IKEA is an international company which designs house products and sells them in the form of ready to assemble furniture. It is one of the world’s largest furniture companies. It is founded by17 years old Ingvar Kamprad in Sweden in 1943. The most important fact about the company is the attention to control the cost of the products, which allows them to lower the prices. Even today they are continuing to expand in the world by looking forward to new product developments. The number of stores of IKEA in the United States is 14 at the moment and they aim to have 50 stores by 2013. SWOT ANALYSIS OF THE COMPANY
Strengths: The way IKEA packages the products makes the cost lower and provides easier transportation for the customers. Design of the products matches the cultural expectations of the customers in Europe. Cares brand equity and it is well known in America, and people are looking forward for the new stores. Weaknesses: Due to cultural differences the sales of the company are affected. Different cultures have different tastes in furniture which can be seen in the difference between American and Sweden cultures. Materials used to reduce the cost of the products cause durability problems. Product variety is limited. Opportunities: The price range of the products is convenient for the people who have lower budgets. The food service provided by the store attracts people. Product design can be overviewed according to changing nations. Threats: There are many furniture companies, which causes competition among them.
STATEMENT OF THE PROBLEMS
The problems faced by IKEA can be examined in three parts; problems affecting consumer, market and cultural problems occur due to different tastes.
The way IKEA provides service to consumers has both negative and positive effects on the buyers. Positive effecting factors are; whether the product affords the desires of the consumer or not, whether the product fits the location it will be used or not and the price range of the products. Negative effecting factors are; the short lifetime of the products, buying goods that are not needed by seeing them in the showrooms, the design of the showrooms force consumers to walk through each section in the market, which can cause them to buy unnecessary stuff. The fact that the products sold are not assembled has both positive and negative effects on consumers.
The strategies market determines have both positive and negative effects. Positive effects are, the way products are packaged enables the market to store more goods at the same time, the effect of showrooms on the consumer, the rules which enables the consumer to test and experience the products, the equipment such as tape measures provided by the market allows customers to check the size of the products, the food service and the playing areas for the children. The negative affecting factors are the usage of low quality materials inside the products to lower the cost causes short lifetime production. The matrix method and the market strategy affect the market both positively and negatively.
Due to culturally different tastes, some negative effects are observed on the market. For example, since the comfort understanding of cultures varies, their expectations from products also change.
SITUATION OF ANALYSIS
The problems which are stated in the statement of the problems section will be analyzed. The situation of the consumers, market and the cultural differences which affects tastes will be examined.
There are positive and negative effects of IKEA’s service strategy on customers. If there are some problems on the product IKEA guarantees changing the goods. For example, IKEA has received twelve reports worldwide of RUND glass mugs that have broken in use. Five of the reports stated that injury had occurred. On receiving reports with glass breakage IKEA began an investigation which revealed variations in glass thickness. As a precautionary...