A corporate growth strategy permits firms like IKEA to extend their business operations. Additionally, it helps address current and future issues in achieving the firm’s expansion goals. The firm’s growth can be achieved by expanding its product lines, acquiring new customers, or opening additional locations. The firm’s target market and sector affect the growth strategies adopted. IKEA, in its case, focuses on utilizing the market development growth strategy.
Market development growth technique entails selling the business’s existing products to a new customer segment. For example, in 2015, IKEA planned to unveil 13 new stores in addition to the existing 315 (Hitt et al., 2019, p. 250). Also, IKEA was exploring the purchase of land in India to establish new locations in the country. Additionally, the firm increased its focus on online shopping, which was only present in 13 country locations (Hitt et al., 2019, p. 250).
In 2014, IKEA reported 1.5 billion online visits, up from 200 million in the previous year (Hitt et al., 2019, p. 250). The number of visits exceeded the company’s visits to its physical stores. IKEA has expanded the mechanism by growing its click-and-collect strategy, where customers order furniture products and pick up goods at a physical location (Hitt et al., 2019, p. 250). Finally, the company is concentrating on establishing city-center stores with fewer furniture products than most suburban stores (Hitt et al., 2019, p. 250). All these activities will increase IKEA’s customer base; hence, the company focuses on a market development strategy.
Firms, such as IKEA, invest in growth sustainability because it helps them achieve social and environmental goals, thereby enhancing the company’s reputation. For instance, IKEA store roofs are equipped with solar panels, and the company intends to operate 314 wind turbines in nine countries (Hitt et al., 2019, p. 250). Additionally, the firm recycles wood scraps, leftovers, and soft plastic film to produce Skrutt desk pads (Hitt et al., 2019, p. 250). Finally, the company has begun selling solar panels and banned non-LED light bulbs in all its stores (Hitt et al., 2019, p. 250). All these actions will enable IKEA to become a socially and environmentally responsible company in its operations.
Reference
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2019). Strategic management: Concepts and cases: Competitiveness and globalization. Cengage Learning.