Case Analysis IKEA

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Case Analysis IKEA
1
Given the SWOT analysis presented in the case, what are IKEA’s key competitive
advantages? What strategic focus should the company take as it looks to further expand
into the U.S. market?
Some of the competitive advantages that IKEA have are:
1. low cost structure _
 effective to price sensitive customers, customers who are willing to send a low
amount of price will use IKEA.
 goes together with its business model “The IKEA Concept: Provide functional, well-
designed furniture at prices so low that as many people as possible will be able to
afford them. Creating a better everyday life for the many people.”
 Attracts customers who likes the business operating process.
 Easily manageable, and maintain its profit.
2. Cooperate culture_
 The company follows the code of conduct known as “The IKEA way”.
 The company values togetherness, cost consciousness, respect and simplicity.
 The company supports employees with a happy environment to hard working and
motivated workers.
3. Do it yourself approach
 Maintain low-cost.
 Supplies customers with all possible materials needed to complete their shopping
when they enter the store. (measuring tape, paper, and pencils).
4. Added amenities

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 Rents car racks that customers can use to get bulky items to their homes.
 Childcare services and restaurants are also provided.
 Can schedule consultations with professional designers.
5. Bran Image
 Recognized the company logo as Trendy, modern and fashionable furniture.
 High-quality, low cost focus
 The company offers home furnishings and appliances.
 Good price and environmentally friendly products.
6. Strong focus on amenities
 Environmentally conscientious and cost-effective products
 Use the process of renew, reuse and recycle
 Follows environmental responsibilities.
These are some major competitive advantageous of IKEA.
As its mission to expand the market in the U.S., the company should use diversification to enter
into the market. As the United States is a country with people from all over the world, the
company should study the needs and wants of different types of people living in the U.S. and
invent appliances base on the research. For example, the sale of chop-sticks in states with high
numbers of Asians.
2.
What factor is the biggest reason for IKEA’s growth and popularity: value or image?
Which is more important in the U.S. market? Why?
With all the competitive advantages that the company has, the company cares more about its
value. IKEA offers a wide range of creative, designed, functional products at a low price. Many
customers also appreciate the feeling of accomplishment that comes from doing things for
themselves. Environmentally friendly people also favor IKEA because of the use of renewable
materials and raw material that follows the 3 Rs (reduce, reduce, and recycle).

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Base on the reading, the United States prefers the product’s image overvalue. The price drifts
many people. They do not follow the saying, “Never judge a book by its cover: They regard low
priced products like stocks that are poor in quality. Many American consumers prefer items with
products with selections of styles, accents, and colors. Busy Americans prefer products that are
ready to use than assembling everything at home. The majority of Americans also watch
television and use the internet during their lecture time. Only the Products that are communicated
well on the internet or media platforms reach the U.S audiences.
3.
What strategic alternatives (propose at least 2) would you suggest IKEA employ to further
penetrate the U.S. market?
The company should sponsor in some television shows, cooking shows and others. e.g. Master
Chef. This will make the audiences aware of the quality. Although the price is cheap, celebrities
and mentors use it, meaning the product is high in quality. This will also incase customer
awareness throughout the U.S.
The company should also develop further social media platforms that is more accessible to
customers. The websites should also have a link that can direct customers to purchase items
online.
Include Set-Up fees for busy customers. Customers who wants an assembled product have to pay
extra charges for the assembling fees.
References:
Ferrell, O. C.. Marketing Strategy, Loose-Leaf Version (p. 487-494). South-Western College
Pub. Kindle Edition.
Abner, B. (2015, Feb 12). The Business Journal. Retrieved from 4 considerations before taking
your business international: https://www.bizjournals.com/bizjournals/how-to/growth-
strategies/2015/02/considerations-for-taking-your-business-global.html