Today IKEA is progressing towards being one of the top furniture retailers in the world. In 2002, they served 286 million customers through 154 stores resulting in $12 billion in revenue. Although IKEA has several stores placed around the world, they are not always thought of as the most popular furnishing store in America. All the stores are self-service and are based on a do-it-yourself shopping experience. There are few contacts with customer service representatives within the stores, except for when the customer enters the transaction phase of their buying experience.
* IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring
IKEA is an internationally known home-furnishing retailer, with over 300 stores in 40 countries, that specializes in products
All the products are designed so it would be easy to transport and assemble. Moreover, the company offers the widest product range and positive shopping experience. All of these factors are aligned with what customers want and need and which results in higher sales. Without such extensive customer knowledge and best practices to benefit from that knowledge, IKEA would be unable to outcompete its current competitors. Constantly using innovations to drive costs
The main groups of IKEA's customers are young generation and families who mostly are low to middle class customers and they enjoy, as well as willing to spend a considerable time to explore among various model showrooms. However, the store like IKEA where customers need to walk through all the sections that is set by seller as the standard route, which the way might not be the expected shopping experience for everyone. However, the store like IKEA where customers need to walk through all the sections that is set by seller as the standard route, it might not be the expected shopping experience for everyone. Especially for people who considers as time is money, such as businessman. In addition, the layout of IKEA’s showroom is showing the storage ability of its product and furniture combination and that will be the best choice for the small unit and apartment in some countries but it may not be an appropriate demonstration in other market like US (Harapiak, 2013). In fact, American customers have different tastes and preferences compared to European customers. For instance, American people prefer the bigger dining tables and sofas, which is totally opposite to what IKEA delivers the value to their customers, although it offers relatively low-priced in the
Nevertheless, Ikea challenges the conventional Product Life Cycle through reverse positioning, according to Vedpuriswar (2005); it can strip away product attributes which are traditionally considered important while adding new ones. A key factor in the success of the Swedish furniture retailer Ikea has been reverse positioning. Furniture companies have over the years steadily augmented their offerings. They typically carry a wide product range. Sales consultants pamper customers, presenting them various options including package deals that involve delivery of new furniture and disposing the old.
To take advantage from home furnishing demand in Malaysia, IKEA as the brand-established company wants to introduce their premium quality, unique and varieties type of products range that will attract more consumers. IKEA sold variety of products such furniture, accessories, bathrooms and kitchens as a retail stores. The convenience of the guests must be the top priority when it comes to planning its market development; they offer services and product exactly as per customer needs. Their variety of home furnishing makes guests feel comfortable which adds a touch of elegance and style to customers' homes.
IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international
IKEA’s strategy before the mishaps in America could be characterized as going against the norm charting their own path to success using low priced manufactures to secure lower selling prices aimed to target those who were of older age and of middle class standing. Their new strategy was to target those of a younger demographic, young married couples, college students, and 20-30 something singles. By reemphasizing design, promoting through hip quirky advertisements, and encouraging consumers to do away with their old furniture, IKEA revenues doubled in a four-year period. IKEA today has adapted somewhat of a local customization strategy where their store layouts will resemble that of many local household layouts as proven by their success in China where they failed to expand beforehand. They also keep their prices extremely low in some areas as China by sourcing a large percentage of products in the area of operation.
IKEA Product Differentiation ---- A Wide Product Range The IKEA product range is wide and versatile in several ways. First, it's versatile in function. Because IKRA think customers shouldn't have to run from one small specialty shop to another to furnish their home, IKEA gather plants, living room furnishings, toys, frying pans, whole kitchens - i.e., everything which in a functional way helps to build a home - in one place, at IKEA stores.
IKEA is the largest furniture chain in the world, and in 2011 the Swedish company operated over 270 stores in 25 countries. In 2011 IKEA sales soared to over $35 billion, or over 20% of the global furniture market. Most of its stuffs believed IKEA will massive growth throughout the world in the coming decade because IKEA could provide what customer wanted: good design, and good made contemporary furniture with an affordable price. In one word, IKEA’s global approach focuses on simplicity, attention to detail, cost consciousness, and responsiveness in every aspect of its operations and behavior. (Jones, 2013)
IKEA is considered to be a low cost, high quality producer in the furniture industry, therefore it is important to
IKEA’s single-seat Ektorp armchair retail for 112$ in China, 67 % lower price than one
Ikea's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that as many people as possible can afford to buy them (www.ikea.com)
At the outset, it may be useful to characterise IKEA in terms of the characteristics of demand (also known as the four Vs, see Slack et al. p 20). First, IKEA is clearly a high volume operation – as indeed most international retailers are – which lends to systematising operations but which implies capital intensive processes and therefore cost considerations will be crucial. Second, IKEA offers a large number of products (up to 14000 depending on the country/store) so there is high variety in the