Economics Essay Example | Topics and Well Written Essays - 1500 words - 17

Economics - Essay Example The company adopted the policy of its founder which desired a typically Swedish touch in the product, the company ‘emphasized its Swedish roots in its international advertising, even going as far to insist on a Swedish blue and while color scheme for its stores’ (IKEA Website). The company launched and expanded its operation without surveying the requirements and reaction of the public. Before 1994, the IKEA has less than 10 outlets, and only one of the outlet was located outside Scandinavia, the expansion of the company internationally, was responsible for the magnificent rose in its annul reserves. In 1994, the annual reserves of the company stood at $210 million, and had 125 outlets in 26 different countries; the company reported sales of $5 billion. According to the 1994 statistics, only 11% of its sales were generated in Sweden, 29.6% came from Germany, 42.5% from the rest of Western Europe, and 14.2% from North America. The inauguration was attributed with the launch of IKEA concept and its development, the organization expanded its operation and services in United States in 1987, and the organization is operating more than 13 outlets in the United Kingdom. In 2004 the IKEA reported total sales worth 12.8 billion euros, the United Kingdom had the second highest sales with 12% of worldwide turnover, equating to over  £1 billion sterling (IKEA Website). The organization considers its catalogue of significance, the catalogue is our most important marketing channel (IKEA Website). According to the market survey, the IKEA catalogue is considered to be the major share leader of the retail direct marketing door-to-door distribution activity inside United Kingdom, the organization delivered more than 13 million catalogues. The company understands that, the catalogue is a vital brand builder for IKEA and the key driver for attracting customers to the stores (IKEA Website). The organization planned to increase and improve its

Luxury company in the African market Research Paper

Luxury company in the African market - Research Paper Example Some of the notable countries that have continued to register increase in the number of dollar billionaires include South Africa, Nigeria, Kenya, Angola and Libya among others. Through the large investments in terms factories and farming, the wealth class has created many opportunities that have positive impact on the living standards of the middle class individuals in the rural areas. This paper seeks to discuss the entry strategies and the opportunities as well as limitations that Mercedes-Benz Company, a renowned manufacturer of luxurious vehicles would face in the Kenyan market. In its effort to enter Kenyan market, Mercedes-Benz a German based company will have adequate opportunities that will make the company achieve high sales and profits. Being one of the countries based in the East African region, Kenya population stands at 43 million people. The country headquarter is based in Nairobi with an estimated population of 6 million people in the year 2013. Based on the high deman d as the result of the increase in population, wealth individuals who most of them are allocated within the city of Nairobi, the demand for luxurious products has risen (Kitching, 2011). Even though the demand for other luxurious brands such as clothes and shoes, mobile phones and electronics is high, the demand for motor vehicle brands especially among the young and old rich Kenyans has drastically gone up (Daniel, 2011). Kenyan currency in referred to as Kenya Shillings (KSH). The country GDP stands at $79,890 billion. The key sector that has contributed to the Kenyan improved economy includes tourism that contributes up to 60% of the GDP. Tourism in Kenya is the main source of foreign exchange. For example, in 2012, tourism generated more than $900 million. Other sectors that have significantly contributed to the GDP include agriculture that contributes approximately 25%, industry and manufacturing with a contribution of 15% and energy. The increased foreign currency has positive ly impacted on the investment in the countries thus resulting to more job opportunities. Opportunities One the major opportunity that Mercedes-Benz will face is the high demand of its brands especially by young and reach people working in the tourism sector as well those in the music industry. The improved transport system in the city of Nairobi and other towns such as Mombasa and Thika has opened investment opportunities in the city. As a result, large companies have highly invested in Kenyan capital and its outskirts. Some of the notable companies that employ large number of people include Safaricom, East African Breweries, Daily Nation Company, British America Tobacco and Delmonte Company among others. In addition to the large amount of tax the companies pays to the government, the firms have resulted to increased household income not only for the top managers but also for other employees. This implies that by establishing a branch in Nairobi and Mombasa, Mercedes-Benz will effec tively meet the increased demand of its brands. Kenyan market for luxurious motor vehicle is unexploited (Aldwin, 2010). This implies that the company will not face stiff competition from other companies. Additionally, the countries offer