IKEA investment business plan

IKEA INVESTMENT
PLAN 2022


TABLE OF CONTENTS
1. EXCUTIVE SUMMARY ...................................................................................................... 3
2. COMPANY DESCRIPTION ................................................................................................. 5
2.1 Founder & Board .............................................................................................................. 5
2.2 Product and Service .......................................................................................................... 8
2.3 Long-term aim of the business ....................................................................................... 10
3. MARKET ANALYSIS ........................................................................................................ 14
3.1 Targeted market analysis and valuation ......................................................................... 14
3.2 Market outlook in Vietnam............................................................................................. 14
3.3 Market trends in Vietnam ............................................................................................... 17
3.4 Profile of competitors ..................................................................................................... 18
3.5 Competitive advantage, project’s benefits and benefits to clients.................................. 18
4. MARKETING STRATEGY ................................................................................................ 19
4.1 Segmentations & Targeting ............................................................................................ 19
4.2 Differentiation and positioning....................................................................................... 20
4.3 Value proposition ........................................................................................................... 20
4.4 Marketing mix ................................................................................................................ 21
5. RESEARCH AND DEVELOPMENT ................................................................................. 24
5.1 IKEA and the Ansoff Matrix .......................................................................................... 24
5.2 Product research and development ................................................................................. 25
6. STAFFING AND OPERATIONS........................................................................................ 33
6.1 Management (including Board) Organisation Chart ...................................................... 33
Figure 3. Management Organisation Chart ......................................................................... 33
6.2 Staffing ........................................................................................................................... 34
6.3 Operations ....................................................................................................................... 41
7. FINANCIAL PLAN ............................................................................................................. 43
8. SALES PIPELINE ................................................................................................................ 46

8.1 Prospecting customers’ data collection .......................................................................... 47
1


8.2 Customers qualification .................................................................................................. 47
8.3 Sales call, proposal and negotiation ............................................................................... 47
8.4 Close deal ....................................................................................................................... 47
8.5 Post purchase .................................................................................................................. 47
9. FUNDING REQUIREMENT............................................................................................... 48
9.1 Total funding requirement .............................................................................................. 48
9.2 Sources of fund ............................................................................................................... 48
9.3 Fund allocation ............................................................................................................... 49

TABLE OF FIGURES
Figure 1. Vietnam’s Predicted market revenue in million USD (2017-2025) ..............15
Figure 2. Vietnam’s Furniture Market Sales Channels (2017 - 2025) .........................16
Figure 3. Management Organisation Chart ..................................................................33
Figure 4. Funding allocation chart of IKEA branch in Vietnam market ......................49

2


1. EXCUTIVE SUMMARY
IKEA, the successful Swedish furniture brand, has become a household name not just
in its homeland, but also internationally. IKEA furnishings inhabit homes around the
world. IKEA desires to run the business with efficiency in each of the different areas,
such as design, distribution, packaging and sourcing. It’s all about keeping the costs as
low as possible while still selling good quality furniture.
Purpose of the plan
Considering the potential nature, IKEA would promote investment in Vietnamese

furniture market. This is the report for our business plan to build IKEA brand in Vietnam
through a chain of stores in Ho Chi Minh city and marketing strategies as well as
innovative developments. The products will be made and supplied for Vietnamese
customers with affordable prices, fully functional furniture that’s well designed and
doesn’t skimp on quality. The plan permeates through the business with efficiency in
each of the different areas, such as design, distribution, packaging and sourcing.
Products
IKEA designs and sells pre-assemble and ready-to-assemble furniture, kitchen
appliances, home accessories, and various other goods and home services. IKEA offers
a variety of affordable furniture available in different styles that complement your home.
The Group’s furniture range from bedroom, kitchen, bathroom to outdoor furniture.
Advantages
The IKEA Concept
IKEA provides a wide range of well designed, functional home furnishing products that
can target every customer. The IKEA Concept makes it possible to serve the many that
contribute to helping more people live a better life at home.
Favorable cost position and quality guarantee
IKEA offers favorable prices to its customers. Price of IKEA includes warranty services
to guarantee quality for customers.
Flexible adaptation
IKEA is seen as a retailer that is diligent in balancing its general business environment
and consistent business model by adapting to local cultural levels. With IKEA, “The life
situation creates the need for home furniture”. IKEA selects the offer from the life
situation to satisfy every need of the customers.
Flatpacks and self-assembly
The feature helps the cost of furniture to fall and inspires customers to make useful
products on their own based on given instructions.
Market opportunity
3

Customer
Vietnam’ furniture market is a promising market to invest in as it is forecasted to grow
at a rate of 17.35% each year over the next ten years, resulting in a projected market
volume of $3,106 million by 2025. In furniture, the number of users is expected to reach
21.7 million by 2025.
According to Nielsen, by 2025, Gen Z in Vietnam will account for about 25% of the
national labor force, equivalent to about 15 million people. IKEA will cater to GenZ and
millennials in Ho Chi Minh City, Vietnam, between the ages of 20 and 45. The rising
Vietnamese middle-class and small businesses would be a key driver for IKEA’s
business in Vietnam.
Technology
The packaging technology system is built to be suitable with IKEA’s diversification of
products and to fulfill a lot of different demands. In-store logistics personnel technology
would be executed to streamline the flow of goods in and out of its stores. Ikea Kreativ,
a built-in analyzer App, is on the run to help users estimate the size of the furniture
virtually.
Competition
IKEA will have to compete with local furniture shops that have gained prominent
Vietnamese-brand market share. However, Affordable home furniture, Easy for DIY
and Sustainable are IKEA’s core values that would differentiate it from other rivals in
the market.
Management team
The IKEA Group will be organized in four following Departments: Operation,
Marketing, Financing and Commerce.
Financial projections



Income sources: the company’s revenue is primarily from sales of its products in

Vietnam market including 18 main categories.
Expenses: the company’s expenses is from salaries and wages, equipments and
supplies, marketing, R&D and administrative costs. They are based on
managemnet;s estimates and industry averages.

Funding requirements
The investments of IKEA in Viet Nam market are expected to account for 450 million
Euro which will consist of 30% of the investment coming from shareholders, 20% from
retained earnings, 30% from cash borrowed from banks, 10% from Debenture, 10%
from Trade credit.
4


2. COMPANY DESCRIPTION
2.1 Founder & Board

Ingvar Kamprad
The Founder of INKEA

Supervisory Board

5


Luisa Delgado
Chair and Board,
Director, Entrepreneur,
Investor, Advisor and Mentor

Lars-Johan Jarnheimer

Chairman

Lone Fonss Schroder
Director

Mark Newton-Jones

Peter Kamprad

Retail CEO, Chair,

Chairman of the board

Non-Exec Director

6


Ian Worling
Member of the
Supervisor Board
Tore Bertilsson
Professional Board Member
and Industrial Adviser
Jonas Kamprad
Member of the
Supervisory Board

Management Board

Juvencio Maeztu
Deputy CEO and Chief
Financial Officer

Jesper Brodin
President and CEO
7


Kurt-Jörgen Olsson
General Counsel

2.2 Product and Service
IKEA covers product design with innovative home furnishings that are cost effective.
Providing this outstanding product experience is only made complete by wrapping an
amazing service experience around it.
 Service Design of IKEA
The design of the service, not the design of the items, is what made consumers' weekend
visits fantastic. When done correctly, service design delivers a unified customer
experience at all points of contact between the business and the client. There were three
crucial components that were effective:
 Website-store experience integration
To discover the precise goods they wish to see in the shop, customers can explore the
internet. The precise aisle and bin where customers can pick up the item are listed in the
product information for the shop where they may look at the item.
 Self-checkout
The bulk of our trips to IKEA were spent browsing the merchandise rather than standing
in line because of the store's rapid checkout process.
The aforementioned features were all a part of a comprehensive service design that aided
in enhancing client satisfaction and boosting revenues. Customer purchases depend just

as much on service design as they do on product design. We were able to shop in
methods that were convenient for us thanks to the IKEA ecosystem.

8


Service design will begin to receive more attention than product design, similar to how
the user experience industry transitioned from usability to the more expansive subject
of user experience. It is harder to distinguish oneself in a way that cannot be easily
imitated as market rivalry increases. A major tactic for differentiating your business is
to jointly design the product and service experiences.
Changing to a holistic strategy for user experience is a difficult endeavor that frequently
conflicts with an organization's existing organizational structures. However, the
consumer can only have a comprehensive business experience when the product and
service are combined.
Organizations must get through departmental hierarchies that might be resistive to this
kind of thinking. As UX professionals, we should put our efforts into developing service
and product interactions that stick in consumers' memories for a very long time.
 Product
Bedroom Furniture
Bedroom Furniture is a collection of Wardrobes Beds Chests of drawers & drawer units
Bedside tables Mattresses Duvets Bedding Clothes boxes. In the conception of bring
home owners the comfortable, cozy sensation and the feeling of closeness, Ikea products
will satisfy the hardest customers, give people choice to enrich their home feelings and
better look through the bedroom collection.
Kitchen Furniture
In order to create the best atmosphere to gather family, have dinner and to talk about
one’s days, Ikea is here with 40 years of kitchen experience, giving customers fully
customizable options for every cooking need and convenient services from planning to
installation. Ikea has 3 main kitchen systems to match with anyone’s requirements:

 Metod
Flexible system: design your own kitchen, many options for styles and fronts, matching
appliances, 25 years of warranty
 Enhet
Create your own combination, easy to assemble and disassemble, 10 years of warranty
 Knoxhult
9


Basic kitchen for basic cooking needs, affordable
Bathroom Furniture
Turn your bathroom into your very own at-home oasis with multi-functional and greatlooking bathroom accessories to suit your bathroom décor. Ikea provides Order-andInstal service to help customers save the most of the time for their bathroom.
Outdoor furniture
During the summer months your garden or balcony is like an extra living room. That's
why IKEA places high concentration for outdoor items. In the shopping list, customers
can find the most populair outdoor series, top products and inspiration and styles of
IKEA garden furniture.

2.3 Long-term aim of the business
As the first IKEA branch in Vietnam, 100% equity is directly invested by the IKEA
Group with human resources including key staff who are transferred from the IKEA
group. IKEA Group will be responsible for the design, finance, management, and other
parts are local people. The main product that supplies the Vietnamese market is
furniture. Planning to build a domestic factory, thereby the cost will be reduced by about
20% to match the needs of the domestic market to capture a large market share.
In the long run, IKEA hopes to become one of the best furniture companies in Vietnam,
expanding the market to many provinces and cities. IKEA furniture turn into a "national"
furniture brand, accounting for more than 70% of the furniture in Vietnamese
households, standing in the top 5 of the list of favorite choices of young people.
Objectives

 Infrastructure: Complete the construction of the factory in 1 year
 Profitability: Make profit after 2 years of operations in Viet Nam
 Productivity: Commodity output remaines at a stable level
 Product:
 Create products with standard quality
 Update and select models suitable to the target market demand.
 Service
10


 Customer service: Make customer satisfy with the positive experience in
online web as well as offline store.
 Shipment service: Make fast and careful shipment to avoid damage to the
product
 Employee
 Gender diversity
 Healthy working environment Secure
 Safe work place
 Health & safety management system
 Motivation and satisfaction
 Work-life balance
 Planet Responsibility
 Reduce greenhouse emissions by reduce the carbon footprint from stores
SWOT Analysis

Strength

Weakness

IKEA has to acknowledge its weaknesses

Brand Image

IKEA ranked 41st among the best global in order to improve and manage them.
brands aroung the world in 2006 with a This can play a key role in helping it to set
brand value of $8,763
Strong

internationally

objectives and develop new strategies
known

brand

attracting key demographic customer Not enough distribution channels.
groups

For eg: There are only three retail shops

Strong brands enhance customer loyalty in Hong Kong
and lead to repeat purchases
Problem of product recall due to faulty
Cost efficient

base.

Low price

For eg: IKEA had recalled Parodi and

No compromise in quality

Apelsin glass cases

11


Unique business model

IKEA is a global company, so product

Own industrial group, Swedwood, which standards are difficult to maintain. Some
produces

wood-based

furniture

and countries where IKEA products are made

wooden components

do not implement the legislation to

Its operations cover every step of control working conditions
production, from forestry, saw milling Swedish designs not appealing to
and board manufacture to furniture

American customers

Efficient productions which enable it to
maximize productivity and minimize Limited Furniture Designs – IKEA had
waste-generation

limited furniture designs which could

Own design group which can makes sure obviously not cater to a wide range of
that their products matches the trend of customer needs and preferences
the industry

Good relationship with suppliers
Maintained long-term partnership with its
suppliers
Ensures that the company has access to
high-quality

materials

at

reasonable

prices

Marketing expertise
Market positioning statement is “Your
partner in better living. We do our part,
you do yours. Together we save money.”
Market on its strengths – based on

offering a wide range of well designed,
functional products at low prices
Catalog – 175 million copies sold in 55
editions and 27 languages (2007)
12


Other promotions include their seasonal
sales, internet deals and television
advertisements

Flat packing that helps in management
Flat packaging, which reduces shipping
costs,

minimizes

transport

damage,

increases store inventory capacity, and
makes it easier for customers to take the
furniture home themselves, rather than
needing delivery.
But the original reason for it was
competitive

pressure

from

IKEA’s

competitors to their suppliers, who
actually boycotted IKEA, forcing IKEA
to do it themselves.

Easy to assemble

One stop shopping

Friendly atmosphere and store layout

Opportunities

Threats

IKEA are moving from International to If a company is aware of possible external
global status through the development of threats, it can plan to counteract them. By
Asia and Eastern European models

generating new ideas, IKEA can use a
particular strength to defend against

Targets all levels of the market, upper, threats in the market.
middle and lower classes
13

With economic concerns over rising
Sourcing from China is one opportunity. living costs and depleting disposable
Sourcing from low cost countries like income there is an overall threat to the
China would reduce its costs and enable performance of the business in UK and
IKEA to concentrate on increasing its American markets specifically
market share
The regulatory environment across the
Bright prospect of online sales

globe vary and can affect how IKEA does
business and its product costs, especially
the use of natural resources

3. MARKET ANALYSIS
3.1 Targeted market analysis and valuation
IKEA will cater to GenZs and Millennials, ranging from 20-45 years old, with middle
income, and small businesses in Ho Chi Minh City, Vietnam.
With generational changes in lifestyle, the interior needs of young Vietnamese people
are now gradually shifting in a new direction: focusing more on convenience and
personal aesthetics while enhancing the sense of conservation and environmental
protection of the community. This trend is specifically popular in Ho Chi Minh City, as
it is considered a dynamic economic city and financial center of Vietnam.
3.2 Market outlook in Vietnam
a.

Market analysis

Vietnam's furniture market has special features compared to other markets in the world;
Although per capita income is not high, the demand for high-end furniture in Vietnam
is not inferior to developed countries such as China, Singapore,... Large city centers such

as Hanoi and Ho Chi Minh City are two markets with a rapidly increasing demand for
high-end furniture.

14


Vietnam’s furniture market revenue is predicted to show an annual growth rate of
17.35%, resulting in a projected market volume of US$3,106.00m by 2025. In the
Furniture segment, the number of users is expected to amount to 21.7m users by 2025.
Figure 1. Vietnam’s Predicted market revenue in million USD (2017-2025)

(Source: Statista)
The booming real estate market is also one of the reasons why the furniture market,
especially the high-end segment, develops. Many furniture and decoration brands from
Italy, Denmark, Germany, and Sweden... are also planning to penetrate the Vietnamese
furniture market. Vietnamese users are more and more interested in living space, paying
attention to the aesthetics and art of interior furniture, not the sensory properties as
before.
b. Sales Channels
According to research, Vietnamese consumers tend to change the layout of their houses
quite often. Customers aged 25-35 rearrange furniture within 6 to 12 months. This group
is particularly interested in modern and convenient shopping experiences.

15


Millennials (those born in 1980 - 2000) are gradually becoming the main workforce in
the world, the potential customers that the Furniture industry has targeted in recent years.
These people are often not interested in visiting and choosing furniture in person at the
store. They tend to choose to buy online for convenience and to save time. Or when

buying products of great value, they will often refer to product information, review on
websites or e-commerce platforms, and come see the product directly at the store. This
shows that e-commerce has a great impact on the buying behavior of today's young
generation.
Figure 2. Vietnam’s Furniture Market Sales Channels (2017 - 2025)

(Source: Statista)
c. Lifestyle
The minimalist trend in the way of life and thinking of young people in recent years has
been having a great influence on interior trends. The interior designs that are simple but
still retain their sophistication and especially are in harmony with many different styles
are gradually dominating the market.
In the trend of minimalist furniture, Vietnamese young people accept to give up
everything cumbersome to find modern, optimal appliances in design to save effort, time
and money. Therefore, RTA (Ready to Assemble) furniture is paid more attention, as
16


the product line of assembled furniture stands out with the emphasis on convenience,
both in terms of functionality and transport, which are the foundation of these products.
d. Concerns & Preferences
Consumers, especially Millennials (those born between 1980 and 1996) and Gen Z
(which refers to people born between 1997 and 2015, coming of age) maturing in the
second decade of the 21st century), are increasingly concerned with social and
environmental issues. This is also reflected in the shopping behavior of this large group
of consumers: they love sustainable products from brands that are in harmony with their
values.
According to Nielsen, by 2025, Gen Z in Vietnam will account for about 25% of the
national labor force, equivalent to about 15 million people, who will guide future
consumption trends.

3.3 Market trends in Vietnam
Young people in Vietnam recently tend to follow a Minimalism lifestyle, so they want
to buy furniture that is simplified and space-saving. Products like that can be practical
for crowded cities such as Ho Chi Minh City and Hanoi, where houses are getting less
spacious. Assembly furniture can also come in handy since it is faster to deliver and
saves the cost of shipping, especially for youngsters whose income is in the low to
middle range.
They also care about the environment. Therefore, they want to purchase sustainable
products that last for long and do not go to waste even when they are damaged. As a
result, industrial wooden material products with good quality and a variety of designs
are highly appreciated.
Millenials and Gen Zs are favoring online shopping, even with furniture, due to its great
benefits in this busy life. Shopping online is quicker and brings more options to
customers in just a few clicks and swipes, unlike traditional shopping that is timeconsuming and less efficient. In case they are not satisfied with the products for
whatever reasons, they can still benefit from a fast and easy return policy.
17


3.4 Profile of competitors
Pho Xinh, Nha Xinh and Nha Dep are one the most prominent Vietnamese-brand
competitors when IKEA tries to enter the furnishing market in Vietnam. Being largescale interior design firms and having great market share, they would make big obstacles
for IKEA on the way to gain trust from native people. UMA and JYSK are also worthmentioning, being European brands that have entered the market long ago, and have
been common names when it comes to furniture.
Nha Xinh, for example, has opened multiple large-scale and professional showrooms in
both Hanoi and Ho Chi Minh city. Their products are designed and manufactured by
experienced staff with the most modern machinery system in Vietnam. This brand has
been awarded the title “Vietnamese high-quality goods”, “Trusted brand”, and “Top 100
suppliers” in recent years.
IKEA, however, has some competitive advantages against its competitors, especially in
customer service and sustainable products.

3.5 Competitive advantage, project’s benefits and benefits to clients
IKEA is a major player in the retail furniture industry. Its ability to satisfy client needs
by utilizing a broad product portfolio and cutting-edge design concepts gives it a
competitive advantage. The IKEA Concept is based on offering a wide range of well
designed, functional home furnishing products at affordable prices so that as many
people as possible will be able to buy them. Rather than selling expensive home
furnishings that only a few can buy, the IKEA Concept makes it possible to serve the
many that contribute to helping more people live a better life at home.
The company has also launched a range of add-on services like home delivery,
installation, assembly service, and free pick up for product returns.
IKEA also uses a unique direct delivery system, where goods are transported directly
from its warehouses to its customers’ homes. Through this strategy, it has managed to
gain customer loyalty.
IKEA employs an interactive website to give customers thorough product information,
including instructions on how to assemble the products based on the preferences of their
18


end users. It is also one of the few businesses that offer customers the ability to
customize products before making a purchase.
IKEA is seen as a retailer that is diligent in balancing its general business environment
and consistent business model by adapting to local cultural levels. This is the reason
why typically, it takes IKEA several years to penetrate into a new market. This is one of
the biggest plus points as IKEA delves into the real demands of customers in the host
country and modifies its products to satisfy them.
IKEA product design comes from a neutral country. Too many retailers have tried to
sell products in their own national style when these products can be completely lost
when entering a new market. Simple design and aesthetic of IKEA fits almost anywhere.
In terms of price, IKEA products are not cheap compared to popular furniture in
Vietnam, but that price includes warranty services that "market" products cannot do.

Moreover, IKEA can guarantee the quality of its products since it is difficult to
distinguish real and fake furniture today. Furniture has many types of products, different
functions, different ways of recognition and no one understands all the products.
Flatpacks and self-assembly are one important feature of IKEA which can be considered
as one of its competitive advantages in the furniture market. Since this concept has been
used, the cost of furniture from this range has fallen. This also inspired designers to take
on the challenge of making useful products that are also neat and minimalist.

4. MARKETING STRATEGY
4.1 Segmentations & Targeting
For household furniture, our target audiences have aged from 20 to 45, and are middleincome customers. They have different preferences as follows:


love to decor their room/house on their own, interested in ready-toassemble furniture



busy with their work, interested in fully-assemble furniture, prioritizing the
safety, convenience, and versatility

For business furniture, we focus on small companies which have rigid budgets but want
to make a modern workspace for employees
19


Different methods should be applied to access different groups of customers so that
IKEA increases brand awareness and our products can meet the right demand:


Conducting monthly and yearly market research on Vietnamese customers’ tastes

and preferences for furniture to update the new trends in the market



Based on the research of customers’ behaviors, give targeted customers favorable
promotions to encourage them to be interested in IKEA products



Cooperate with businesses to introduce IKEA office products

4.2 Differentiation and positioning
IKEA incorporates a thorough understanding of how consumers live at home into a wide
range of design, manufacturing, and retail operations. IKEA manufactures inexpensive
and elegant furniture, as well as cutting-edge furniture designs that customers like.
Furthermore, IKEA items are beautifully designed, reasonably priced, and
environmentally responsible. IKEA's position is described as a supplier of high-quality
furniture at reasonable prices to its clients.

IKEA produces a distinct combination of immersive environments that give interaction,
inspiration, and a distinct shopping experience in which customers can spend time
comfortably selecting the goods they live with every day.
4.3 Value proposition
Affordable home furniture
IKEA’s business plan is to offer a wide range of well-designed, functional home
furnishing products at prices that as many people as possible will be able to afford them.
By using local materials in a novel way and minimizing production, distribution, and
retail costs, their customers benefit from reasonable prices.

Easy for DIY

Much of IKEA's furniture is designed to be assembled by the consumer rather than being
sold pre-assembled. IKEA claims this permits them to reduce costs and use of packaging
by not shipping air; the volume of a bookcase, for example, is considerably less if it is
shipped unassembled rather than assembled. IKEA offers this DIY style of furniture to
20


customers, which not only attracts them to its easy nature of transportation and
assembly, but also to the satisfaction gained from building something from the ground
up.

Sustainable
IKEA is committed to supplying good quality, economically produced designs that are
bought in bulk to keep costs down. By making all furniture flat packed IKEA cuts down
on transportation and assembly costs. IKEA products are subjected to rigorous tests to
make sure that they meet national and international safety standards.
4.4 Marketing mix
Product
IKEA has always focused on delivering to the needs of customers so that the customers
are retained for a longer period. IKEA is very careful in studying customers and then
developing the products according to their needs. IKEA product categories include a
range of furniture items and fittings. It includes home furniture, office furniture, kitchen
fittings, bathroom fittings, book cabinets, closets, kids’ furniture, and many more. There
are further categories in these types as well. IKEA has always focused on developing
and expanding our product portfolio which eventually adds up to the growth of the
company. Besides, IKEA prioritizes producing products that are smart and optimize
utilities. All IKEA products are flat-packing furniture (the parts of the item are boxed
and the customer can assemble them easily). Assembly and delivery services are
provided exclusively for customers if they demand.

When planning to invest in Vietnam, IKEA realizes that this is a place that inherits
abundant resources. To take this advantage, IKEA also focuses on researching,
producing, and developing items made from Vietnamese traditional materials such as
wood, rattan, and bamboo,... but they are designed in modern styles. This allows
Vietnamese people to not only keep traditional culture but also update the world's latest
trends in their own houses.
Price
21


IKEA offers a wide range of well-designed, functional home furnishing products at
reasonable prices with high quality. IKEA produces in bulk, therefore, it is able to keep
its costs low and thereby achieve more sales by selling at an affordable price. When
products gain popularity, it produces more of those particular items and reduces the price
accordingly to achieve more sales. Low-profit margins with high sales volumes lead to
huge profits in the long term for the company. Moreover, labor costs and other
production costs in Vietnam are much lower than in many countries. Therefore, the price
of IKEA products in Vietnam is cheaper than in other countries. Compared to
competitors in the Vietnamese market, IKEA's products will have a middle-price
segment with high quality
Place
We use 2 popular ways to distribute the products:


Offline

In Vietnam, there are a lot of large shopping malls, especially in big cities. For the first
time entering the Vietnamese market, IKEA tends to set up stores in these malls in Ho
Chi Minh City to take advantage of the substantial volume of customers. According to
the latest updated data, the population of Ho Chi Minh City currently reaches about 9

million people. And the number of 20-45 citizens is more than 4 million, accounting for
almost 50% total population in this city.
IKEA stores are all decorated in yellow, white, and blue. Careful arrangement of each
product in the store is also focused to help inspire viewers. This makes it easy for
customers to visualize how they can make the best use of each item in their own homes.



Online

With the advance in current technology and the trend of shopping online, we will build
an official website for exclusively the Vietnamese market. In addition to display all
IKEA products, this provides useful information that helps people to find innovative
ideas to make a dream home.
Promotion
Advertising
22


Print ads and billboards will be set up in public places such as bus stations, shopping
malls, and office buildings where many travelers come on a daily basis to attract citizens
about IKEA products.

Social media (Facebook, Instagram, Tiktok, Youtube) is another important channel to
spread IKEA products to the right customers. Advertising on social platforms will be
employed and assessed monthly to reach high effectiveness and generate qualified leads.

KOLs, Influencers & Celebrities
KOLs and influencers are people who have a big impact on buying decisions of
customers, especially the young generation. IKEA will collaborate with KOLs and

influencers who have knowledge of design and furniture. Additionally, they are
followed by our targeted audiences. These are some KOLs and influencers that can be
suitable to introduce IKEA products and services:

Giang oi

Anh ban than

Dinology

Phuong Ha

Besides, IKEA will collaborate with Vietnamese singers to produce sponsored music
videos. From this, IKEA can increase brand awareness and make an impression on
Vietnamese people. The topic of music videos can be about family, or colleagues in
23


offices, which is consistent with the characteristics and purposes of IKEA products. A
good product placement plan helps IKEA's image and product appear natural but still
impressive enough in music videos.

Sale promotions
 Buyback & Resell
Every year, millions of pieces of secondhand furniture go to waste. We buy back used
IKEA furniture to resell at a much cheaper price than the new ones. With Buyback &
Resell, customers sell used IKEA furniture they don’t need in a safe, streamlined way
year-round. Someone else buys old stuff second-hand. This strategy can allow highquality IKEA products to be accessed by many people as possible.
 Loyalty program: IKEA family
Having an ongoing and strong relationship with IKEA customers plays a key role in

communicating with them directly and learning about their needs and wants. When
customers get involved in the IKEA family, they will receive special benefits such as
discounts, damage covers, and event invitations.

5. RESEARCH AND DEVELOPMENT
5.1 IKEA and the Ansoff Matrix
IKEA's improvement and furnishing chain has more than 9500 types of products in its
range and it launches about 2500 new products every year. The company makes some
of its products in-house, as well as, purchases from suppliers. In order to run efficiently,
and stay up-to-date with changes in customer needs and preference, IKEA follows the
Ansoff Matrix. Ansoff Matrix (the Product/Market Expansion Grid), is a tool used by
IKEA to analyze and plan their strategies for growth. According to Ansoff Matrix, there
are 4 different strategy options available for business, which are: market penetration,
product development, market development and diversification.

Product
24