Customer and Ikea
CASE 1 : IKEA : FURNISHING THE WORLD
SUMMARY
IKEA is very well known as the world’s largest home furnishing retail chain which was founded in Sweden back in 1943. Originally started as a mail order company, now IKEA has expanded its operation to more than 32 countries having more than 175 outlets. IKEA operates large warehouse showrooms in 16 countries and operates smaller stores in another 9 countries. Germany is IKEA’s largest market followed by the U.S.
IKEA’s mission is to “offer a wide variety of home furnishing of good designs and function at prices so low that the majority of people can afford to buy them. IKEA’s target market is the young, highly educated, liberal in their cultural values, white collar workers and not especially concerned with status symbol. IKEA products have a universally accepted assortment around the world.
IKEA’s strategy is based on cost leadership where most of their manufacturing activities are outsourced to low-labour countries and they follow a high volume production of standardized items which provide an economy of scale. But IKEA concentrates in the design of their product where the designers work to build savings-generating features in the production and product itself.
IKEA encourages its customers to be “prosumers” where most of its product will be self-delivered and self-assembled by the customers But they do provide the delivery and assembly services at an extra cost which IKEA usually hire the local companies to provide those services. IKEA tries to provide a wholesome experience at its stores with the availability of additional services such as babysitting areas and cafeterias. IKEA’s management believe that the ‘designer-to-user’ relationship provides them with an adaptive fit.
IKEA offers prices that are 30 to 50 percent lower than fully assembled competing products. This is a result of large quantity purchasing, lower-cost logistics, store location in suburban areas and the do it yourself approach to
SUMMARY
IKEA is very well known as the world’s largest home furnishing retail chain which was founded in Sweden back in 1943. Originally started as a mail order company, now IKEA has expanded its operation to more than 32 countries having more than 175 outlets. IKEA operates large warehouse showrooms in 16 countries and operates smaller stores in another 9 countries. Germany is IKEA’s largest market followed by the U.S.
IKEA’s mission is to “offer a wide variety of home furnishing of good designs and function at prices so low that the majority of people can afford to buy them. IKEA’s target market is the young, highly educated, liberal in their cultural values, white collar workers and not especially concerned with status symbol. IKEA products have a universally accepted assortment around the world.
IKEA’s strategy is based on cost leadership where most of their manufacturing activities are outsourced to low-labour countries and they follow a high volume production of standardized items which provide an economy of scale. But IKEA concentrates in the design of their product where the designers work to build savings-generating features in the production and product itself.
IKEA encourages its customers to be “prosumers” where most of its product will be self-delivered and self-assembled by the customers But they do provide the delivery and assembly services at an extra cost which IKEA usually hire the local companies to provide those services. IKEA tries to provide a wholesome experience at its stores with the availability of additional services such as babysitting areas and cafeterias. IKEA’s management believe that the ‘designer-to-user’ relationship provides them with an adaptive fit.
IKEA offers prices that are 30 to 50 percent lower than fully assembled competing products. This is a result of large quantity purchasing, lower-cost logistics, store location in suburban areas and the do it yourself approach to