Abstract

This case is about the strategy adopted by Inter IKEA Systems B.V. (IKEA) of opening small stores (Planning Studios and Touch Points) within city limits in place of large big format stores on the city outskirts. IKEA was also implementing newer technologies like Augmented Reality (AR app) and focusing more on online sales with home delivery to cater to the change in the millennial preference for ease of commutability and minimalistic furniture. The change in strategy was implemented as more millennials were settling down in the cities and were looking for multi-utility furniture suitable for smaller living spaces. The market conditions and trends were more toward online sales, use of new technologies, and smaller stores within the city centers. IKEA was focusing more on online sales with plans to tie up with Amazon and Alibaba. Will its new strategy bring results? Will it be the end of the large blue and yellow big box?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the factors that influence strategic marketing decision making.
• Understand the concept of customer value proposition
• Analyze the factors that affect consumer behavior

Keywords

Marketing strategy; consumer behavior; strategic marketing decision making; customer value proposition; PEST framework;