CASE STUDY IKEA INVADES AMERICA

Upload document Create flashcards. In contrast, most high-end specialty retailers offered luxurious store environments designed to conjure up aspirational images of affluence, prosperity, and comfort. There are three main factors that account for its continual success in the furniture retailing industry: However, on a smaller scale, IKEA is a warehouse of products and since they do not give any additional services after a purchase is made, relationships cannot go much further. This benefits IKEA in its attempt to cut costs for its consumers. The low end also consisted of smaller shops that offered cheap furniture to price-sensitive customers; many of these shops targeted college students and others on a tight budget. For the first time customers could see and touch our furnishings before ordering.

Do you think IKEA is being overly optimistic in its growth plan? In contrast, most high-end specialty retailers offered luxurious store environments designed to conjure up aspirational images of affluence, prosperity, and comfort. Specialty retailers also competed heavily on quality and service. By doing so, the goal of 50 stores in is not far from reach. The low end also consisted of smaller shops that offered cheap furniture to price-sensitive customers; many of these shops targeted college students and others on a tight budget. To expand total market size, IKEA should use both new market segment and market penetration strategies.

Furniture is introduced into the IKEA product range.

The furniture showroom is opened in Almhult. Instead, its network relies on peer-to-peer coordination between drivers and passengers, enabled by sophisticated software and a clever reputation system. IKEA is founded by Kamprad. For example, a product like a table would have four category types sleek wood, minimalist, neo-traditional, bare bones and three price ranges high, medium, low Moon, The environment in these stores usually reflected their low-price focus—they were generally dreary and dingy, with haphazard product displays and inconsistent, poorly managed inventories.

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IKEA Invades America – Case – Harvard Business School

No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. Do you agree with the matrix approach described in Figure B of the case? These changes, if made, will provide the company with comprehensive reports on which products are missing in accordance with its competitors in addition to the gaps in price points Moon, However, IKEA faced several challenges: This could mean an exclusive line of fur rugs for the colder regions or collaboration with local artists resulting in a line of paintings, bedding, etc.

case study ikea invades america

There are three main factors that account for its continual success in the furniture retailing industry: Trial and research tanks. IKEA begins testing flat packages. Customers often discovered that IKEA products fell apart after a few years and had trouble enduring anything as unsettling as a move to a new place Moon, From that point on, we began to think in terms of design for flat packaging.

See Exhibits 1 through 4. S price and qualitybut instead use them as benchmark and focus on its niche.

IKEA Invades America

Moreover, Ingvar was able to create relationships with local manufacturers in the forests close to his Scandinavian home Moon, The fact that IKEA hopes to have fifty stores in operation in the United States by is an indication of how optimistic the company is about the viability of its value proposition in this country. The difficulty is when you try to create the totality of what we have.

Inwhen Ingvar was 17, his father gave him a gift for succeeding in his studies. Most of the time, beautifully designed home furnishings are created for a small part of the population—the few who can afford them. On a global scale, IKEA does a exemplary job at building relationships with its customers by creating aesthetically pleasing yet affordable designs.

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We have decided to side with the many. In what other ways should the company consider changing its product lineup? About the Author Youngme Moon.

case study ikea invades america

Should the company expand its product lineup to include a greater number of styles and price points? Kamprad soon made the decision to discontinue all of the other products and focus directly on low-priced furniture, and the IKEA we know today was born.

case study ikea invades america

In many ways, the stores resembled modern theme parks, with their childcare centers featuring large climbing structures and flamboyant playthings and their restaurants serving delicacies such as smoked salmon, Swedish meatballs, and lingonberry tarts.

To reassure customers that the furniture they were buying would last a lifetime.

Business Case Studies : IKEA Invades America – Low Pricing Strategy

But despite its remarkable early success, Uber is an extremely polarizing company. This was obvious from the invvades first day we took the legs off a table and put it in a car. And if they needed assistance with shopping, they could stop by a sales desk and speak to an IKEA representative.

Company Background IKEA was founded in when year-old Ingvar Kamprad decided to start a local catalog company using some money his father had given him.