IKEA Invades America Case Solution

Case ID: 504094
Solution ID: 14686

Words: 1891

Price: $45

Case Solution

In 2002, the IKEA Group was the world's leading furniture vendor, with presence in154 stores globally. In the United States, IKEA directed 14 stores. Though all the store operated on the basis of self-service needs, all had been largely famous. The company's aim is to operate 50 stores in the USA by 3013. Explores a number of options for overlooking the growth plan.

Excel Calculations

Questions Covered

1. What factors account for the success at IKEA?

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

3. Despite its success, there are many downsides to shopping at IKEA. What are some of these downsides? IKEA‟s Vision Statement (in figure C of the case) describes how the company seeks to build a “partnership” with its customer. What do you think of this vision statement?

4. The fact that IKEA hopes to have fifty stores in operation in the United States by 2013 is an indication of how optimistic the company is about the viability of its value proposition in this country. Do you think IKEA is being overly optimistic in its growth plans? How would you improve IKEA‟s value proposition to make it even more attractive to American consumers? 

5. To achieve the kind of growth that IKEA is hoping for, should the company change its product strategy? If so, in what way(s)? What about its product range – are there limitations to the matrix approach? Should the company expand its product lineup to include a greater number of styles and price points? In what other ways should the company consider changing its product lineup? 

6. If you had to predict, what do you think IKEA‟s value proposition and product lineup will look like in ten years? 

7. Some industry observers have suggested that IKEA should open a number of smaller, satellite stores across the United States (e.g. in shopping malls, etc.). By offering a limited range of IKEA products, these “IKEA Lite” shops would presumably give consumers who do not otherwise have access to a full-size IKEA the opportunity to experience the brand. In addition, consumers who do live near a full-size IKEA would be able to use these mini-outlets to make minor purchases (e.g., purchase a set of mugs, as opposed to an entire living room set). Do you agree with this idea? Why or why not? 

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