Ikea Case Study
IKEA U. S. Penetration IKEA by American standards is a very unique store, and it is known around the world for its stylish, quality, and low-cost furniture and home furnishings. Based in Sweden, IKEA’s stores have a strategy of operational excellence in productions, supply chain operations and marketing. IKEA wants to penetrate the US market but the US market is a different market and IKEA would have to adapt to penetrate such a market. We will examine IKEA’s competitive advantages and look how it should go about penetrating the US market.
We will look at strategic alternatives and we will look at possible outcomes for the penetration of the US market. Competitive advantages are based on one of three strategies, operational excellence, product leadership, and customer intimacy (Ferrell & Hartline, 2011).. IKEA provides furniture which is stylish, functional and inexpensive to customers. IKEA offers services like in-store childe-care, play areas, restaurants, and longer store hours. The unique IKEA experience provides customers pencils, paper, tape measurers, guides catalogs, strollers as well as shopping bags.
This is different than many other furniture stores, the do-it-yourself mentality is a competitive advantage because it offers the customer an experience, and it has the potential to give the customer a feeling of accomplishment. Customers can schedule consultations with professional designers to aid them with redesigning homes and rooms. IKEA offers an environment that is fun, unique and it offers an experience that US consumers are not accustomed to which has huge potential.
Establishing a strategic focus is based on developing an overall concept or model that guides the firm as it weaves various marketing elements together into a coherent strategy (Ferrell & Hartline, 2011). IKEA should have an aggressive strategic focus. IKEA can develop marketing strategies to aggressively take on multiple opportunities. With this aggressive approach, IKEA could reshape the competitive landscape. IKEA can introduce the US market to a whole new approach on picking out furniture and could ignite a DIY mentality among the US market.
IKEA’s low cost structure is the essence for its success. Though Brand image is a key strength. IKEA still focuses on providing inexpensive, functional furniture which are environmentally safe which sustains growth. To further penetrate the US market IKEA should redesign their website. They should develop an online store which appeals to the US market. IKEA should also expand some of their product line to offer different styles and color options.
For some stores in the US, they should also have some onsite assemblers to build the product which would eliminate the DIY inconvenience. The US market likes convenience, and customers may spend a little more for the convenience of having furniture that is assembled for them, which is very popular in the US. If IKEA started adapting to US markets and integrated new stores in the US, there would be some changes. IKEA would probably have some stores that have the DIY approach as well as preassembled furniture and they might offer more customizable pieces.
The US would probably see more advertisements and IKEA would probably spend more on marketing practices that are traditional in the US. The companies trade off of service for low cost is definitely sustainable long term. IKEA can market to college students and young couples who would likely be willing to assemble the furniture because it is inexpensive. ? Reference Ferrell, O. C. , Hartline, Michael. (2011). Marketing Strategy (5ht ed. ) South-Western Learning Cengage. Boston, MA.
