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 habits...