Ikea Case Analysis
IKEA Invades America
1. To meet and exceed its growth goals in the US market, should IKEA start opening small “IKEA Lites” with a limited product selection and an emphasis on in-store computer-ordering kiosks? Why is that?
IKEA does not need to start opening small “IKEA lites” in order to meet and exceed its growth goals in the US market because the exceptionally large “warehouse” style store design with its in-store daycare and restaurant features is its differentiator. IKEA has a large enough market share currently and it’s growth in sales from 1997 to 2001 from $600 million to $1.27 billion suggests that growing from 14 stores to 50 stores in the US from 2001 to 2013 is certainly plausible. Now that Americans are more used to IKEA’s way of running its stores (self-service with IKEA representatives at info desks) and its idea of self-assembly furniture, the novelty of their gigantic stores is almost a reason to go for a “trip to the store” in and of itself. Being in such a big store is an experience and allows for customers to see something they want to get, find it in the warehouse and then buy it and take it home right then and there. In many other smaller stores, customers find the furniture that they want but then have to order it and wait for it to be shipped to their homes. The benefit that you get from a small store is already taken care of by IKEA’s website and catalogue. The value of IKEA’s larger stores creates enough of a competitive advantage that we believe they can meet their growth goals without having to build these smaller stores.
2. IKEA’s corporate slogan is “Low price with meaning.” What are the functional and emotional meanings of the IKEA brand?
IKEA furniture is meant to be basic but functional furniture. Moving beyond that, it is designed with bright colors and fun styles to bring an artistic flare to a space. Even so, it is cheap enough so that it can be replaced and changed over time.
"That old, traditional stuff is
1. To meet and exceed its growth goals in the US market, should IKEA start opening small “IKEA Lites” with a limited product selection and an emphasis on in-store computer-ordering kiosks? Why is that?
IKEA does not need to start opening small “IKEA lites” in order to meet and exceed its growth goals in the US market because the exceptionally large “warehouse” style store design with its in-store daycare and restaurant features is its differentiator. IKEA has a large enough market share currently and it’s growth in sales from 1997 to 2001 from $600 million to $1.27 billion suggests that growing from 14 stores to 50 stores in the US from 2001 to 2013 is certainly plausible. Now that Americans are more used to IKEA’s way of running its stores (self-service with IKEA representatives at info desks) and its idea of self-assembly furniture, the novelty of their gigantic stores is almost a reason to go for a “trip to the store” in and of itself. Being in such a big store is an experience and allows for customers to see something they want to get, find it in the warehouse and then buy it and take it home right then and there. In many other smaller stores, customers find the furniture that they want but then have to order it and wait for it to be shipped to their homes. The benefit that you get from a small store is already taken care of by IKEA’s website and catalogue. The value of IKEA’s larger stores creates enough of a competitive advantage that we believe they can meet their growth goals without having to build these smaller stores.
2. IKEA’s corporate slogan is “Low price with meaning.” What are the functional and emotional meanings of the IKEA brand?
IKEA furniture is meant to be basic but functional furniture. Moving beyond that, it is designed with bright colors and fun styles to bring an artistic flare to a space. Even so, it is cheap enough so that it can be replaced and changed over time.
"That old, traditional stuff is