ACA # 1 THIS MY CASE STUDY ABOUT IKEA IN PENETRATING US MARKET

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Case Study on
Submitted by: Marie Josephine A. Salazar
Submitted to: Mr. Gilbert San Pedro

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Case Study on: IKEA
I. Time Context : 2009
(When US drastically suffered from Market Recession)
II. View Point : Marketing Manager
III. Central Problem :
Decrease in growth rate resulting from not satisfying its US target
customer, who has a different demands (design, quality and convenience)
compare to other country where IKEA was the leader in its industry.
In spite of popularity in Europe, IKEA must need to find solution to
penetrate the US market by considering the specific demand from its target
customer.
IV. Objectives :
Must
To increase sales demand by 10 % in a year by satisfying customer in unique
design, quality & accessible products
Want
To be the market leader by sustaining to offer good products at affordable
prices giving customer a better life

3. V. Areas Of Consideration :
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Strengths
Strong Focus on Sustainability
Affordable products
Stylish products
Wide range products
Easy to assemble furniture
One of the world's most popular and iconic brand
Has a unique corporate structure
Strong commitment on companies objective or vision
Tactical in terms of marketing
Additional services or amenities
Chosen as one of the most attractive employers
Socially and environmentally oriented
Long term relationship with suppliers
Weakness
Had a bad impression on TV Ads commercial
DIY is not pleasing other customer
Limited customization
Few available stores
Limited promotional expenditures
Weak online support
Compromising the quality of the product
Current design (Swedish) does not fit to American taste
Opportunities
Increasing number of value-conscious consumers
Increase online sales and internet presence
Economic conditions throughout the world
More consumer demand for convenience

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Standardization for mass production by major manufacturers
Untapped markets in other countries
Threats
Existing Industry competitor offering same product
Continuous changes in customer’s demand
VI. Alternative Courses Of Action :
ACA # 1 Massive advertising campaign to educate customers to embrace
dominant design
Advantage: This will improve IKEA’s brand recognition while promoting
Scandinavian designed furniture
Disadvantage: This will need an enormous amount for advertising
ACA # 2 Product modification (design and quality) launching new stores and
start in developing e-commerce solutions
Advantage: This will get the taste what the target consumer want while making
the product conveniently accessible to them
Disadvantage: Risky, This will need an enormous amount for new product design,
new stores to open
ACA # 3 Status quo, maintaining the existing market strategy
Advantage: This will make IKEA focus on the existing strategy and will not need
any additional amount.
Disadvantage: Likely to get the same growth rate or worsen the existing market
share.

5. VII. Recommendation :
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Though IKEA brand was known by its brand worldwide, US
consumer does not affect by it, they still have their own preference in
choosing home furnishing products. IKEA offers low-cost, Swedish design
products that can only be purchase from IKEA stores unlikely to the taste of
US consumer, which they want for their home furnishings with high quality,
traditionally designed and can be purchase conveniently.
With that, IKEA did not get the favorable value from US market. So
for IKEA to penetrate the US market, they need to put the customer first in
consideration of what product to be offer, to know who is really the target
consumer and how will be the product be accessible to consumer.
Knowing what customer wants will give IKEA a starter point to start
a new approach to get the objective and in the long run will help IKEA
reach its main objective.
In additional, IKEA will start also to have a place in the newest
market place, the internet, wherein the competitor and the target customer
were present. With that, IKEA will also be closer to its target customer and
will be technology competent.
IKEA will also expand its target customer from young, cost-conscious
customer to newlyweds’ couples, American families, for office
use, schools and etc. If this will make a hit, the return from investment will
get in a short period of time. Target marketing, positioning and
demographic segmentation are very appreciated in this case study.

6. VIII. Plan Of Action :
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1.) Will take a survey, this can be thru on-line, thru a written survey, or
an in-house survey,
2.) need to get the demographic status from the local government or any
agency,
3.) After getting the result of the survey, IKEA will now know the
customer wants (design of the product, how they feel about the
quality of the product and how they want to get the product),
4.) Marketing Manager will coordinate with the production; for product
design, Product designer must come up with the good design that
will fit for the target customer taste without omitting the uniqueness
IKEA’s original brand,
5.) For quality assurance, IKEA’s product engineer will give
importance on the materials to be used and will demand from
supplier to provide with high standard raw materials,
6.) For convenience, other than restaurant, IKEA will also offer or try to
tie-up with stores that offer convenient products (necessities) to
make IKEA stores a one-stop-shop just like one of IKEA’s
competitor – WALMART
7.) Due to increasing on-line users the internet-based marketing strategy
is a must for IKEA to go forcedly in e-commerce business, that will
help to attract customer and retain the loyal customer,
8.) IKEA will review where the best place to launch new store that will
be closer to the target customer,
9.) IKEA also to offer minimum charge for delivery and other services
that will give the customer the satisfaction from the product &
services IKEA will offer
10.) IKEA will have a continuous survey from its customer to get their
satisfaction level from product & services they get from IKEA,

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11.) Due to large amount of investment, IKEA must need to regularly
monitor the sales, growth rate, and satisfaction level of the total
business to know if the company will meet its objectives or there
will be a need for a new marketing strategy.