Ikea Invades America Essay

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Rizka Ruth Pratiwi Johnson & Wales University IKEA INVADES AMERICA 1. What factors account for the success of IKEA? The factors for IKEA’s success can be classified into two broad categories, product strategy and low price with meaning. IKEA always focuses on seeking to balance cost-effective labor with the company’s product quality standards. To save money on labor and production, IKEA constantly is on the lookout for opportunities to build supplier relationships in developing countries. IKEA also circulate a description of the proposed product’s specifications and target cost to its supplier and encourage them to compete for the production package. Moreover, IKEA made all furniture to ship disassembled, and all of the products were transported flat. The flat packaging not only makes it easier for customers to transport furniture home, it also saves the company on shipping. The company’s corporate slogan, “Low price with meaning,” captures their commitment to offering tasteful, cleverly designed products, but do not make the customers feel cheap. The IKEA shopping process has also been referred to as immensely appealing by customers. Upon entry shoppers are gently guided into a predetermined path through cheerfully decorated model bedrooms, kitchens, living rooms, and bathrooms. The atmosphere is always bright and inviting and IKEA also provides childcare centers and restaurants. All of these amenities allow the customer to feel more comfortable and contribute to the success of IKEA. 2. 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? Why or why not? In my opinion, the current product strategy was being used by IKEA to evaluate its product lineup. Thus, this strategy will lead the success of IKEA’s wide product range. Moreover, IKEA uses the Product/Price

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