Ikea Case Study

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I. Factors Contributing to Ikeas Success Swedish company, Ikea, has experienced many triumphs throughout the business history. Founder Ingvar Kamprad created a successful business from a financial gift his father gave him. There are several factors that contribute to Ikea’s success. These factors include their low cost price strategy, the design of their store, and the shopping experience for customers.
Ikea’s low cost low pricing structure.
Ikea’s low cost pricing strategy was a key to their rise to success. It started in 1951 when Ikea abandoned all its other catalog products to focus solely on low priced furniture. In the beginning, Ikea’s furniture was produced by local manufactures. The pivotal point in Ikea’s history came in
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Ikea’s Scandinavia heritage is what makes them standout from competitors. Although Ikea is often imitated competitors can never duplicate the wonders of the Scandinavian company.
Invading the American market was not an easy transition like the companies other stores, which yielded high customer turnouts for grand openings. Americans were not as receiving to what Ikea had to offer in the beginning because they were attached to the old traditional furniture they already possessed. This turned around for the company through various marketing initiatives. Ikea launched a campaign named “Unboring” taunting and joking around with the American market about their attachments to their furniture. This campaign yields success because the American consumer responded to the funny ad in a favorable manner towards Ikea. From the years 1997 to 2001, Ikeas revenues double in the U.S. market form $600 million to $1.27 billion (case Citation). The United States became Ikeas third largest market and its in house restaurants grew to be in the top 15 fast food restaurants in America. II. Ikea’s Product Strategy and Product Range
Ikea developed an interesting product strategy and product range. The company had a good idea to setup a council to effectively manage and oversee products the company carried. The company’s focus to study consumer spending with the competition, gave them insight on how to construct a better

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