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IKEA Slowly Expands its US Market Presence

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Morgan Wantuch

on 12 March 2014

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Transcript of IKEA Slowly Expands its US Market Presence

Low Cost Structure
Cost-conscious consumers
Quality Products/Services--Strong customer value
Corporate Culture
Year-round interactive activities
Employee happiness & well-being
DIY Approach
Purchase overall experience vs. physical good/service
Logistical style and placement of items
Increase consumer engagement

Background Information
IKEA Slowly Expands its U.S. Market Presence
Jonathan Freiberg, Ashlin Hastings, Courtney Kellner, Kayla Mastey, Morgan Wantuch
Case Questions 1 & 2
Low Cost Structure
Corporate Culture
Do-It-Yourself Approach
Added Amenities
Brand Image
Strong Focus on Sustainability

Do-It-Yourself Approach
Limited Customization
Limited Promotional Expenditures
Weak Online Support

Early Beginnings
IKEA hits its stride
Present Situation
Controversy ?
What do you think of this commercial?
What changes would you make to show this commercial in the U.S?
The IKEA Concept and Idfskdf
SWOT Analysis
Economic Conditions
Demand for Convenience
Popularity of Stylish, but Sustainable, Products

Changing Consumer Needs/Tastes
Mature Market Preferences
Case Questions 3 & 4
Q3: What strategic alternatives would you suggest IKEA employ to further penetrate the U.S. market?
The IKEA Concept and IKEA Way
The IKEA Concept
The IKEA Way
"Provide functional, well-designed furniture at prices so low that as many people as possible will be able to afford them. Creating a better everyday life for the many people"
Company's Code of Conduct
Togetherness, cost consciousness, respect, and simplicity
Look to hire - desire to learn, motivation, common sense, ability to lead
Q1: 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?
Added Amenities
Child care services
In-store restaurants
Car rack rentals
Assemblage services
Brand Image
Array of products/services
IKEA experience
High variety, high quality, low cost
Strong Focus on Sustainability
Renew, reuse, recycle
Production of eco-friendly products
Q2: What factor is the biggest reason for IKEA's growth and popularity: value or image? Which is more important in the U.S. market? Why?
American perception of "Quality"
Linkage to overall low-cost structure
Q4: Speculate on what will happen at IKEA stores as they are adapted to fit local tastes. Is the company's trade-off of service for low cost sustainable in the long term?
Online Store
Viewing and ordering
Adapt to "fast-paced" and technology driven culture
Change Store Layout
Adapt to the quick shopper
Easier in and out
Create an Affiliation
Additional business under IKEA brand
Higher priced products
Expand target market and increase market share
Printed Catalogs to Social Media
More "appropriate" commercials
Product offerings
Store Layouts
Concept of Warehouse furniture stores
Self assembly
Flat packaging
in-store childcare, play areas
longer store hours
Circle structure and wide aisles
"Work should always be fun for all colleagues. We all only have one life; a third of life is work. Without desire and fun, work becomes hell"
Not as sustainable in the long-term due to American values of quality
First Target Price, then product
WOM Advertising
United States
Image is important
American preferences and Product Quality
Assembled furniture
Full transcript