Ikea Iris Ju Young

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Ikea Iris Ju Young

  1. 1. IKEA Invades America Group 1 Bryan Lai Antonia Harper Ju Young Bang Iris Hsiao Victoria Kennedy
  2. 2. Company Background 1943 1947 1953 1956 1958 1955 1965 2002 Basic household goods House furnishings First furniture showroom Began designing low-priced furniture Began testing flat packages Largest furniture display in Scandinavia First flagship store in Stockholm <ul><li>Revenues approached $ 12 billion </li></ul><ul><li>154 stores in 22 countries </li></ul><ul><li>286 customers/ year </li></ul><ul><li>U.S. market: 14 stores </li></ul><ul><li>(+9 in 2003 </li></ul><ul><li>50 by 2013) </li></ul>1985 First American store 1973 First store outside Scandinavia (Switzerland) Ingvar Kamprad
  3. 3. IKEA’s <ul><li>Culture: </li></ul><ul><ul><li>Pragmatic </li></ul></ul><ul><ul><li>Cost-cutting sensibility </li></ul></ul><ul><ul><li>Waste considered a deadly sin </li></ul></ul><ul><li>Differentiation </li></ul><ul><ul><li>Self-service </li></ul></ul><ul><ul><li>Experience </li></ul></ul><ul><ul><li>Unassembled </li></ul></ul><ul><ul><li>Design </li></ul></ul><ul><ul><li>Cheap </li></ul></ul>
  4. 4. Product Strategy Product Priorities Target Retail Price Select A Manufacturer Determine Materials To Be Used Actual Design Process
  5. 5. IKEA’s Product/ Price Matrix STYLE PRICE RANGE Low Mmedium High Young Swede (bare bones) Country (neo-traditional) Modern (minimalist) Scandinavian (sleek wood)
  6. 6. Product Strategy Product Priorities Target Retail Price Select A Manufacturer Determine Materials To Be Used Actual Design Process 30%~50% lower than competitors ’ 1.800 suppliers/ 50+ countries Cost efficiencies Internal competition
  7. 7. <ul><li>“ Low Price With Meaning” </li></ul>
  8. 8. IKEA In America <ul><li>First opening in 1985 </li></ul><ul><li>Difficulties </li></ul><ul><li>- Style and measurements </li></ul><ul><li>- Reluctance to buy furniture </li></ul>
  9. 9. US Market High End Low End General Retailers Specialty
  10. 10. High End Retailers <ul><li>Luxurious store environment </li></ul><ul><li>Various payment options </li></ul><ul><li>Wide collections </li></ul>
  11. 11. Low End Retailers <ul><li>Targeting price-sensitive customers </li></ul><ul><li>Dingy and inconsistent environment </li></ul><ul><li>Limited selections </li></ul>
  12. 12. Needs? ?
  13. 13. Needs? ? Cheap Experience Design Self-service Unassembled
  14. 14. Needs? <ul><li>Low Price </li></ul><ul><li>Dingy and inconsistent environment </li></ul><ul><li>Limited selections </li></ul><ul><li>Luxurious store </li></ul><ul><li>environment </li></ul><ul><li>Various payment </li></ul><ul><li>options </li></ul><ul><li>Wide selections </li></ul>Low end High end GENERAL SPECIALTY
  15. 15. Adjustment <ul><li>Product lineups and merchandising </li></ul><ul><li>&quot;Commitment-free&quot; Ad Campaign </li></ul>
  16. 16. Looking Forward Have 50 stores by 2013 Appeal to a broader public $1.27 billion in 2002 The 3rd largest market USA
  17. 17. Needs TIME LESS NESS TIME LI NESS
  18. 18. Issues <ul><li>Should IKEA change anything (design, philosophy, etc.) to fit into the American market? </li></ul><ul><li>How to convince American consumers that changing furnitures is a lifestyle? </li></ul>
  19. 19. Brand Management A unique, named solution
  20. 20. Thank you! Questions & Comments?

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