IKEA's Strategy | International Marketing Case Studies

Details

Mini Case Code : CLIM001
Publication date : 2005
Subject : International Marketing
Industry : Home furnishing
Length : 04 Pages
Price : Rs. 100

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Key words:

IKEA, home furnishing companies, self-assembled furniture, 'contemporary Scandinavian style' furniture, price conscious families, 'flat packaging mechanism', standardized products, economies of scale, optimum stock position, global distribution system

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

Abstract:

The caselet looks at how IKEA, a small Swedish company, became a hugely popular and successful home furnishing company all over the world. It discusses the innovative strategies that IKEA adopted to offer quality products at affordable prices. Further, it describes how the company experienced a setback in the US market, how it adapted itself to the new situation and ultimately captured the market.

Issues:

» How IKEA managed to offer quality home furnishing products at affordable prices worldwide
» How the company tackled the problems it faced in the US market

Introduction

The IKEA Group (IKEA) is one of the most successful home furnishing companies in the world. IKEA, which had its origin in the small village of Agunnaryd, Sweden, was founded by Ingvard Kamprad in 1943...

Questions for Discussion:

1. While entering the US market, IKEA modified its existing range of products and came up with Americanized furnishings. Do you think IKEA had done the right thing by moving away from its philosophy of producing standardized products?

2. How was IKEA able to produce goods at a very low price?

IKEA's Strategy*