IKEA, founded in Sweden in 1943, is the World's largest home furnishings retail chain. It achieved international expansion in three major phases and now operates large warehouse showrooms in Sweden, Norway, Denmark, Holland, France, Belgium, Germany, Switzerland, Austria, Canada, the United States, Saudi Arabia, and the United Kingdom. It also has smaller stores in some other countries. IKEA's mission is to offer a wide variety, good design and good values for "young people of all ages". The furnishings giant has remained determined to maintain a standardised product strategy -- which still remains the core of the IKEA approach. By following the approach, IKEA maintains a predominantly universally accepted product range with local minor adaptations.
IKEA's mission is to offer a wide variety, good design, good value, for "young people of all ages". The furnishings giant has remained determined to maintain a standardised product strategy. IKEA itself does not own manufacturing facilities. The manufacturers are subcontracted. And it only owns distribution and designs furniture. This allows IKEA to follow a cost leadership strategy through high volume production and standardised items. IKEA consumers expected to supply their time for assembling work after purchase, thus becoming a part of the IKEA concept becoming "prosumers".
2.1Case Question: What has allowed IKEA to be successful with a relatively standardised product and product line in a business with strong cultural influence? Did adaptations to this strategy in the North American market constitute a defeat to their approach?
The key reason behind IKEA's breakout success was because if its customer focused approach. The focus on customers' needs has been achieved because they were not selling through dealers. This allowed them obtain feedback directly from customers. Moreover, IKEA does not deem itself as just a retailer. But rather, it operates as a central hub of a number of...