The “IKEA Effect”: When Labor Leads to Love Michael I. Norton Daniel Mochon Dan Ariely Working Paper 11-091 Copyright © 2011 by Michael I. Norton‚ Daniel Mochon‚ and Dan Ariely Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. IKEA Effect - 1 - The “IKEA Effect”: When Labor Leads to Love MICHAEL I
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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
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two companies that have been chosen are IKEA and Markor International Furniture Company. IKEA is a company that started out small by a five year old boy with an entrepreneurial spirit selling pencils and match sticks to neighbors. Because of his drive and determination to help out his family‚ the IKEA brand started in 1943 and is a global giant that has stores in forty-one countries‚ with twelve stores in various neighborhoods of China. The vision of IKEA is to create a better daily life for the
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Teresa Mcewen‚ who works for IKEA Distribution services‚ in Spanaway‚ WA. IKEA is an acronym for Ingvar Kamprad (the founder’s name) Elmtaryd Almhult (the parish/town he grew up in). She is in charge of receiving and planning all of the shipments that are imported to the facility‚ from all over the world. Her phone number is: 253-847-9532‚ Ext 2119. Her email address is: Teresa.mcewen@ikea.com‚ and the companies main website is www.IKEA.com. Teresa told me that IKEA has been around since 1943‚ in
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ESC Rennes school of business Supply chain management of IKEA IKEA Table of content Executive summary 2 IKEA supply chain and background 2‚ 3 Strategy and market 4 Process structure in terms
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Founded in 1943 by Ingvar Kamprad‚ IKEA generated the sales of 23.1 billion Euros in 2010 through its operations in more than 38 different countries with 27 distribution centres. The IKEA Group has 280 stores in 26 countries and the remaining of the stores are run by franchisees (Berger‚ 2011). The business concept of IKEA involves selling high volume of mostly furniture products in low prices. Moreover‚ “with an aim of lowering prices across its entire offering by an average of 2% to 3% each year
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Introduction Ingvar Kamprad‚ Swedish born citizen and founder and former CEO of Ingvar Kamprad Elmtaryd and Agunnaryd or better known as IKEA. Kamprad created a one of a kind furniture company that has become the largest furniture store in the world. The uniqueness is because they company specializes in everything being able to be broken down and shipped‚ “from furniture to the now famous mobile kitchens- could be packed in flat‚ stackable boxes (Nelson and Quick‚ 2011-438)”. His way of running
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effectively. IKEA mostly based on Scandinavian design and quality. IKEA target young low to middle class consumers with its competitive advantage such as low cost. When expanding to the United States market‚ IKEA ran into a few problems by using this formula because of the different tastes in furniture‚ cultural change‚ and more competition. Therefore‚ IKEA had to adopt some activities to fit American consumer behavior. For example‚ as American consumers do not enjoy the long queue‚ IKEA offers delivery
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identified that IKEA has been usingVERTICAL INTEGRATION to the Global furniture industry. Managers use corporate levelstrategy in VERTICAL INTEGRATION to identify which industries their company shouldcompete in to maximize its long run profitability. There are two types of vertical integration:1. Forward vertical integration 2. Backward vertical integration. So far we found that IKEA using backward vertical integration to expand their business and to make profit. Here are some benefits of IKEA to have vertical
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to Dr Li-Qun Wei‚ Department of Management‚ Hong Kong Baptist University‚ Kowloon Tong‚ KL‚ Hong Kong‚ E-mail: weiliqun@hkbu. edu.hk. IKEA in China: Facing Dilemmas in an Emerging Economy In mid-2003‚ the president of IKEA China‚ Ian Duffy‚ and some executives were discussing the market strategies of IKEA China in their Beijing office. After a review of IKEA China’s market development‚ the executives brainstormed about possible solutions for the difficulties experienced in the Chinese market. In
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