IKEA Invades America
International Business Management case no.2
1. What factors account for success of IKEA?
* Positioning in the “Scandinavian” – style niche , putting simplicity, design, space –efficiency and low-price in the core of IKEA’s business
* “Experience shopping” – creating a unique experience to customers that makes it fun to spend time in one outlet the whole day and enjoy it; including childcare centre, restaurants they created an entertaining, restful and rejoicing centre, like Disnayland park for grown-ups.
* Also an experience as putting the furniture together and spending time with family and teaching kids how to do it ->turning disadvantage into advantage
* Identifying customers
* Price- and design- sensitive customers; appeals to students and young people who rent apartments and like to change their surroundings (design)
* Cost-efficiency that includes:
* Suppliers management: organizing competition between suppliers for the orders based on price and basic details of the products
* Designer internal competitiveness – getting the freelancers to compete altogether with staff designers to come up with the best mix of design, price and materials
* Transferring costs to customers: do-it-yourself, no after-sale service and just basic customer advice provided at the store , saves costs
* Reducing transportation costs thanks to smart product design (flat boxes)
* Corporate culture focused on reducing waste
* Mixing high quality for the exterior and low quality for the interior materials
* Global supplying extended to developing countries to benefit from low prices as well as ability to coordinate parts assembled in different places
* Marketing strategy
* that managed to promote the Swedish simple and space-effective style expanding the niche to a mass market;
* Ad campaigns that managed to change customers... [continues]
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