Ikea Looks to Further Penetrate the U.S. Market
Case Analysis 1
(IKEA Looks to Further
Penetrate the U.S. Market)
1. Given the SWOT analysis presented in the case, what are IKEA’s key competitive advantages? What strategic focus should the company take as it looks to further expand into the U.S. market? * IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring tape, paper, pencils, catalogs, strollers, and shopping bags). Although IKEA is not set up as a traditional furniture store, the company does provide several added amenities. There is no denying that brand image is a key strength for IKEA. IKEA considers the environmental impact of every step in its business processes by making products that are environmentally conscientious and cost-effective. * To further expand into U.S. market, IKEA must address two key issues. The first is the overwhelming individuality of U.S. consumers. Further expansion into the U.S. market will require IKEA to adapt its offerings and stores to local tastes. The second key issue is quality. Although American consumers are increasingly value-driven, they also demand quality products. Many Americans view self-assembled furniture as being lower in quality, and similar to the types of furniture one might buy at Walmart or Target.
2. What factor is the biggest reason for IKEA’s growth and popularity: value or image? What can IKEA do to sustain growth after it loses some cache? * There is no denying that brand image is a key strength for IKEA. Even if they have not been in a store, most people around the globe recognize the blue and yellow logo as a
(IKEA Looks to Further
Penetrate the U.S. Market)
1. Given the SWOT analysis presented in the case, what are IKEA’s key competitive advantages? What strategic focus should the company take as it looks to further expand into the U.S. market? * IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring tape, paper, pencils, catalogs, strollers, and shopping bags). Although IKEA is not set up as a traditional furniture store, the company does provide several added amenities. There is no denying that brand image is a key strength for IKEA. IKEA considers the environmental impact of every step in its business processes by making products that are environmentally conscientious and cost-effective. * To further expand into U.S. market, IKEA must address two key issues. The first is the overwhelming individuality of U.S. consumers. Further expansion into the U.S. market will require IKEA to adapt its offerings and stores to local tastes. The second key issue is quality. Although American consumers are increasingly value-driven, they also demand quality products. Many Americans view self-assembled furniture as being lower in quality, and similar to the types of furniture one might buy at Walmart or Target.
2. What factor is the biggest reason for IKEA’s growth and popularity: value or image? What can IKEA do to sustain growth after it loses some cache? * There is no denying that brand image is a key strength for IKEA. Even if they have not been in a store, most people around the globe recognize the blue and yellow logo as a