IKEA Rebecca Fackrell James Lee Kellen Huddleston BA 495

Introduction to IKEA History  IKEA was founded in Switzerland in 1943 by Ingvar Kamprad at the age of 17.  During the 1980’s IKEA expands into new markets such as USA, Italy, France and the UK.  New brands and sections introduced during the 1990’s  Continued growth into 2000

IKEA Today… Opened 21 new stores in stores in 24 countries as of August 2008

Competition More modern furniture stores  Target  Design Within Reach  Pier One Imports Home Depot

Target Market Lower/ middle income families College students First time home buyers Recently going after small businesses

Advertising Multiple campaigns over the years, most banned in the US -“Tidy Up”Tidy Up -New Socially Friendly Ad’sFriendly

Store Layout Like a Maze…. Designed to simulate walking through a home

SWOT-Strengths IKEA has strong international brand recognition and a well-developed demographic The IKEA business model is unique, and IKEA differentiates itself from its competitors by being the low cost provider. IKEA has mastered the art of selling designer ‘looking’ products at mass marketing prices (utilizing economies of scale).

SWOT-Weakness Even though IKEA is recognized internationally, it is largely dependent on its foreign (European) markets. Low level of customer service. Each store requires extremely large real estate ventures. IKEA’s movement into E-commerce with its new campaign may take away customer’s need to visit stores. Thus, reducing the effect of their displays directed at causing impulse buys.

SWOT-Opportunities IKEA is still fairly small in the US and has great market potential here, which they are trying to tap with their ‘America at Home’ campaign. IKEA, teaming up with AOL in an effort to venture into E-commerce, may increase the frequency of customer purchases and lead to new growth opportunities. IKEA may think about looking into smaller stores, concentrated in specific areas (like Macy’s Home Store, etc.).

SWOT-Threats Mainstream retailers like Wal-Mart and Target are beginning to mirror the model of low cost flat packed furniture. With commodity markets rising, raw materials and shipping costs are increasing significantly.

Questions?

Sources IKEA Layout Everything’s better in an IKEA kitchen Tidy up! Facts and Figures Target Market Competitors History IKEA – America at Home IKEA US Selects AOL Advertising for Company`s Display Advertising Campaign