The IKEA Business in the UAE According to the Market Demand Research Paper

The IKEA Business in the UAE According to the Market Demand - Research Paper Example In order to acquire the market share and to be labelled as one of the leading businesses in the world, IKEA has its control over the channels of production and distribution (BusinessWeek 2005). Due to the significance of marketing channels for market acceptance and profitability, developing a formal planning process for formulating and choosing channels is vital (Stern & El-Ansary 1982, p. 222). Much of this control is spelt out in its code of conduct that it calls â€Å"The IKEA Way on Purchasing Home Furnishing Products† (IKEA 2010). This code was launched in 2000 (IKEA 2010). It indicates what suppliers should look forward to from IKEA and suggests what IKEA should expect from its suppliers (IKEA 2010). It not only spells out its expectations in terms of legal requirements, working conditions, external environment, and forestry management but also puts a great deal of emphasis on the active prevention of child labour (IKEA 2010). These policies and guidelines will be utiliz ed when implementing the IKEA business in the UAE. As previously mentioned, IKEA’s biggest competitive advantage over other home stores is its low prices. The low prices are the single element that drives IKEA’s cost reduction strategy. This strategy provides the company with its greatest opportunity but also its greatest challenge. The firm is passionate about cutting costs and transferring savings to the customer. This cost-cutting governs the process of design. Therefore, unless a design can be made affordable, it will not end up in IKEA’s showrooms or catalogues no matter how otherwise marketable the item might be.