Swedish company IKEA releases a 300-plus-page catalog each year featuring its furniture in fashionably modern room settings. The 2013 catalog comes in 62 different versions for 43 countries. IKEAâs photo shoots for the catalog take place in one of Europeâs largest studiosâ94,000 square feetâwhich employs almost 300 photographers, interior designers, carpenters, and others involved in making each scene just perfect. The process is very labor-intensive and wasteful because rooms are built up and torn down and often thrown into a dumpster after the photo shoot. The catalog typically consumes 70 percent of the companyâs marketing budget each year. However, all that is being reduced thanks to technology. IKEAâs catalog is going digital. Instead of a couch or bed or table or entire room, many items depicted in the catalogs are now merely pixels instead of pine. This year, 12 percent of the content online, in catalogs, and in brochures is not even real, and that proportion will increase to 25 percent next year. Using 3-D graphics to create the scenes, IKEA can cut costs and more easily manipulate imagery from one country to the next. Whereas Americans might prefer darker woods, a given living room can be shown with lighter woods for Japanese consumers. Donât expect to find any fake people or pets, however, because 3-D figures tend to look like ghosts.
IKEA has achieved something big. It has become the worldâs biggest furniture retailer by selling the same furniture to the people of 41 different countries, representing vastly different cultures with vastly different needs. And it doesnât seem to be slowing down as it lays out plans to build stores in more and more countries. But adhering to a standardized template for global commerce is only part of the story. IKEA takes great care to properly adapt its stores and offerings so that they appeal to the tastes of each market.
Q1. Visit www.ikea.com and compare a catalog from one country to that of another. What differences do you notice? Can you discern that some photos are 3-D mockups instead of real rooms with furniture?
Q2. Discuss IKEAâs global strategy in terms of the five global product and communications strategies.
Q3. If IKEA can sell a sofa in China for $160, why doesnât it sell the product at that low price in all of its markets?
Q4. Can competitors easily duplicate IKEAâs strategy? Why or why not?
Swedish company IKEA releases a 300-plus-page catalog each year featuring its furniture in fashionably modern room settings. The 2013 catalog comes in 62 different versions for 43 countries. IKEAâs photo shoots for the catalog take place in one of Europeâs largest studiosâ94,000 square feetâwhich employs almost 300 photographers, interior designers, carpenters, and others involved in making each scene just perfect. The process is very labor-intensive and wasteful because rooms are built up and torn down and often thrown into a dumpster after the photo shoot. The catalog typically consumes 70 percent of the companyâs marketing budget each year. However, all that is being reduced thanks to technology. IKEAâs catalog is going digital. Instead of a couch or bed or table or entire room, many items depicted in the catalogs are now merely pixels instead of pine. This year, 12 percent of the content online, in catalogs, and in brochures is not even real, and that proportion will increase to 25 percent next year. Using 3-D graphics to create the scenes, IKEA can cut costs and more easily manipulate imagery from one country to the next. Whereas Americans might prefer darker woods, a given living room can be shown with lighter woods for Japanese consumers. Donât expect to find any fake people or pets, however, because 3-D figures tend to look like ghosts.
IKEA has achieved something big. It has become the worldâs biggest furniture retailer by selling the same furniture to the people of 41 different countries, representing vastly different cultures with vastly different needs. And it doesnât seem to be slowing down as it lays out plans to build stores in more and more countries. But adhering to a standardized template for global commerce is only part of the story. IKEA takes great care to properly adapt its stores and offerings so that they appeal to the tastes of each market.
Q1. Visit www.ikea.com and compare a catalog from one country to that of another. What differences do you notice? Can you discern that some photos are 3-D mockups instead of real rooms with furniture?
Q2. Discuss IKEAâs global strategy in terms of the five global product and communications strategies.
Q3. If IKEA can sell a sofa in China for $160, why doesnât it sell the product at that low price in all of its markets?
Q4. Can competitors easily duplicate IKEAâs strategy? Why or why not?
