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    IKEA Invades America

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    Varun Singh
    IKEA, founded in 1943 in Sweden, opened its first US store in Philadelphia in 1985 but struggled initially due to uncomfortable furniture designs. However, IKEA then adjusted products to American tastes, launched an advertising campaign to change perceptions, and became the fastest growing furniture retailer. By 2002, the US was IKEA's third largest market with 14 stores. IKEA planned to add 9 more US stores by 2003 and aim to have 50 stores in America by 2013 through strategies like appealing to more customers, diversifying designs, launching restaurants with IKEA furniture, and focusing on online sales.

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    IKEA Invades America

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    Varun Singh
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    IKEA, founded in 1943 in Sweden, opened its first US store in Philadelphia in 1985 but struggled initially due to uncomfortable furniture designs. However, IKEA then adjusted products to American tastes, launched an advertising campaign to change perceptions, and became the fastest growing furniture retailer. By 2002, the US was IKEA's third largest market with 14 stores. IKEA planned to add 9 more US stores by 2003 and aim to have 50 stores in America by 2013 through strategies like appealing to more customers, diversifying designs, launching restaurants with IKEA furniture, and focusing on online sales.

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    IKEA invades America

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    IKEA invades America

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    IKEA, founded in 1943 in Sweden, opened its first US store in Philadelphia in 1985 but struggled initially due to uncomfortable furniture designs. However, IKEA then adjusted products to American tastes, launched an advertising campaign to change perceptions, and became the fastest growing furniture retailer. By 2002, the US was IKEA's third largest market with 14 stores. IKEA planned to add 9 more US stores by 2003 and aim to have 50 stores in America by 2013 through strategies like appealing to more customers, diversifying designs, launching restaurants with IKEA furniture, and focusing on online sales.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    632 views8 pages

    IKEA Invades America

    Uploaded by

    Varun Singh
    IKEA, founded in 1943 in Sweden, opened its first US store in Philadelphia in 1985 but struggled initially due to uncomfortable furniture designs. However, IKEA then adjusted products to American tastes, launched an advertising campaign to change perceptions, and became the fastest growing furniture retailer. By 2002, the US was IKEA's third largest market with 14 stores. IKEA planned to add 9 more US stores by 2003 and aim to have 50 stores in America by 2013 through strategies like appealing to more customers, diversifying designs, launching restaurants with IKEA furniture, and focusing on online sales.

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    Download as ppt, pdf, or txt
    of 8

    IKEA Invades America

    TEAM NO.-9
    TEAM MEMBERROHAN PATIL(121343) SIDDHARTHA NAGORI(121351) SUPRAV TALUKDAR(121354) SURAJ GUPTA(121355) VARUN SINGH(121358)

    ABOUT IKEA

    Founded in 1943, by Ingvar Kamprad. Named after Kamprads initials and family farm( Elmtaryd) and village ( Agunnaryd). IKEAs vision : Democratic Design: Low price with meaning. First inaugural store was launched in 1958 in Almhult,Sweden. The 45800 sq. feet flagship store was opened at Stockholm in 1965. Positioned as a low-priced furniture store. Shifted from selling furnitures made by other manufacturers to selling its own manufactured furnitures.

    ABOUT IKEA

    Product Strategy:

    Product/Price matrix

    PRICE RANGE

    Scandinavian (sleek wood)

    STYLE Modern Country (minimalist) (neo-traditional)

    Young Swede (bare bones)

    high medium low

    Strong supplier relationship.


    Cost efficiency in engineering and design. Transportation: We dont want to pay to ship air.

    SHOPPING AT IKEA

    Typical floor space : 15000-35000 sq. meters. Store Layout carefully designed with childcare facilities, restaurants, etc. At the entrance, small stationary items are kept along with shopping carts. The stores are self-service.

    Delivery and assembly of furniture was customers responsibility.


    Apart from furniture, other household items are also sold with range of 10000 products. Many products feature bold colours and whimsical names.

    US MARKET SCENARIO BEFORE IKEA ENTERS

    Market consisted of following categories:


    Case goods and upholstered (45% each) Other categories (10% ) .

    Retailer Category

    Low end retailer.

    High end retailer.

    Customer Perception

    Unwillingness to buy new furnitures. Purchased high quality and long life furnitures focussing on comfort.

    US MARKET SCENARIO BEFORE IKEA ENTERS

    Delivery service scenario:


    Sometimes free, sometimes for a fee. Delivery time could run for weeks.

    IKEA INVADES AMERICA !!!!

    First store opened in Philadelphia in 1985 was not a success due to:

    Uncomfortable furnitures. Not at par with American consumer standards.

    Adjusted product lineup to customer taste. Launched advertisement UNBORING campaign to change stereotypical customer perception about their furniture. IKEA changed the perception of its product among consumers mind from cheap to product with quality and aesthetics but at affordable price. Fastest growing furniture retailer. Doubled revenue from $600 million in 1997 to $1.27 billion in 2001. By 2002, US was IKEAs third largest market(11%) with second largest number of stores(14) after Germany(30).

    IKEA INVADES AMERICA !!!!


    In 2003 IKEA plans to add 9 more stores. By 2013, IKEA aims to have 50 stores in America.

    Strategy:

    Should set up its stores where there is a larger number of its target population. Should try to appeal to a larger audience.

    Should diversify from its Scandinavian design and style.


    Launch stand alone restaurants with interior designed with its furniture and where product catalogs are available. This will increase the number of touchpoint and brand visibility.

    Launch an IMC campaign which focuses on the style and fashion statement of its furniture. It will ensure frequent purchases as styles and fashions change.
    Focus on online platform with virtual online stores.

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