Ikea Case Study

Introduction of IKEA

IKEA was found in 1943 by a 17-year old Ingvar Kamprad in Sweden. In 1940s to 1950s, it is a period when there was an exploration of furniture design, self assembly, advertising, the use of a catalogue and a showroom started in order to reach broader market. In 1960s to 1970s, IKEA concept starts to develop with its new stores open and hero products are developed. Since 1980, IKEA expands dramatically into new area. It enters USA, Italy, France and the UK market in 1980s and keeps on growing in 1990s. In Malaysia, IKEA has expanded its business in 1996 with the first store opens at Mutiara Damansara. As of 2010, IKEA has more than 38 countries with 280 stores around the world which generating more than 24.7 billion EURO of annual sales.

IKEA offers wide range ready to assemble furniture which includes beds, desks, appliances and home accessories with good design and function at low prices. The idea of IKEA business is to serve as many people as possible by offering a good design and function of wide range of home furniture at a low price. It takes different path by offering home furnishing needs to people around the world with different needs, tastes, aspirations as well as their affordability.

Approach toward winning a competitive advantage

Winning competitive advantage, IKEA seems to be pursuing differentiation of features approach. This is apparent based on the key elements of IKEA’s strategy as follows.

1. IKEA’s ideas to gain sales and market share is by offering a wide range of functionally well-designed home furniture yet at low prices. The idea of IKEA understands the various living situations and customers needs all over the world. Customers can find just about anything they need related to furnishing a home, from pots and pans to kitchenettes, soft toys and living-room furnishing. You name it, IKEA’s got it. In terms of functionality, the products of IKEA are designed to be of multiple uses. Its stylish and attractive...