Download - Ikea Group4 Sec A
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IKEA Invades America
Group 4, Section A Ajitesh Jaiswal (08P007)
Anuj Dharnidharka (08P013) Reeti Bhatia (08P039)
Siddharth Singh (08P048) Subhratosh Khan (08P050)
Varun Malik (08P053)
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Overview
IKEA = Ingvar Kamprad Elmtaryd Agunnaryd
Founded in 1943 in south Sweden Motto - Affordable solutions for
better living
Revenues of $28.8 billion 280 stores across 35 countries 1,20,000 + employees
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Ikea Concept
Involve customer in cutting costs Make furniture for the masses Low price with meaning Unassembled parts lead to low shipping
costs External suppliers and designers used
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Product Strategy
Price Matrix used to determine products/segment
Establish price before design Cost determines material used Different materials for one product to cut
costs Matrix used to identify gaps in company
lineup and identify market opportunities
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IKEA Stores
15,000-35000 sq.mts. Upon entry shoppers coerced into a
predetermined path Customers free to lounge on model
furniture Natural light to reduce costs Food courts located strategically Play area for kids
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US Furniture Retailing
Market consisted of case goods, upholstered furniture, ready to assemble furniture and casual furniture
Market highly fragmented Top 10 furniture retailers responsible for just 14.2
% market share Low end retailers aggressively promote on basis
of price, environment reflects low price focus High end stores offer luxurious environments,
various payment options, compete on quality and service
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IKEA invades US
Products did not fit American homes Adjusted its product lineup and
merchandising High profile ads to promote
commitment-free approach to furniture Doubled revenues from 1997 to 2001 In house restaurants 15th largest food
chain in America
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Environment
Plastic bag for a nickel Recycle bins for used
batteries, packaging Stoughton store has 7,000
sq.mt. plants All IKEA related dealers have
to implement environment friendly methods
Water harvesting Natural light
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Criticism
Not quality furniture Low design Assembling nightmare Danish town names
used for carpet, door mats etc.
Created non profit organization to avoid high taxes
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Future
Increase the number of stores Competition from specialty retailers Find a balance between niche and
traditional furniture Low on customer service Cut down costs to lower rates further
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THANK YOU