Therefore the use of both the pricing and non pricing strategies is effective for IKEA in marketing it s products. The company treats the short term fixed costs as the sunk costs and the firm can still carry out its operations just like before the total cost revenue can be illustrated in a diagram as a method through which the firm can maximize profits.
Profit maximization will require IKEA to produce at a level where the marginal cost is equals to the marginal revenue. Changes happening in the fixed costs cannot affect the profit maximization in terms of price or output Samuelson, and Marks,p.
The total revenue curve does not change and even on the shape of the curve representing the total cost. There is also the promotion pricing for the sales of goods on special offers. Pricing strategies based on short term goals are used by IKEA group for tactical selling and promotion.
Pricing is also based on setting up a price which maximizes sells, positions the company and keeps the competitors away. Strategies to increase revenue Different marketing strategies have been used by IKEA to increase it revenue. The barriers to entry In order to enjoy economies of scale and to create market barriers for IKEA home furnishing products it is important for this company to adopt better technology and to employ staff members who are highly socialized.
This is one of the approaches which can be used to ensure profit maximization; The concepts of marginal cost and marginal revenue to maximize profit A company can maximize its profits by carrying out operations which see that the marginal revenue is equivalent to the marginal costs.
The capacity processes and planning all connected shows a complex context which has several factors that affect the outcome.
This is at the point where the total cost line slope and the line indicating the total revenue to be equal. Choosing the best marketing strategy to uses is determined by the number of outlets, the location or area to be covered, transportation of goods, competition, and accessibility and so on.
Reference Dicken, P Global Shift. The point of profit maximizing consequently remains the same. Based on this information the company can well determine its optimal output level by setting a price in order to maximize profits.
For the best way of understanding and creating the process map in the best way, a theoretical framework is need which incorporates Process management. The market growth rates are then analyzed. The Boston matrix strategy is also used by IKEA Group for positioning products based on the shares of a relevant market.
Managerial Economics fourth Ed. Also changes in the fixed costs do not affect the shape or the position of all the curves. Proper utilization of the available resources can also help in profit maximization.
This form of marketing covers all people in the population. Another strategy is the diversification strategy which focuses of the development of new products to fit into the new markets. The total cost change will cause a shift on the total cost curve to move upwards in order to reflect the change amount.
This strategy however has the limitation of being wasteful and expensive but still it has help IKEA to provide sustainable products for all the markets segments. Such types of strategies include destruction pricing to knockout competitors, penetration pricing to enter into new markets and existing markets.
Economies of scale give IKEA group a competitive edge when the cost is passed to customers through lowering the prices of goods.
This shows that there is an opportunity of making changes in the timeliness. Some of the marketing strategies include the use of undifferentiated strategy of marketing. This is especially seen as IKEA ventures into new global markets.
Some of the non pricing strategies include advertising strategies, branding strategies, publicity strategy, sales promotion strategy and consumer promotion strategy among others. This is basically done through planning in which the planers decide on the market segment to be targeted.IKEA BUSINESS.
We know you mean business with your business. Because you want to find the right solutions and quality products for your company. In a time-saving way.
Without ruining your finances. Welcome to the all-under-one-roof furnishing company! Whatever product you’re looking for. Whatever service you might need – planning. Business Plan for IKEA Introduction Currently IKEA is in the process of integrating the current functional organization with Business process management.
It is important for IKEA to examine the accuracy of the planning capacity through examining secure capacity and the processes connected to the plan as a sub process to the main. IKEA, the Swedish-founded furniture store, recently unveiled plans for a new location in Oak Creek.
Since then, excitement has been growing around the city. Oak Creek works one-to-one with our business leaders to help ventures succeed.
What can Oak Creek do for your company? Get In Touch. Our City; Emerging Developments. Business Plan.
Executive Summary Business Description Located in Cologne, Germany IKEA a large furniture market that sells well-designed One to two part time employees will be hired each year over the next two to.
The Ikea Business Plan Model. 29 March, by TheBrainGarage. In this podcast episode Frank talks about the beautiful simplicity of Ikea furniture directions and suggests this is a good way to put together a plan for whatever it is you are trying to achieve – just a series of simple pictures, numbered perhaps, but using no words to depict.
IKEA Business Strategy and Competitive Advantage: Capitalising on IKEA Concept Posted on September 4, by John Dudovskiy IKEA business strategy is built upon the IKEA concept.Download