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Transcript of IKEA
mat. 643761 IKEA INVADES AMERICA FACTORS OF SUCCESS PRODUCT STRATEGY-PRODUCT RANGE COST LEADERSHIP ( "Low Price with meaning")
PRODUCT STRATEGY (innovative design, wide range, packed flat, unassembled)
SELF-SERVICE STORES with playrooms for children and Swedish Cafés.
cornerstone of the company based on customer trends and needs.
Product positioning: people who can't spend huge amount of money.
Product/Price matrix: to identify gaps in company's product lineup PRODUCT RANGE A wide range of household products and home accessories both in terms of function and style. These practical, affordable and easy to use products characterize the key factor of the product strategy,which in turns leads to the success of the company as a whole. This doesn't fit with the US market:
highly fragmented, characterized by strong competitors such as Wal-Mart, Costco, Office Deport.
Americans notorious for their reluctance to buy new furniture
Ikea furniture too small to fit the American lifestyle.
limited product and style selection DOWNSIDES TO SHOPPING AT IKEA too big showrooms: confusion, nervousness and inhibition to purchases. too many products: buying choice difficult to make. consumers may be not able to assemble furniture resulting in a waste of money and time short lifetime products lack of post purchase service GROWTH IN THE US MARKET SMALL STORES ACROSS US showrooms far from the city center. A smaller store could allow the company to reach a broader public, especially for common household products but would be in contradiction with IKEA basic concept of offering a wide range of products. Founded in 1943 by I. Kamprad, IKEA Group was the world's top furniture retailer in 2002. To achieve the growth in the US market IKEA should not make drastic changes to its product strategy so as not to lose coherence. Product strategy should be flexible to the local market ,i.e., adapted to US market through changes in product range and store lay out that attract local preferences, while still maintaining the Scandinavian design. DECREASE IN BRAND EXPERIENCE The big stores dimensions are chosen specifically to create emotionally-based partnership with the customer who can experience the brand in each phase of shopping at IKEA, from parking to delivery and assemblage.