SW OT Analysis Opportunities –Urban Sprawl –Value-Dominant Buying Logic –Growing Popularity of Swedish Design Threats –Copycat Competitors –Changing Customer Needs
Future U.S. Expansion Advantages –Consumers Cost-Conscious –Melting Pot of Cultures Barriers –Strong Individualism –Commercials Too Edgy
Question 1 Why are the styling and designs of IKEA products so popular? Does IKEAs blend of style and pricing have appeal to mainstream U.S. consumers?
Positive Trendy Sleek Low-Priced Good Quality Unique Stylish Negative Cheap Hard to install Low-Priced Bad Quality Not Unique Product Description
Appeals To… College StudentsKids Young CouplesSophisticated Family Business Office
Gender Age Demographics
Income Education Demographics
How do you account for IKEAs growth & popularity: value or image? What can IKEA do to sustain growth after it loses some cachet? Question 2 Hoovers Company Capsules and Profiles
Image What do you think of when you think about IKEA? Appeals to Outside Mainstream Socially and Ethically Responsibility –No plastic bags –Owned by a charity –Long term relationship with suppliers. –Environmentally conscious production and manufacturing process
Commercials 500 Days of Summer I Dont Judge Dining Room Table
Sustainable Growth Expansion into other markets –Use successful business strategy in other ways –Open smaller mini IKEAs Put products into other retail stores. –Food from their café in grocery stores
Speculate on what will happen at IKEA stores as they are tailored to fit local tastes. Is the companys trade-off of service for low cost sustainable in the long term? Question 3
U.S. Market A lot of Americans live very busy lives and convenience and fast pace is very important Most Americans are willing to pay the extra money for service rather than the do-it-yourself Its believed that the low cost do-it-yourself will not be sustainable in the U.S. and other developed countries
American Invasion Americans did not like IKEAs products at first…. –The sofas were too hard –Appliances did not match kitchen designs –Everything is do-it- yourself
Fun Facts Cheapest Item is a dog dish for $0.29 There are 48 room settings and three model homes in an IKEA showroom 522 million people worldwide went to an IKEA store last year In 2006, IKEA stores & distribution centers handled 281,734 tons of waste. About 81% was recycled.