2. Table of Contents
History of IKEA
Introduction
What Sets IKEA Apart?
Expansion of IKEA
Distribution of IKEA Stores
IKEA in Europe
IKEA in the U.S.
IKEA in China
IKEA in India
Take-Away Lessons for Business
References
3. History of IKEA
Founded by 17 year old, Ingvar Kamprad
IKEA name:
His name: Ingvar Kamprad
Name of his farm: Elmtaryd
County he lived in: Agunnaryd
Began as a one-man effort
Selling fish, vegetables and magazines
1952: Issued first mail order catalogue, which
included furniture
6. IKEACONCEPT
Vision:
"To create a better everyday life for the many people"
Mission:
"To offer a wide range of well designed, functional home
furnishing products at prices so low that as many people
as possible will be able to afford them"
7. 1. Solving the worst part of buying
furniture
2. Unique products
3. Hitting the right demographic
4. Not expensive, but not too cheap
5. Stores are a destination
What Sets IKEA Apart:
8. 1) Solving the Worst Part of Buying
Furniture
Purchases would last 20
years or longer
Relieve stress of big-ticket
purchase
Intended to be used
immediately
Disposed of when wore out
or taste change
Easy to
transport/assemble
9. 2) Unique Products
Attention to detail
Scandinavian design
Extremely unique Swedish
product names:
DUKTIG (good, well-behaved):
line of children's toys
BILLY (masculine Swedish
name): a shelf
KASSETT (cassette): media
storage
10. 3) Hitting the Right Demographic
Appeal to Generation Y and Millennials
because of honesty and transparency
Clean, simple aesthetics
Whimsical names
4) Not Expensive, but not too Cheap
Good value
Cheaper than competitors
(West Elm)
11. 5) Stores are a Destination
E-commerce becomes more popular;
more incentives needed
Atmosphere (cafeteria & child-care)
Maze-layout
No sales associates
Standalone store
16. IKEA in Sweden
Focus on Product Range and
Development
Smaller assortment of
products (6,000 - 7,000)
Outrageous advertising
campaigns
Emphasis on IKEA catalogue
Swedish lifestyle is reflected
in IKEA product range
Stores located outside of city
centers
17. IKEA in the USA
Entered U.S.
market in 1985
Low sales for a
decade
No new stores
between 1993 - 1999
19. 1) Focus on IKEA's Strongest Products
Bedroom and Kitchen
sets: "engine of sales
growth"
Modifications:
Produced to metric
measure
Sofas too shallow
Curtains too short
Cabinetry too small
Thanksgiving
21. 3) Economies of Scale
Maintain competitive positioning
Source locally for stable profit
development
Open a large number of stores for
national marketing
22. IKEA in China
Joint venture formed in 1998
Local needs and adapt it's strategies
12 years to become profitable
23. Difficulties in the Chinese Market
Pricing
IKEA prices low in Europe & USA; higher than
average in China
Built factories to
increase local
sourcing of
materials
Able to cut prices
by 60%
PROBLEM:
ADAPTATION:
24. Difficulties in the Chinese Market
Target Market
PROBLEM:
Western products are seen as aspirational
ADAPTATION:
Targeting young middle-class population
Females make up 65% of customers
Higher incomes
Better educated
More aware of western styles
25. Difficulties in Chinese Market
Marketing Strategy
PROBLEM:
Catalogue distribution
Competitors imitating products
ADAPTATION:
Social media &
microblogging to
target youth
Smaller brochures
26. Difficulties in Chinese Market
Store Location
PROBLEM:
Usual positioned in rural suburbs
ADAPTATION:
Outskirts of cities
Close to rail and metro tracks
27. IKEA's Eco-friendliness
Difficulties in Chinese Market
PROBLEM:
Price sensitive
Suppliers do not have necessary
technologies
ADAPTATION:
Focus on lowering costs
28.
29. INDIA
IKEA IN
IKEA has been present in
India for 28 years
First major single brand
retailer given approval to set
up retail operations in India
Responsible for 20% of all rug
exports
Forbidden by Indian
government to sell products
online
No set date for first retail
store to open (2017?)
30. IKEA IN INDIA
(4 CUSTOMER NEEDS)
1) High value for low prices
2) Exclusive products
3) Western
design inspiration and
ideas
4) Ease of shopping
