Case Summary - Ikea

In: Business and Management

Submitted By sudeepsodani
Words 383
Pages 2
Situation Analysis
 IKEA vision “To create a better everyday life for the many people” truly reflects corporate philosophy of this value-driven company with a passion for life at home. Started by 1st generation entrepreneur Ingvar Kamprad , In 2002 IKEA was world’s top furniture retailer with 286 million customer, $12 Billion sales and 154 stores in 22 countries. Even though
IKEA was founded in 1943 , the self service store journey started in 1965 and by 2002 IKEA became the world’s most prominent retailer. IKEA core culture of cost cutting sensitivity, reduction of wastage has remained consistent over the years which has been exhibited over the years through company’s products, packaging, processes and people.
 Alignment of key consumer trends, low production cost, global sourcing, Scandinavian heritage is important for sustainable competitive advantage of the company.
 IKEA’s followed a well defined product strategy which was based on identifying consumer trends and then building products across these trends. The company followed a matrix style approach which consisted of pricing and style . This matrix was different for each products.
This matrix helped identified the products retail price . The company worked with 1800 suppliers across 50 countries. The company’s different units and entire operations focused on Quality products at low prices.
Key Issues
 Changes in consumer taste and preference -Over the years IKEA refined its product design, retail approach to suit its consumers.
 Globalization vs. Localization – In order to remain competitive and achieve market share in newer geography IKEA needs to understand the local market and change marketing mix according to local consumer lifestyle & preference.
 The furniture market was widely divided between low end, high end , single brand and multiple brand retailers with increasing…...

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