Ikea Case Analysis

2638 words - 11 pages

Nova Southeastern University H. Wayne Huizenga School
of Business & Entrepreneurship
Assignment for Course: MKT 5070 Managerial Marketing (Evening)
Submitted to: Dr. Bay O' Leary Submitted by: Brooke Meltzer Claire Elliott N01589819 N01484118 Fadwa Talaoui Rida Bouchoutrouch N01446838 N01448629 Date of Submission: January 27, 2014 Title of Assignment: IKEA Case Study CERTIFICATION OF AUTHORSHIP: We certify that we are the authors of this paper and that any assistance we received in its preparation is fully acknowledged and disclosed in the paper. We have also cited any sources from which we used data, ideas or words, either quoted directly or paraphrased. We also certify that this paper was prepared by us specifically for this course. Student's Signature: Brooke Meltzer,
Claire Elliott, Fadwa Talaoui Rida Bouchoutrouch
***************************************************************** Instructor's Grade on Assignment: Instructor's Comments:

IKEA, a major furniture retailer with Scandinavian roots, has changed the way customers shop for
furniture. IKEA has removed a number of elements found in traditional furniture stores, including sales associates,
which are present in high end furniture stores to push certain furniture, and assembly assistance of their furniture.
IKEA's furniture is designed for self-assembly to be completed by the customer in their own homes (Moon, 2004,
para. 1). IKEA's customers start their furniture search by visiting cavernous warehouses, whereby the customers are
directed through endless rooms displaying sample layouts of different furniture styles by following a planned
pathway. Customers can even enjoy child care services or lunch and dinner as IKEA stores also include their own
restaurant and child care center (Moon, 2004, para. 14). The IKEA self-guided tour ends at the warehouse pickup
desk and checkout registers where customers load all purchases, big or small, to take home and assemble themselves
(Moon, 2004, para. 31). "Most retailers in the industry are in the business of selling furniture, while IKEA sells
experience -- from its bold blue and yellow exterior, the meatballs, a play area for kids and crazy promotional prices,
said Ray Allegrezza, editor-in-chief of trade publication Furniture Today" (Houston Chronicle, 2010, para. 1).
Since its start, IKEA has always been focused on ways to reduce costs while maintaining the "distinct
design aesthetic" of their furniture (Moon, 2004, para. 12). As a result, IKEA has strategically aligning itself
between low and high-end retailers. IKEA exploits cost saving opportunities in all aspects of the business, from
designing their furniture to ship unassembled in a flat box, which reduces shipping costs and allows for more
products to be shipped at once, to forcing customers to transport and assemble the furniture (Moon, 2004, para. 1,
10). In doing this, IKEA can price their products at attractive levels to customers looking to save on furniture
expenses. IKEA...

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