Ikea Invades America

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Case Study: IKEA Invades America Eunice Hurh University of North Texas Case Study: IKEA Invades America 1. What factors account for the success of IKEA? a. There are three main factors that account for its continual success in the furniture retailing industry: Scandinavian designs, cost efficiency, and product strategy i. Scandinavian heritage is showcased beautifully through IKEA’s simple yet unique designs. In the early years, IKEA’s designs were functional at best, ugly at worst (Moon, 2004). Now, due to a deliberate focus on adapting a more design aesthetic (Moon, 2004), consumers began appreciating IKEA’s furniture for the appeal instead of its functionality. Ingvar Kamprad’s Scandinavian culture is something that cannot be easily copied, as one must be from Scandinavia to fully embrace its aesthetic (Moon, 2004). Moreover, Ingvar was able to create relationships with local manufacturers in the forests close to his Scandinavian home (Moon, 2004). It was quite possible for IKEA’s success story to fall apart if not for the close proximity of those manufacturers in Scandinavia. Also, IKEA’s “Low price with meaning” slogan accelerated consumers to believe these designs were not cheaply made (Moon, 2004). And as Ingvar said, “Scandinavian design is what makes [IKEA] unique,” (Moon, 2004). ii. The most important factor in IKEA’s cost efficiency plan is its flat packaging. In 1956, IKEA began testing flat packaging for tables and legs (Moon, 2004). This obvious idea created more storage space, more items able to be shipped, reduced labor costs, and less reported damages (Moon, 2004). Ultimately, this meant for the consumers a lower priced product with easy transportation (Moon, 2004). The company estimated that its transport volume was six times more with these innovative flatter packages (Moon, 2004). Additionally, with the “Low

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