IKEA Invades America 
Introduction.
The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in America. From 1997 to 2001, the revenues of IKEA doubled from $600 million to $1.27 billion in five years so the history proofed that it seems possible for IKEA to reach this goal. However, IKEA faced several challenges with the market entrance: American’s mind-set, competition from established furniture retailer and different customer’s preference etc. To address to these challenges, IKEA needs to go for a market leader strategy expanding total market size and increasing its market share considerably to finally achieve the ambitious goal in a fragmented market like in America.
Strategic problem statement:
IKEA’s current niche position and targeting strategies are unable to sustain the growth that they are looking for. The main strategic problem for IKEA is to grow from 14 stores in 2002 to 50 stores within America by 2013 in order to strengthen their market position.
Tactical problem statement:
The main question here – Is their marketing strategy is so good to achieve strengthen their market position?
Identification of issues:
Issue 1. Value added in high-end furniture retailer:
As in IKEA motto: low price, there is no delivery and credit services offered. Whereas a typical American furniture retailer (Wal-Mart excluded) offered free delivery service, on top of personal consultation, interior design, credit (easy payment scheme) and huge selection of products.
Issue 2. Reluctance to change furniture: mind-set of Americans.
Americans typically have the mind-set that furniture should last a lifetime, which is not in-line with IKEA’s value that does not include durability in its products.
Issue 3. The high flow of visitors at one-time leads to many problems resulted from the lack of manpower who can meet this climax.
Issue 4. In order to expand aggressively and open 50 stores by 2013, IKEA needs to target to a larger market
The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in America. From 1997 to 2001, the revenues of IKEA doubled from $600 million to $1.27 billion in five years so the history proofed that it seems possible for IKEA to reach this goal. However, IKEA faced several challenges with the market entrance: American’s mind-set, competition from established furniture retailer and different customer’s preference etc. To address to these challenges, IKEA needs to go for a market leader strategy expanding total market size and increasing its market share considerably to finally achieve the ambitious goal in a fragmented market like in America.
Strategic problem statement:
IKEA’s current niche position and targeting strategies are unable to sustain the growth that they are looking for. The main strategic problem for IKEA is to grow from 14 stores in 2002 to 50 stores within America by 2013 in order to strengthen their market position.
Tactical problem statement:
The main question here – Is their marketing strategy is so good to achieve strengthen their market position?
Identification of issues:
Issue 1. Value added in high-end furniture retailer:
As in IKEA motto: low price, there is no delivery and credit services offered. Whereas a typical American furniture retailer (Wal-Mart excluded) offered free delivery service, on top of personal consultation, interior design, credit (easy payment scheme) and huge selection of products.
Issue 2. Reluctance to change furniture: mind-set of Americans.
Americans typically have the mind-set that furniture should last a lifetime, which is not in-line with IKEA’s value that does not include durability in its products.
Issue 3. The high flow of visitors at one-time leads to many problems resulted from the lack of manpower who can meet this climax.
Issue 4. In order to expand aggressively and open 50 stores by 2013, IKEA needs to target to a larger market