IKEA
Executive Summary
IKEA’s aim is to open 50 stores in USA by 2013. However, its current product design, market segmentation strategy and target consumers strategy cannot help IKEA achieve that aim. The reasons are that Scandinavian design and style is just a niche, that the market segmentation is narrow and that the target consumers are also just a small portion of the mass furniture buyers.
These 3 aspects cannot help IKEA appeal broader consumers. So we need to reevaluate and redesign the three aspects. We can introduce more popular product and style, increase target market size and consumers size to help IKEA realize its aim.
IKEA’s aim is to open 50 stores in United States by 2014.To do this, IKEA have to solve problems preventing it achieving this aim while maintain its unique strengths to support consistent sales growth.
Introduction of the furniture market
Furniture retailing accounted for $67 billion in sales in 2002 in USA .And the industry can be segmented into 4 groups: case goods, upholstered furniture, bedding, ready-to-assemble furniture and casual furniture. Here, IKEA falls into the ready-to-assemble furniture group, which accounts for 10% of the furniture group. The main players in this market can be divided into 2 groups: the high-end group and the low-end group that IKEA belong into. And IKEA’s main competitors are Wal-Mart and Costco.
Problems and challenge
The first problem is durability that product just last a few years and can be broken easily. However, Americans want the furniture’s duration to be lifelong time. IKEA have already recognized this issue and launched a campaign to educate its customers. Nevertheless, consumer behaviors cannot change easily without a long time periods. So durability has to increase. This issue is related with cost. We need to reevaluate one of the ways IKEA save money, and that is “use lower-quality materials on surfaces that were low stress and less visible to the consumer”
IKEA ‘s
IKEA’s aim is to open 50 stores in USA by 2013. However, its current product design, market segmentation strategy and target consumers strategy cannot help IKEA achieve that aim. The reasons are that Scandinavian design and style is just a niche, that the market segmentation is narrow and that the target consumers are also just a small portion of the mass furniture buyers.
These 3 aspects cannot help IKEA appeal broader consumers. So we need to reevaluate and redesign the three aspects. We can introduce more popular product and style, increase target market size and consumers size to help IKEA realize its aim.
IKEA’s aim is to open 50 stores in United States by 2014.To do this, IKEA have to solve problems preventing it achieving this aim while maintain its unique strengths to support consistent sales growth.
Introduction of the furniture market
Furniture retailing accounted for $67 billion in sales in 2002 in USA .And the industry can be segmented into 4 groups: case goods, upholstered furniture, bedding, ready-to-assemble furniture and casual furniture. Here, IKEA falls into the ready-to-assemble furniture group, which accounts for 10% of the furniture group. The main players in this market can be divided into 2 groups: the high-end group and the low-end group that IKEA belong into. And IKEA’s main competitors are Wal-Mart and Costco.
Problems and challenge
The first problem is durability that product just last a few years and can be broken easily. However, Americans want the furniture’s duration to be lifelong time. IKEA have already recognized this issue and launched a campaign to educate its customers. Nevertheless, consumer behaviors cannot change easily without a long time periods. So durability has to increase. This issue is related with cost. We need to reevaluate one of the ways IKEA save money, and that is “use lower-quality materials on surfaces that were low stress and less visible to the consumer”
IKEA ‘s