Ikea

IKEA

1. What factors account for the success of IKEA?

It is a well-known fact that IKEA is one of the most recognized furniture retailers in the United States as well as many countries in Europe and Asia. And even though there are many factors that distinguish IKEA from many other furniture retailers in a negative way, its overall culture and value creation for the consumer cannot be underestimated. The company’s true success mainly comes from being committed to its corporate slogan – “Low price with meaning” - IKEA offers to its customers tasteful, well-designed furniture at the low prices. And even though there are many downsides to shopping at IKEA, which will be discussed further in this paper, the customers enjoy the company’s unique combination of design, functionality, and affordability. Besides good and functional furniture at low prices, IKEA also offers an immensely appealing shopping experience that starts with the playground where parents can leave their children before they go shopping; after that customers go on to a predetermined path that leads them through beautiful, well-decorated bedrooms, living rooms, kitchens and so on. Such bright and cheerful atmosphere is definitely one of the success factors of the company.

2. What do you think of the company’s product strategy and product range? Do you agree with the matrix approach described in Fig. B?

The company’s product strategy is perfectly aligned with the overall concept of the organization. IKEA works hard in identifying the cheapest and most efficient ways to create the products that the customers will buy. Matrix is a good way to establish product’s target retail price. It helps the company to find the price that will benefit them and their customers. The fact that IKEA sets its prices 30% to 50% lower then those of its rivals shows true dedication to their corporate slogan – “Low Price with Meaning”. Every step of the product strategy that company takes requires a lot of work in...