IKEA CASE STUDY
IKEA
Individual Case Analysis
Introduction
IKEA, one of the world’s top furniture retailers was officially founded in 1943 when 17 year old Ingvar Kamprad started a local catalog company using some money his father gave him (Moon, 2004, p.1, para.1). The company started selling furniture in 1947 and over the years has grown to establish a global presence to include the United States (U.S). Success in the U.S. didn’t come immediately for IKEA when it opened in first store in Philadelphia, PA in 1985. Applying market research the company adjusted its product lines and selections and advertising strategy to be one of the top furniture retailers in the U.S. (Moon, 2004, p. 7, para.6). Things which distinguish IKEA from its competitors include: the concept of self-service in which customers select their products and, take them home, and assemble own their own; playrooms for children, and Swedish cafes (Moon, 2004, p.1, para 1.). IKEA’s plans for U.S. expansion from the early 2000s through 2013 require the company to find ways to appeal to a broader market.
Problem
With IKEA’s focus on cost efficiency, it seems they may be putting their longevity in the furniture business in jeopardy. Although cost-efficiency is a part of the company’s marketing strategy and can be attributed to some of its success, if IKEA is seen as a company with low costs, self-service, and lack of overall quality, this could jeopardize their brand in the long-run. It is common for IKEA to redesign products multiple times for cost-efficiency purposes or “to maximize the number of products that could be squeezed onto a shipping pallet”, even after it ends up in the stores (Moon, 2004, p.4, para. 5.). This has the potential of creating more of a burden on the consumer who has to assemble the product, according to the article. With this approach, it seems the company is focused more on cost-efficiency rather than what is best for
Individual Case Analysis
Introduction
IKEA, one of the world’s top furniture retailers was officially founded in 1943 when 17 year old Ingvar Kamprad started a local catalog company using some money his father gave him (Moon, 2004, p.1, para.1). The company started selling furniture in 1947 and over the years has grown to establish a global presence to include the United States (U.S). Success in the U.S. didn’t come immediately for IKEA when it opened in first store in Philadelphia, PA in 1985. Applying market research the company adjusted its product lines and selections and advertising strategy to be one of the top furniture retailers in the U.S. (Moon, 2004, p. 7, para.6). Things which distinguish IKEA from its competitors include: the concept of self-service in which customers select their products and, take them home, and assemble own their own; playrooms for children, and Swedish cafes (Moon, 2004, p.1, para 1.). IKEA’s plans for U.S. expansion from the early 2000s through 2013 require the company to find ways to appeal to a broader market.
Problem
With IKEA’s focus on cost efficiency, it seems they may be putting their longevity in the furniture business in jeopardy. Although cost-efficiency is a part of the company’s marketing strategy and can be attributed to some of its success, if IKEA is seen as a company with low costs, self-service, and lack of overall quality, this could jeopardize their brand in the long-run. It is common for IKEA to redesign products multiple times for cost-efficiency purposes or “to maximize the number of products that could be squeezed onto a shipping pallet”, even after it ends up in the stores (Moon, 2004, p.4, para. 5.). This has the potential of creating more of a burden on the consumer who has to assemble the product, according to the article. With this approach, it seems the company is focused more on cost-efficiency rather than what is best for
References: (Examples of Correct APA Format) Moon, Youngme. (2004, September 14). IKEA Invades America. : Boston, MA: Harvard Business School Publishing. Donnelly, J and Peter, J. (2013) A Preface to Marketing Management (Thirteenth Edition). New York, NY: McGraw-Hill.