IKEA Builds Smaller Format Stores-Comes Closer to Customers

Case Code: MKTG453 Case Length: 9 Pages Period: 1943-2022 Pub Date: 2023 Teaching Note: Available

Price: Rs.300 Organization : Inter IKEA Systems B.V. Industry :Business & Consumer Services Countries : United States Themes: Marketing Strategy, Consumer Behavior,

Abstract Case Intro 1 Case Intro 2 Excerpts

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?

Issues

The case is structured to achieve the following teaching objectives:

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

Contents

Introduction
Beyond The Blue and Yellow Big Box
Customer Value Proposition
Contentions
The Way Forward
Exhibits

Keywords

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

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