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IKEA Essay

University/College: University of Arkansas System
Date: November 21, 2017
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IKEA Essay

This essay will illustrate the enlargement of KEA via profit, the number of visitors and customer satisfaction; and some trouble that it overcame when establishing Kike’s stores before discussing several potential risks such as the lack of stores, local competitors and old technologies in China. To begin with, the amount of sales in China was reported positively by KEA in 2013 was assessed as a fastest-growth market over the world in the total income in the fiscal year ended August. 31 occupied 37$ billion compare with 35. $ billion in the same period of time last year dens Hanged, 2014). In addition, although China Is the country which has the arrest population In the world, the number of visitors who go to KEA stores Is really Impressive. Take Kike’s flagship store In Belong Is a great example, this store welcomed 28,000 customers on a Saturday that Is scalar with the amount of weekly customers In an KEA store In another country and more than 6 million visitors In 2011, which was recorded as the biggest-volume for KEA in the world (lens Hanged, 2012).

Besides that, the most vital reason for the development of KEA is the satisfaction of Chinese consumers. To be specific, KEA stores supply countless ordinary furniture for people so that it is easy to purchase everything here. Furthermore, Chinese customers often feel comfortable and relaxed when they go to KEA stores because they can enjoy every modern equipment although maybe they do not have plan to buy It. For instance, many Chinese people go to KEA stores to relax by listening music, reading book as well as sleeping In convenient sofas or beds.

Nevertheless, before receiving success In China, KEA has experienced a large number of difficulties. First of all, one of the primary challenges was that the cost of KEA products Is cheap In America and Western countries; however It was quite expensive with Chinese customers who tended to consume the local products with labor and raw materials and they do not need to pay money for design costs (Chug, Girdler and Sod, 2013).

To deal with this problem, KEA constructed many factories to manufacture products and using local materials, so it helped to reduce a large sum of money which was spent for import taxes in China so that since 2000 KEA tortes in China has decreased their products prices by nearly 60 per cent (Chug, Girdler and Sod, 2013). What is more, KEA changed the aim to a younger clientele, this group had higher levels of education, is better incomes and tend to be favored western culture.

KEA, therefore, has become a symbol of the aspirations for young middle-class Chinese people. Additionally, there are also several potential risks which KEA need to overcome. In the first place, as a consequence of online catalog, a large number of companies can Imitate the designs of SKIES products and manufacture the similar furniture as well as purchase it with lower prices and the Moreover, “since 1999, KEA has been working on becoming more CEO-friendly’ (Chug, Girdler and Sod, 2013).

They tend to consume plastic bags and increase the using of green energy in KEA stores around the world; nonetheless, it is a major barrier when implement in China. Chinese customers do not want to bring their own bags as well as pay more money for using renewable bags. Furthermore, China lacks essential technologies to produce green items which can meet the demand of Kike’s tankard (Chug, Girdler and Sod, 2013).

Last but not least, the lack of KEA store in China, currently, many Chinese people want to go to KEA stores but they cannot because KEA do not has stores in their city; hence they have to choose others competitors of KEA such as B&Q, JOBS and JAYS. By way of conclusion, KEA has experienced numerous alterations and difficulties during 16 years of the construction and the development from the first store was established in 1998. Overall although there are some problems remain, KEA is still one of the largest retailers in China as ell as the globally.

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