This website uses cookies to ensure you have the best experience. Learn more

Ikea Invades America Essay

1968 words - 8 pages

IKEA INVADES AMERICA

1. What factors account for the success of IKEA?

IKEA successful growth in the home furnishing retail market can be attributed to many different philosophies. The are several success factors that helped IKEA to succeed in the furniture market. The most important are cost efficiency, product strategy, and Scandinavian designs. One of the factors in the IKEA's achievement in cost efficiency plan is its flat packaging. In 1956 IKEA begins testing flat packages for tables and legs. This obvious initiative created more storage space, more items capable to be shipped, reduced labor costs, and less reported damages. For costumers this meant a lower priced product with ...view middle of the document...

Once product priorities became set up, a product developer used the "matrix" to set the target retail prices. The matrix consisted of three basic price ranges and four basic styles. This matrix set benchmarks of its own price point 30% to 50% lower than those of competitors. Each type of goods had its own matrix and this allow the company to recognize product gaps within the lineup. Also, IKEA encouraged suppliers and designers to compete for the contracts to decrease costs and get a border variety of designs to choose from. This seemingly elementary product strategy implemented by IKEA stores has confirmed to present enormous amounts of revenue due to its high level success.
Finally, IKEA's Scandinavian designs are simple but unique. In the early years their designs were useful at best, ugly at worst. Now, due to a deliberate focus on adapting a more design aesthetic , customers started appreciating IKEA’s furniture for the appeal instead of its functionality. The overall success of the company comes from its strategy to produce attractive yet simplistic designs that are made from inexpensive yet reasonably well-constructed components.

2. What do you think of the company’s product strategy and product range? Do you agree with the matrix approach described in Figure B of the case?

I think IKEA’s current product strategy is unique, when it comes to their products. Since IKEA utilizes a wide range of products, this is another factor that leads to their success. IKEA's product strategy and product range is designed in a way that easy-to-read and avoids any confusion. Within the price ranges and styles, there are sure to be some inconsistencies, but the matrix performs a good job at showing what is lacking as well as market opportunities. The usage of the matrix allows IKEA to research all potentials inside their market, by product type, price, and this can be executed simultaneously. For IKEA this is a very resourceful move on their part due to offering a product mainly in every category at diverse price ranges. A different and most likely the best aspect of the matrix is that it gives IKEA the ability to recognize any weak points in the company’s product lineup. If a weak point is discovered in the matrix, then the chances for the market are identified. One of the advantages of the product strategy are clear and easy to understand - increased cost savings that are converted into lower prices for the customer, while still marketing your brand as a stylish choice for home furnishings - "Low Price with Meaning." Another advantage of the product strategy comes from the understanding that is inbuilt among the customer and the manufacturer creating the costs lower due to the fact that they are simplistic, medium quality, convenience designs where assembly is required without exception. IKEA has established the benchmark price point of 30-50% lower than those of its competitors, the matrix can provide an uncomplicated yes or no to the...

Other Papers Like Ikea Invades America

Hate Crime Laws Essay

2348 words - 10 pages On June 7, 1998, 49-year-old James Byrd Jr. of Texas accepted a ride from three white men, who then beat him severely, urinated on him, chained him by his ankles to the back of their pick-up truck, dragged him for three miles into the countryside, and dumped his corpse in front of an African-American cemetery (Graczyk). A little over a year later, a jury sentenced ring leader John King to death by lethal injection (“Man Executed for Dragging

Rational Emotional Behavior Therapy Case Study Conceptualization And Treatment Plan

2140 words - 9 pages Rational Emotional Behavior Therapy Case Study of Sarah: A Conceptualization and Treatment Plan Rational emotive behavior therapy, REBT, was developed by Albert Ellis and holds the central belief that the events in our lives do not cause our disturbances but that they are instead caused by our view of the events (Murdock, 2009). Murdock (2009) states that “people are seen as responsible for their behavior” (p. 279) but, because they are

Holidays In Albania

1636 words - 7 pages Have you ever thought about having exciting and incredibly cheap vacations? Albania might be the right choice. According to My Travel Guide, Albania is ranked the fourth among ten places worth visiting in Eastern Europe (“Top 10 Eastern European Destinations”). One can encounter three kinds of vacations in this Mediterranean country: winter, summer, and cultural. The ideal places to spend your winter vacations are the Albanian Alps. They are

A Heart Of Darkness

1748 words - 7 pages In this short story, there are frequent significant subject and ideas that make the story, "A Heart of Darkness," by Joseph Conrad, and haunting novel. The main theme is absolute white power over the natives. The theme validates the corruption, and the dependence caused by the white people as they took over the Congo. White men were giving all the power; they had no self-control, and in the end they did not use wisely. The white men became

The Aspects Of Vulnerability Among The Exploited In Medical Research

2287 words - 10 pages Essentially, everyone is in some state of vulnerability. However, some of us are more susceptible to harm due to our vulnerabilities. The susceptible are the individuals with the greatest risk. These individuals risk the loss of their autonomy, and maybe even their lives. Vulnerable populations can be found in every subset of society. However, as previously mentioned, there are some vulnerable populations that are at an even greater risk than

The Hitchhiker’S Guide To The Galaxy

1171 words - 5 pages The Hitchhiker’s Guide to the Galaxy As the human race makes life-changing discoveries, it is made apparent that there is always more to learn as the universe, instead of becoming familiar, is becoming absurd. The Hitchhiker’s Guide to the Galaxy, written by Douglas Adams, as well as the 2005 film adaption, portrays absurdity to be an all-encompassing system in the universe. Through the introduction and attempt to understand lack of reason, the

The Ford Motor Company Wage Increase Of 1914 And The Theory Of Incentives And Efficiency Wages

1252 words - 6 pages ‘It’s not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages’ (Henry Ford, cited in Johnson and Weinstein 2004, p. 2). When the Ford Motor Company announced that it would more than double the wages of its workers in January 1914 to a ‘five-dollar day’ minimum, was this a contradiction to Henry Ford’s statement? If customers are actually the ultimate payers of wages, then more than

Historical Analysis Of The Economical Breakthroughs Of The Industrial Revolution

1396 words - 6 pages A Historical Analysis of the Economical Breakthroughs of the Industrial Revolution During the Industrial Revolution, many elements of society experienced huge breakthroughs that would change the way they functioned forever. Economics were definitely one of them. With many new inventions and many factories appearing, many, many, more resources were being created than ever before. Also, all of the revenue from these resources was being given to

Leadership Portrayed in Monologue from Shakespeare’s Henry V

1214 words - 5 pages Leadership is defined as a socially constructed process and which also affect organizational future outcomes. Leader is someone at high position who have overall duty for an organization, she or he decide what to do and the way how to achieve it. (Carter and Greer, 2013)The role of leader is extremely important for an organization, leader use their own power to influence the followers though many different ways such as motivation in order to

Cuba Civil Rights

1906 words - 8 pages of Soviet Socialist Republics became close allies with the Cubans. Then once this occurred the United States Of America put up an embargo that still lasts to today from “Fact Sheet: Cuba”. Although we have seen many resent reform which help cut back on the human rights violations. Ranging from allowing the rich to buy and sell propriety to starting a business and finally and most recently releasing some of the

US Freight System

1273 words - 6 pages General Environment Each American requires the movement of approximately 40 tons of freight per year across the freight network. This includes everything from shirts to lawn mower to orange juice. • As the U.S. population expands, the U.S. freight system will be called upon to meet the demands of a larger population • Between 2010 and 2035, the system will experience a 22 percent increase in the total amount of tonnage it moves • By 2050, with

Related Essays

Ikea Case Analysis

1816 words - 8 pages Invades America, p. 5). IKEA implemented a strategy that was aligned with their culture by finding low-priced materials and matching products to capabilities. This sometimes meant using an unconventional supplier for a particular product. For example, IKEA used a ski supplier to manufacture tables. Designers also worked several years ahead of production schedule to drive costs down and meet strategic objectives. By ensuring a high, steady volume

Ikea Strategic Planning Essay

3500 words - 14 pages Conquered America, “New York Times Magazine, December 1 2002, Moon, Y.M, 2002, IKEA invades America, Harvard Business School Case, 9-504-094 (Revised in 2004) McCarthy,M (2003, June), IKEA’s ‘Lamp’ ad takes top Cannes prize, USA today, Available: http://www.usatoday.com/money/advertising/2003-06-21canneswinner_x.html Accessed March, 23 2011 Paula M. Miller, 2004, IKEA with Chinese Characteristics, The China Business Review, July-August 2004

Ikea Analysis

5554 words - 23 pages 9-504-094 REV: SEPTEMBER 14, 2004 YOUNGME MOON IKEA Invades America In 2002, the IKEA Group was the world’s top furniture retailer. With sales approaching $12 billion, IKEA operated 154 stores in 22 countries and serviced 286 million customers a year. (See Exhibits 1 through 4.) In the United States, IKEA had 14 stores, with plans to open as many as nine more in 2003. There were a number of factors that distinguished IKEA from other

Freedom And Responsibility Essay

2141 words - 9 pages Global Press Freedom." Voice of America. 17 May 2010. Web. 03 Dec. 2011. . "Unforgettable Change: 1960s: Free Speech Movement & The New American Left | Picture This." Oakland Museum of California. Web. 01 Dec. 2011. . "Who Was Mario?" Mario Savio Memorial Lecture Fund. Web. 25 Nov. 2011. .