials for the manufacturing process are imported hence exposing the industry to changing international currency and prices (Ingvar Kamprad IKEA, 1996).IKEA History and EnvironmentHistoryUpon its inception in 1943, IKEA under the direct control of Kamprad purchased wallets, pens, jewelry and other personal items in bulk, and once retailed them in smaller quantities, at a profit; and it was not until 1948 that the company began dealing with furniture. Although it is run by the family Kamprad, the founder Ingvar Kamprad established the company in Sweden in 1943. The name IKEA represents Ingvar Kamprad (founder’s names) and Elmtaryd  Ã‚  Agunnaryd (the firm he was born and name of his home country). With its headquarters in Helsingborg, Sweden IKEA has 238 stores in 34 countries. Low-priced product sales conducted via catalog paved way for the first store that was set up in Älmhult  (Sweden) due to the competition in the market. Consequently, competition in the market caused rivals to gang up against IKEA by encouraging distributors to quickly end contracts with the company. Despite excluding it from participating in trade fairs, the competitors eventually did not manage to face out IKEA and thus allowed it to start designing its own furniture. By adopting own designs (vertical integration) and competing in the furniture industry, IKEA experienced increasing product sales (Johansson Thelander, 2009).Internal and external envir onmentConsidered the leader in the furniture sector and with the largest market share, IKEA is currently focused on increasing its global presence by localization strategies in various countries. Despite its reputation as a prestigious and innovative company in the furniture industry, IKEA has to maintain its innovativeness and vigilance in order to remain top.Considering the recent statistics of sales by region whereby Europe’s 81%, North America’s 16%, and Asia and Australia’s 3%, Africa will be expected to contribute, though insignificantly to the company’s turnover. For the fiscal year 2008-09, the company generated revenues of 23.1 billion euros. Turnover according to country rankings places Germany on top, with the United States second. France is third, the United Kingdom fourth and Sweden is least (Central Intelligence Agency. 2009).