IKEA case analysis

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The Swedish company, IKEA, is currently the largest furniture retailer globally. Due to this, IKEA is prone to many problems and backlash from competitors and consumers. Also, IKEA has reached a point in its lifecycle where it can either continue to grow into maturity, or begin the slow transition of decline. In order for IKEA to prevent this from happening, the company needs to address a few problems. While IKEA’s model works in Europe, their model does not work in the U.S. Also, IKEA needs to utilize its low cost structure to its fullest potential. The final problem which IKEA is facing is their lack of online presence. In order to compete in the 21st century, every company needs to have the ability for consumers to purchase products online and have the item shipped to them. IKEA can successfully combat these problems by altering their strategic and marketing models. This can be done by increasing the company’s online presence, creating a new line of products directed towards the “baby boomers”, reduce the amount of catalogues in circulation, and increasing their brick and mortar locations. The problems which IKEA is facing are not different than what other companies have previously dealt with. This being said, the solutions to the stated problems are not simple. One of the largest problems which IKEA is currently being faced with is their lack of online presence. While customers currently have the ability to design a room on IKEA’s website, they do not have the entire store inventory at the tip of their finger. As stated in the case, IKEA only has about 30% of their inventory available for online purchase. As of 2012, the top reasons for consumers to shop online are to save time and to have more variety1. Current... ... middle of paper ... .... It is also a way which IKEA could phase out the catalogue distribution in U.S. markets. IKEA is a company which takes pride in being a “high quality, low cost” provider. For a company which has this image, needs to understand that there are problems associated with the title. Not all individuals will perceive their products as being high quality, if they are also DIY products. In order for IKEA to combat this, the company needs to restructure its products to fit the consumer’s wants and needs. IKEA also needs to have an understanding that when expanding in the U.S. market they need to have a different approach than in European countries. If IKEA can improve their internet presence, open more brick and mortar stores, and differ its product offerings, then the company will have the chance to be one of the most successful furniture retail outlets in the U.S.

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