IKEA Case
Table of Contents
Executive Summary 2
IKEA's starting point 2
Opportunities and Issues facing IKEA in the US market 3
Recommended Strategic Alternatives 4
Conclusion 4
Exhibit A: Issue Tree 5
Exhibit B: Porter’s 5 forces 7
Exhibit C: Smile chart 8
Exhibit D: 4Ps of Marketing 10
Exhibit E: SWOT Analysis 11
Exhibit F: Strategic Gameboard 12
Exhibit G: Ansoff’s Matrix 13
Exhibit H: Cost-Benefit Analysis of Recommendations 14
Executive Summary
The following report delineates the furniture retail market in the US, a brief starting point assessment of IKEA, the issues facing IKEA in expanding its current business to the U.S. Market and its strategic alternatives. As expected when a company ventures to new markets, it has to determine how it will satisfy the demands of local customers. IKEA has to find a way to satisfy US consumers. To do so it might have to leverage its brand equity, adopt a product development strategy before it opens new stores or change its current self-service business model and adopt a customer-oriented approach. After consider its strategic priorities I suggest a two-fold strategy: product development coupled with leveraging brand equity.
IKEA's starting point
IKEA is a relatively mature company in the European furniture market but is new to the US market. It has managed to secure the position of the market leader in the European furniture retail market with its "low price with meaning" ethos. It satisfies a unique niche by satisfying consumers with its products without having to raise prices significantly since it minimizes costs throughout its other divisions. This enables it to provide customers with affordably priced products (please refer to exhibit D for analysis of IKEA’s marketing mix). It's self-service business model and it’s in store amenities add value to its business and make IKEA’s brand one of the most valuable in the world. It also differentiates IKEA from its competitors since it would be cumbersome for competitors to copy
Executive Summary 2
IKEA's starting point 2
Opportunities and Issues facing IKEA in the US market 3
Recommended Strategic Alternatives 4
Conclusion 4
Exhibit A: Issue Tree 5
Exhibit B: Porter’s 5 forces 7
Exhibit C: Smile chart 8
Exhibit D: 4Ps of Marketing 10
Exhibit E: SWOT Analysis 11
Exhibit F: Strategic Gameboard 12
Exhibit G: Ansoff’s Matrix 13
Exhibit H: Cost-Benefit Analysis of Recommendations 14
Executive Summary
The following report delineates the furniture retail market in the US, a brief starting point assessment of IKEA, the issues facing IKEA in expanding its current business to the U.S. Market and its strategic alternatives. As expected when a company ventures to new markets, it has to determine how it will satisfy the demands of local customers. IKEA has to find a way to satisfy US consumers. To do so it might have to leverage its brand equity, adopt a product development strategy before it opens new stores or change its current self-service business model and adopt a customer-oriented approach. After consider its strategic priorities I suggest a two-fold strategy: product development coupled with leveraging brand equity.
IKEA's starting point
IKEA is a relatively mature company in the European furniture market but is new to the US market. It has managed to secure the position of the market leader in the European furniture retail market with its "low price with meaning" ethos. It satisfies a unique niche by satisfying consumers with its products without having to raise prices significantly since it minimizes costs throughout its other divisions. This enables it to provide customers with affordably priced products (please refer to exhibit D for analysis of IKEA’s marketing mix). It's self-service business model and it’s in store amenities add value to its business and make IKEA’s brand one of the most valuable in the world. It also differentiates IKEA from its competitors since it would be cumbersome for competitors to copy