Instructor: Christine M. Kukla
MKT 570: Marketing Management
[ February 7, 2012 ]
* IKEA offers a unique value proposition to its customers. It offers a wide range of well designed, functional products at low prices. The design begins with low costs from the outset, striking an ideal balance between function, quality, design, and price. * IKEA introduced the flat package which can be assembled by customers * IKEA has maintained long-term relationships with its suppliers, ensuring the company has access to high-quality materials at reasonable prices. Because of this, IKEA has some of the largest margins in the industry. * IKEA’s vision is to create a better everyday life for many people, putting the concerns for the environment and people at the heart of the business. Weaknesses:
* The need for low cost products could lead to a possible compromise between quality and price. * IKEA is a global company, so product standards may be difficult to maintain. * Furniture needs assembly and not everyone has the tools, knowledge or strength to put the furniture together. The instructions for furniture assembly are just pictures. There are no words to accompany the instructions. Opportunities:
* IKEA can further capitalize on the “green” movement and IKEA’s customer’s desires to have less of an impact on the environment. * IKEA is already reducing their carbon footprint by packing in less material. Threats:
* Competition for IKEA comes from traditional furniture stores as well as stores like Target, Wal-Mart, Sears, and other similar stores that also sell household products and small furniture. * Some stores have already mirrored the flat package, low cost packed furniture model. * Slow down in first time home buyers, which is a core market segment for IKEA, as well as the recession will limit the amount of customers that walk into an IKEA store.
1.) IKEA is already opening...