Ikea Essay

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IKEA invades America case analysis * What factors account for the success of IKEA? IKEA was one of the first companies which came up with flat packaging process by which the consumers were given the product in parts which could be later assembled by them. This resulted in more furniture transported in a single vehicle thereby resulting in larger price reduction. Waste was considered a sin in IKEA which also helped in maintain the low price furniture strategy. The consumers were allowed to touch and feel the products before they made the decision to buy. This generated a sense of trust in consumer’s mind. A customer friendly ambience was also created by providing house like models in the stores for displaying the furniture. Restaurants and child care centers were also made available. IKEA also designed tasteful furniture products based on consumers’ feedback and buying behavior IKEA and thus was able to keep up with the competition and expectation. All the employees of IKEA were treated equally and they were addressed only by their first name regardless of their superiority or position. These were the factors that would account for the success of IKEA. * 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? Though IKEA initially started with a variety of products, by 1951 it started concentrating only on furniture business. The product range consisted of various types of furniture from sofas till dining sets. The strategy was designed such a way that it is easily understood. IKEA followed a matrix approach for the low price product strategy. This matrix model is similar to perceptual mapping based on price and location. This matrix differs for each product. This approach resulted in a price reduction of 30 to 50% and also helped in keeping track of the

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