IKEA Invades America
 Group 4, Section A
 Ajitesh Jaiswal (08P007)
 Anuj Dharnidharka (08P013)
 Reeti Bhatia (08P039)
...
Overview
 IKEA = Ingvar Kamprad Elmtaryd
Agunnaryd
 Founded in 1943 in south Sweden
 Motto - Affordable solutions for b...
Ikea Concept
 Involve customer in cutting costs
 Make furniture for the masses
 Low price with meaning
 Unassembled pa...
Product Strategy
 Price Matrix used to determine
products/segment
 Establish price before design
 Cost determines mater...
IKEA Stores
 15,000-35000 sq.mts.
 Upon entry shoppers coerced into a
predetermined path
 Customers free to lounge on m...
US Furniture Retailing
 Market consisted of case goods, upholstered furniture,
ready to assemble furniture and casual fur...
IKEA invades US
 Products did not fit American homes
 Adjusted its product lineup and
merchandising
 High profile ads t...
Environment
 Plastic bag for a nickel
 Recycle bins for used batteries,
packaging
 Stoughton store has 7,000
sq.mt. pla...
Criticism
 Not quality furniture
 Low design
 Assembling nightmare
 Danish town names used
for carpet, door mats etc.
...
Future
 Increase the number of stores
 Competition from specialty retailers
 Find a balance between niche and tradition...
THANK YOU
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Ikea Group4 Sec A

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Ikea Group4 Sec A

  1. 1. IKEA Invades America  Group 4, Section A  Ajitesh Jaiswal (08P007)  Anuj Dharnidharka (08P013)  Reeti Bhatia (08P039)  Siddharth Singh (08P048)  Subhratosh Khan (08P050)  Varun Malik (08P053)
  2. 2. Overview  IKEA = Ingvar Kamprad Elmtaryd Agunnaryd  Founded in 1943 in south Sweden  Motto - Affordable solutions for better living  Revenues of $28.8 billion  280 stores across 35 countries  1,20,000 + employees
  3. 3. Ikea Concept  Involve customer in cutting costs  Make furniture for the masses  Low price with meaning  Unassembled parts lead to low shipping costs  External suppliers and designers used
  4. 4. Product Strategy  Price Matrix used to determine products/segment  Establish price before design  Cost determines material used  Different materials for one product to cut costs  Matrix used to identify gaps in company lineup and identify market opportunities
  5. 5. IKEA Stores  15,000-35000 sq.mts.  Upon entry shoppers coerced into a predetermined path  Customers free to lounge on model furniture  Natural light to reduce costs  Food courts located strategically  Play area for kids
  6. 6. US Furniture Retailing  Market consisted of case goods, upholstered furniture, ready to assemble furniture and casual furniture  Market highly fragmented  Top 10 furniture retailers responsible for just 14.2 % market share  Low end retailers aggressively promote on basis of price, environment reflects low price focus  High end stores offer luxurious environments, various payment options, compete on quality and service
  7. 7. IKEA invades US  Products did not fit American homes  Adjusted its product lineup and merchandising  High profile ads to promote commitment-free approach to furniture  Doubled revenues from 1997 to 2001  In house restaurants 15th largest food chain in America
  8. 8. Environment  Plastic bag for a nickel  Recycle bins for used batteries, packaging  Stoughton store has 7,000 sq.mt. plants  All IKEA related dealers have to implement environment friendly methods  Water harvesting  Natural light
  9. 9. Criticism  Not quality furniture  Low design  Assembling nightmare  Danish town names used for carpet, door mats etc.  Created non profit organization to avoid high taxes
  10. 10. Future  Increase the number of stores  Competition from specialty retailers  Find a balance between niche and traditional furniture  Low on customer service  Cut down costs to lower rates further
  11. 11. THANK YOU

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