International Strategic Marketing Management
Success Factors of IKEA
IKEA is one of the most successful furniture retailer’s worldwide. The factors that contributed to this success and distinguished IKEA from its competitors will be monitored in the following analysis.
First, IKEA has found “niche” to serve. The fact that they are producing “Scandinavian style” products makes them unique. Their idea of offering a very broad range of products, with limited style variations, the bold colors and the typical Scandinavian names, has created a very strong brand image and also a high recognition value of its products. Also, their slogan “Design with meaning” distuingishes them from their competitors. IKEA offers stylish furniture at low prices. Usually you either have the choice between low price and low degree of stylishness or both up high. IKEA has found its place “in between”, where it has been working efficiently for decades. By designing and building their products “themselves”-by choosing the most efficient designers and producers etc out of a “pool”-, they have set the basis for a very efficient pricing strategy, which helps them to keep prices down low, and for a unique style.
Second, IKEA has set up a very unique concept that perfectly fits its mantra. In order to save costs, they are pursuing a strategy of self service. The customers chose their products themselves, get them from the warehouse, transport them home and assemble them. This helps them to save costs. IKEA has, for instance, implemented flat packages for their products. With this packaging method they can save transport costs, since they save space and IKEA can thus ship more products at once. Furthermore it supports the idea of customer self service, since you can easily transport the flat packages in your car, to carry the products home. Moreover, IKEA is constantly redesigning its products, which helps them to save money and thus keep prices stable or even lower them.
Third, IKEA is very focused on the customer. They want to involve the costumer. They want to build up a partnership with the customer, where they can support each other mutually. This is reflected in the self-service of the costumer, the “advice” boxes in the IKEA stores, but, for instance, also on their homepage where they advice their customers to come prepared to IKEA. They even want to help them to “shop more efficiently”. As IKEA puts it they want to “side with the many”. They want to make style and function available for “the broad range”. This focus helps them to build up a high degree of costumer loyalty.
Forth, IKEA shops have a much elaborated layout, which has been carefully designed. When you enter the shop you walk through sceneries of kitchens, dining rooms and bath rooms, which together with the bright colors create a very homely and inviting atmosphere. The fact that you can “try out” the furniture, helps clients when making their decision. Moreover, IKEA is providing the costumer with a lot of extras. At the entrance you get anything you may need for your shopping tour. From pencils, guides and measuring tapes, to bags for small shoppers and special carriages for the flat packages to transport them to your car. If required you also find assisstance “on location”. IKEA also has big parking spaces, special playing areas for children to ensure their parents a stress-free shopping tour and restaurants to satisfy hungry “hunters”.
Another important point is IKEA’s corporate culture. Employees work together on a first-name basis, which leads to a virtually non existent hierarchical order within the company. Furthermore, the company wants its employees to strongly identify with its strategy of saving costs. Employees turn off non used computers and lights and also managers take buses instead of expensive caps in order to keep costs low. The strong identification and “passion” of its employees for IKEA concept, helps the company to keep it...