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Nova School of Business and Economics

IKEA – Case study

Marketing in a Dynamic World Spring 2013 António Ribeiro nº 1414

8. Some industry observers suggested that IKEA should open smaller, satellite store across the USA, in shopping malls, strip malls, etc. These IKEA Lite shops would give consumers that have no access to a near full-size IKEA the opportunity to experience the brand. What do you think of this idea? Why do you agree or disagree with it? Before deciding whether these IKEA Lite shops are in fact a good choice for both consumers and company, there are several issues we need to take in consideration before taking our final choice. Nowadays if we look at the furniture industry evolution, we can observe several trends consisting on companies augmenting their products at a maximum scale. Their line of thinking resembles to the thought that customers are never fully satisfied and the only way to get to them is offering a set of extras, which will allow to satiate customer’s needs and by exceeding their expectations, gain loyalty. This companies’ strategy occurs simply because when something new appears into the market, more and more companies will enter it, with the single objective of taking profits by doing the exact same thing (copy cat effect). Accordingly, when this industry is growing at lower rates and so reaching a mature phase, augmenting their portfolios seems to be the logic way for companies to differentiate between themselves. IKEA had a different vision for their business and instead of selling a range of products they were in fact selling a experience. By eliminating almost any type of sales assistance or delivering service they redefined the concept of buying furniture and created a all new segment entirely at their disposal. Although IKEA’s business didn’t have some characteristics you easily found in every store of these dimensions, it had characteristics only to be found in a highly augmented product (child care centers and...
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