IKEA is an international and most famous home products company, known for designing and selling ready to assemble home accessories, appliances and furniture. Its mission is to offer the broad range and variety of the home furnishing products, mainly of good functions and designs, and best quality at very reasonable prices. Its vision is to provide and create the better and convenient everyday life for its customers. IKEA has faced tremendous competition, but still managed to retain its leading position because of its marketing strategies. It actively responds to the changing social trends and patterns, and try hard to fulfill the demand of the people in the same way. It provides innovative designs (IKEA, 2018). Here is the BCG matrix analysis of the IKEA products.
Cash Cows
The products falls in this category are market leaders, as it brings more cash than invested. But these products have low market growth with high level of market share. IKEA’s food is famous all around the world, and consider as the cash cow for the company, because of its amazing taste and quality, yet it has the potential to grow, which IKEA needs to understand. IKEA should invest more in this segment for maintaining the level of productivity, or in other words, “to milk the gains” more passively. It can open its restaurants to entertain the consumers who are only looking for good food or restaurants. Moreover, its home appliances are also fall in this category, as there are large number of customers, who wait for the IKEA discount offers and sales to buy the home appliances and other accessories (Lim, 2007).
Stars
These are the best products of segment for the business, as it has the high market share along with high level of growth rate. This means that it brings more in return than the investments. First-to-Market products of the company are termed as the stars. There is a threat that these products might turn into cash cows, if the strategies are not monitored continuously. IKEA is mostly known for its ready to assemble furniture, and it is the start for the company. However, for sustaining the market position and the star category, IKEA always respond to the latest fashion trends, and satisfy the consumers in the same way. It continuously monitors its marketing and pricing strategies, to bring more unique and innovative designs in most affordable rates to the consumers (Bhasin, 2018).
Question Marks
These products in the business have usually high growth level but the market shares are relatively low. It shows that these products consume much of the investment, but returns are very low as in comparison. In other words, these are also known as problem children of the company. However, they have the potential to be start products if the business unit grows. For IKEA, its textile products fall in this category, because of the strong competition from different companies like Linens, denim etc. the company was suggested to invest more in this segment, as it has the potential to grow, and because of the strong brand position, it can capture the market (Slideshare, 2018).
Dogs
These products are at break even, which are not bringing much or consuming much investment of the company. Thus, it has both low market share and low growth level. Shutting down the operations of this might be more beneficial for the company as the invested funds can be use somewhere else. Children toys can fall in this category in some country, however, IKEA make sure to maintain its trategies so well, that it grows every year (IKEA, 2018).
References
Bhasin, H. 2018. Marketing Strategy of IKEA. [Online], Available at: https://www.marketing91.com/marketing-strategy-ikea/, [Accessed on: 12th August, 2018].
IKEA, 2018. About us. [Online], Available at: http://franchisor.ikea.com/the-ikea-concept-2/, [Accessed on: 12th August, 2018].
Lim, W. 2007. Make room for IKEA. [Online], Available at: https://coolerinsights.com/2007/06/make-room-for-ikea/, [Accessed on: 12th August, 2018].
Slideshare, 2018. IKEA marketing management. [Online], Available at: https://www.slideshare.net/Didemahin/ikea-marketing-management-presentation, [Accessed on: 12th August, 2018].