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Ikea Case Study

By | November 2012
Page 1 of 5
I. Background
IKEA was founded by a young man named Ingvar Kamprad in 1943 with some spare money his dad gave to him after finishing school. He decided to use that money to start his own business. At first IKEA only sold household items at low prices from a catalog but starting in 1947, they began to showcase and sell furniture. In 1951, Kamprad decided to only sell furniture and no other basic household products. After deciding that he wanted to begin his own furniture line and could make lots of money from it, IKEA began designing and selling its own furniture and became well known for its low furniture prices and convenient furniture. In 1956 Ikea began testing and designing flat packages so that the furniture could be easily transported and had to be assembled by the customers. This was done because it saved IKEA money, time, space, as well as made it so that customers could easily transport their purchases home. In 1958 the first IKEA store was opened in Almhult and was the biggest furniture display in Scandinavia, beginning in 1965 opened another in Stockholm. Throughout the years IKEA continued to expand to other countries such as Europe, North America and Asia.

II. Define the Problem
The problem is that IKEA is trying to figure out how to expand its stores within the United States and continue to keep its low prices at the same time. Also, IKEA is so focused on saving money and keeping prices low that they haven’t explored a bigger market reaching out to the consumers that don’t mind spending money to furnish their homes.

III. Questions

1. There are several factors that account for the success of IKEA, the main being their affordable prices. They became a well-known household name because of the decision to sell furniture and household items at a price that mostly anyone can afford and not feel like they are sacrificing their entire paycheck to have a presentable living space. They are able to offer low prices because they...

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