Ikea Invades America

IKEA has definitely made great strides since coming to America in 1985. The baptistery study points at numerous a(prenominal) beas where idea has made huge impacts on the Ameri quarter article of piece of piece of furniture retail industry. Looking at possess 1 you nookie see steady call onth in sales, Exhibit 3 shows the coupled States as the third largest buyer of IKEAs goods, Exhibit 4 shows the Unites States as having the second around bite of IKEA outlets in the world and Exhibit 8 shows them as being 14 in sales in America. Looking around at my fri abrogates places there is definitely tons of things bought at IKEA.While all these statistics show a very lucky movement into the United States for IKEA I feel that there could be some obstacles IKEA could encounter in the future. As it said in the case study generally IKEAs harvest-times dont last much than than a couple of old age and that normally dont set out the endurance to survive a move to a unused apartm ent. With how Ameri basiss historically corrupt furniture, convince their spouse as often as their dining manner table, intimately 1. 5 quantifys in a lifetime. (Moon, 2004), this would come along at odds with the type of convergenceion that IKEA digests.The idea that you shake up to assemble the furniture yourself is something that would seem to turn a large percentage of Americans away from acquire an IKEA convergence. I personally nurse found some of the things I nominate bought from IKEA to be very challenging to put together. A nonher aspect of IKEA is their overlook of growth depth it seems that a lack of selection would hurt IKEA in the American market. Outside of these differences in what IKEA has and American tastes there is a can that IKEA has done very well with in America. IKEA seems to have established itself as the disordered impairment leader in the minds of around consumers.As we find ourselves in a time of economic downturn and everybody seems t o be trying to keep on a little here and there that is huge for a retailer. The childc ar aspect of the retail outlets is a huge plus to get families to bugger off shopping and buy from you. If you can drop the kids off to play and you end up getting your shopping done in half the time I would have taken if your kids were with you than is a major factor in where you decide to shop. The restaurant in the broth is great and the menu items they can are unique the setting they laissez passer them in.I can remember my parents reflection lets go to IKEA and get some Swedish meatballs. in kick inition the idea that you can walk away with what you bought that day leaves the consumer with a whiz of satisfaction that next day delivery doesnt achieve. Solutions to some of the problems seem to be easily attainable. When looking at the issue of durability you would maintain that many of their customers dont go to IKEA to buy a product that lasts contemporariess, so conveying to thei r customers that they shouldnt expect to be buying a product that you can hand down to your children would financial aid.The idea that consumers in this generation solve problems by just buying a new product to replace the broken one really helps externally to solve that problem. IKEA could cite an group like geek squad to consumers, for an extra charge, that would bring the product to your home and assemble it could help to attract lazy Americans who dont want to assemble the furniture themselves. Ultimately the consumers that they market to dont need any changes to what IKEA does. IKEA provides the experience of buying what is perceived to be a high quality product for an affordable price.It would seem the IKEA experience is something that pile line up to do and it seems to be a very successful model for IKEA. I wouldnt recommend any changes to what IKEA does. Why would you change something that is working so well? Overall IKEA seems to have done a very good job in creating a s ector where they can carve out a profit. You are always going to have price conscious consumers looking for something that looks nice and is affordable and IKEA can offer people that hands down.Ikea Invades America1. What factors notice for the success of IKEA? Three factors account for IKEAs success in the furniture retailing industry First, their Norse designs are simple but unique. In the past, IKEAs designs were functional at best, ugly at worst (Moon, 2004). The fel let looseship had gradually but advisedly adopted a much distinct design aesthetic (Moon, 2004). Second, IKEA is woo efficient. As back as 1956, IKEA began testing flat packages. IKEA designs products so that they can be packed flat and then, customers can assemble the furniture, thus minify costs.It also creates extra storage space and the capability of shipping more items, turn labor costs are reduced and transport damage are avoided (Moon, 2004). Third, their product strategy provides IKEA with a competi tive advantage. IKEA has a product strategy council that establishes product priorities and a product developer that uses the intercellular substance to set targets for their retail prices, that are usually 30-40% lower than its competitors (Moon, 2004). 2. What do you think of the accompanys product strategy and product score? Do you agree with the matrix approach described in Figure B of the case?What is most important about IKEAs product strategy and product range is their matrix, which is simple enough, yet very useful at creating market opportunities. The matrix also creates a way of accepting or declining a product, manufacturer, or designer, thus cutting costs (Moon, 2004). 3. Despite its success, there are many downsides to shopping at IKEA. What are some of the downsides? IKEAs vision dictation in Figure C of the case describes how the company seeks to build a partnership with its customers. What do you think of the vision statement?Probably the most important downside is the life span of the furniture. When you shop at IKEA, you know that their furniture would not last more than a couple of years (if you are lucky). Another downside is that the customer has to assemble the furniture themselves. IKEA does not offer an forum service as many other furniture stores and this can be troublesome. As for their vision statement, it seems a little too far out. The company wants to create a long lasting relationship with its customers, but many of them forget not come back for more. This is due, as explained above, because the ustomer has to assembly the furniture with the help of instructions that sometimes can be hard to chase for the beginner. The company should implement an assembly team, for those that may need that extra help. 4. IKEA plans to grow in the United States by 50 stores in operation by 2013 which is an indication of how optimistic the company is about the viability of its survey proposition in this country. Do you think IKEA is being o verly optimistic in its increase plans? How would you improve IKEAs value proposition to make it even more attractive to Americans? 0 stores by 2013 do not seem to be an overly optimistic number. By opening more stores, the company will be reaching more customers, will be closer to b jeopardize ones, and will be in the minds of more people. I would also regularize that Americans have a long history of purchasing products that last, so placing more attention to durability can help the company. They can also offer more services, better customer service for their stores, and easier to find merchandise (their transcription may say that a chair is found on theatrical role 4, when in reality, the chair is in another section). 5.To achieve the kind of increment IKEA is hoping for, should the company change its product strategy? If so, in what way (s)? What about its product rangeare there limitations to the matrix approach? Should the company expand its product lineup to include a gr eater number of styles and price points? In what other ways should the company change its product lineup? I believe that their strategy has been working for a while and its core should not be changed. The product matrix does not specifically state what qualifies a product as a high, medium, or low price, there can be percentages applied for the price ranges (Moon, 2004).Subcategories can be added to the matrix. The company can expand its product lineup to include a greater number of styles and price points, thus providing the company with complete reports to help them gain advantage over their competitors. 6. If you had to predict, what do you think IKEAs value proposition and product lineup will look like in 10 years? In ten years, their value proposition can encompass more services to buyers after their purchases. They have to keep with new trends in the industry as well as more products for its customers. 7. whatsoever industry observers have suggested IKEA open a umber of small er, satellite stores crosswise the United States in shopping malls, strip malls, etc. offering a limited range of IKEA products. These IKEA lite stores would give the consumers who do not have access the full-size IKEA stores the opportunity to experience the brand. In addition, consumers who live nest a full-size IKEA store could use these smaller stores to make baby bird purchases such as mugs or dishes as opposed to an entire documentation room. Do you agree with the idea? Why or why not? The idea of opening smaller or satellite stores across the US can help IKEA to reach more customers.Some customers live in areas where the closes IKEA store is miles away, and these smaller stores can be of great convenience to them and more clams for the company. Some items, as the Ticka alarm clock and clothes hangers (Moon, 2004) are items that are used daily by households and that if offered in more places, the revenues for the company should go up. Both parties will benefit from this id ea. 8. Toyota, Nissan, BMW, Honda, and other automobile companies have make manufacturing plants in the United States. IKEA imports all of its furniture from sources outside the United States.Does IKEA have a responsibility to add the manufacturing of furniture in the United States, presumptuous its store expansion takes place? IKEA does not have the responsibility to add manufacturing of furniture here in the United States, but it is an idea that will benefit not only the company and its customers (by having lower prices for production and thus, for the lowest product) but also will generate much needed jobs. 9. passel are used to buying furniture that lasts a long time. Do you think it is ethical for IKEA to sell furniture that doesnt last a long time?What if the customer of IKEA is not aware of the position IKEA takes that furniture is not forever? Should they make the customer aware that their furniture is not intended to last a long time? I do not believe that it is unethica l to sell lower quality products, if the price matches what you are paying for. Most consumers are aware that if they pay low prices, the quality is going to be compromised. IKEA can include on their product instructions a prediction of the life span of it, reducing the risk of being looked as cheap and of bad quality.