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Johnson, Gerry; Scholes, Kevan & Whittington, Richard &

IKEA: how the Swedish retailer became a global cult brand

Johnson, Gerry; Scholes, Kevan & Whittington, Richard &, (2008) "IKEA: how the Swedish retailer became a global cult brand" from Johnson, Gerry; Scholes, Kevan & Whittington, Richard &, Exploring corporate strategy : text & cases pp.708-711, Harlow: Financial Times Prentice Hall ©

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A hybrid strategy (point 3 on the strategy clock – Exhibit 6.2) can be very successful and difficult for competitors to imitate. However, there is a danger that the organisation can drift into a ‘stuck in the middle’ position – being ‘out-flanked’ by both low-priced and differentiating competitors at the same time.

Since IKEA began in 1943 it has grown into a successful global network of stores with its unique retailing concept. An article in Business Week discussed the concept: The Ikea concept has plenty of room to run: The retailer accounts for just 5–10% of the furniture market in each country in which it operates. More important, says CEO Anders Dahlvig, is that ‘awareness of our brand is much bigger than the size of our company.’ That’s because Ikea is far more than a furniture merchant. It sells a lifestyle that customers around the world embrace as a signal that they’ve arrived, that they have good taste and recognize value. ‘If it wasn’t for Ikea,’ writes British design magazine Icon, ‘most people would have no access to affordable con­ temporary design.’ The magazine even voted Ikea’s founder Ingvar Kamprad the most influential tastemaker in the world today. As long as consumers from Moscow to Beijing and beyond keep striving to enter the middle class, there will be a need for Ikea. Think about it: What mass-market retailer has had more success globally? Not Wal-Mart Stores Inc. (WMT), which despite vast strengths has stumbled in Brazil, Germany, and Japan. Not France’s Carrefour, which has never made it in the U.S. Ikea has had its slip-ups, too. But right now its 226 stores in Europe, Asia, Australia, and the U.S. are thriving, hosting 410 million shoppers a year. The emotional response is unparalleled. The

promise of store vouchers for the first 50 shoppers drew thousands to an Ikea store in the...