Ikea Case Study

IKEA’S Global Strategy: Furnishing the World

IKEA is a privately-owned international furniture manufacturer known for its unique style and low prices. The company’s mission is to create a better everyday life for its consumers by offering a great selection of well-designed, easy to assemble home furniture at low affordable prices. Since IKEA has selected this “affordable and unique” marketing strategy, the company has been very successful in its expansion throughout the world. However, expansion has not always been successful in the United States. In fact, cultural differences and underestimating the preferences of American consumers due to a lack of market research have made expansions in the US very difficult.

The goal of a company’s business strategy is to create and sustain competitive advantages. IKEA experiences both firm-specific and country specific advantages to help maintain their competitive leads. Since its establishment in 1943, IKEA has created many firm-specific advantages including standardizing the process of offering disassembled furniture to consumers allowing them to assemble a piece of furniture at the comfort of their own home. It is also relatively less costly for the consumer compared to ready-to-use furniture. Not only do ready-to-assemble kits create ease for consumers, it also helps pile products on shelves to maintain larger inventories. IKEA’s store layout is also a firm-specific advantage where sales clerks focus more on in-store displays and fast-moving lines rather than loading and unloading large furniture.

IKEA also experiences country-specific advantages including its location in Sweden which has made it possible for the company to expand throughout Europe. This has allowed IKEA to send experienced employees to different store locations to hire and train sales employees, organize the store layout and carry out the IKEA philosophy and standard practices along with them. IKEA has also used their heritage to their advantage by...