Essay about IKEA Case

Submitted By Christian-Powell

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What factors account for the success of IKEA?
Rapid development
Make their own designs
Assemble a piece of furniture from many different parts of tree to make look like good quality and parts like drawers have cheaper wood to cut costs
Pack items flat to save on shipping
In house designers compete by submitting their product designs and best is chosen
The can modify the product continually but the price stays the same while the cost to manufacture goes down
Focus of IKEA is “low priced furniture”
They place a responsibility on the consumer that if they want to save money, they have to help in order for IKEA to help sell them products cheaper
Scandinavian design is unique

Despite its success, there are many downsides to shopping at IKEA. What are some of these downsides?
Assemble yourself
Not long lasting furniture
Have to pick it up at the warehouse and take it home with you, no delivery
More successful in Europe
Designed towards Europeans so when distributed in America it need size modification for its products

What do you think of the company’s product strategy and product range? Do you agree with the matrix approach described in Figure B of the case?
“The Matrix” 30-50% lower

To achieve the kind of growth that IKEA is hoping for in the U.S., should the company change its product strategy? If so, in what way(s)? What about its product range – are there limitations to the matrix approach? Should the company expand its product lineup to include a greater number of styles and price points? Why or why not?

Some industry observers have suggested that IKEA should open a number of smaller, satellite stores across the U.S. (e.g., in the shopping malls, strip malls, etc.) By offering a limited range of IKEA products, these “IKEA Lite” shops would presumably give consumers who do not otherwise have access to a full-size IKEA the opportunity to experience the brand. In addition, consumers who do

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