IKEA AUSTRALIA

IKEA Australia

IKEA Australia

Introduction

IKEA is the leading manufacturing firm, engaged in the manufacturing of furniture. Since its inception, IKEA has maintained a distinctive position among its competitors, thus enjoying an overwhelming competitive advantage. It has always enjoyed a formidable position in this particular sector (Lowenstein, 2007, pp.24). Now, IKEA is planning to launch jewelry brand in Australia market, as they are facing stiff competition and slumping profits.

Understanding of Target Market

Australia is one of the fastest growing markets for jewelry in the world. According to a number of researches, at this time the world market of jewelry in Asia pacific region lies around 31.2 per cent in the world. Australia enjoys a major share in this comprehensive chunk. Designs are usually developed by suppliers themselves, independent designers and independent “name” designers. Products may then be manufactured in-house. Gemstones and precious metals used in making jewelry and may be purchased from a variety of sources. Purchases are often from suppliers with which market players have long-standing relationships and contracts with suppliers can result in switching costs being incurred. Suppliers of unique products such as one-carat (or greater) diamonds tend to exert stronger supplier power due to the fact that such inputs tend to be increasingly scarce and more difficult to acquire. Retailers may also purchase finished jewelry from manufacturers. Such suppliers have less power over market players due to the fact that they are numerous and switching costs tend to be fairly minimal. Manufacturers of finished jewelry also face the possibility of market players backwards integrating into their business area (Mcdermott, 2007, pp. 80). Overall, supplier power in this market is assessed as moderate.

Competing Brands and Marketing Communication

There are a number of retailers in the jewelry industry of Australia. Major competitors are Pandora, Redox Jewelry Studio, and Diamond Jewelry Studio. Pandora has positioned its marketing communication campaign on special moments of life. The tag line is “Unforgettable Moments”. The marketing communication is a highly intended towards emotional inclinations. Myriad pictures depict various emotional scenarios. The brand's marketing communication is stimulates a psychological enticement. Other retailers and suppliers including Redox Jewelry Studio and Diamond Jewelry Studio have positioned their brand communication strategy towards contemporary fashion. It stimulates the feeling in customers' minds as modernization and style.

Emerging Opportunities

Entry to this market may be achieved by starting a brand new company or by diversifying an existing company into jewelry. It is possible for a new entrant ...