After reading the IKEA case, I find following problems,
Reluctance to change furniture: mind set of Americans Americans typically have the mind-set that furniture should last a lifetime, which is not in-line with IKEA’s value that does not include durability in its products. Thus to increase market share in America, IKEA must change the American’s attitude towards furniture as something fun and disposable, furniture is something that add value to lifestyle without incurring too much cost. *
Value added in high-end furniture retailer
As in IKEA motto: low price, there is no delivery and credit services offered. Whereas a typical American furniture retailer (Wal-Mart excluded) offered free delivery service, on top of personal consultation, interior design, credit (easy payment scheme) and huge selection of products. IKEA has to compete not only in price, but also the value added services that these furniture retailers offered as a package together with the furniture purchased. *
Another challenge that IKEA faces in America is different consumer preferences and needs. IKEA originated in the Scandinavia has to modify its products to suit America’s furniture market. Managing sustainable growth for the future
To achieve the 2013 goal, IKEA should apply market leader strategy by expanding total market size, defending and developing its market share. To expand total market size, IKEA should use both new market segment and market penetration strategies. First, it should segment the market to middle-upper class. This particular segment includes young, educated, high mobility home makers that reside in sub-urban America. They are typically open minded and technology savvy which suits IKEA’s brand image and offerings. Second, IKEA should find new users, uses and increase usage volume of its current customers. To do so, it should encourage and cultivate a new concept of furniture as representative of life style. As life style changes...
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