IKEA

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IKEA
BA 495
Rebecca Fackrell James Lee Kellen Huddleston
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Introduction to IKEA

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

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IKEA Today

• Opened 21 new stores in 2008
• 253 stores in 24 countries as of August 2008

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Competition

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

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Target Market

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

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Advertising

• Multiple campaigns over the years, most banned in
  the US
• -Tidy Up
• -New Socially Friendly Ads

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Store Layout

• Like a Maze.
• Designed to simulate walking through a home

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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).

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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.
• IKEAs movement into E-commerce with its new
  campaign may take away customers need to visit
  stores. Thus, reducing the effect of their
  displays directed at causing impulse buys.

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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 Macys Home
  Store, etc.).

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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.

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Questions?
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Sources

• IKEA Layout
• http//design-crisis.com/?p311
• Everythings better in an IKEA kitchen
• http//www.youtube.com/watch?vzBjd5gOdeCkfeature
  player_embedded
• Tidy up!
• http//www.youtube.com/watch?vWzMuax75s3M
• Facts and Figures 2008
• http//www.ikea.com/ms/en_US/about_ikea_new/about/
  read_our_materials/FF08GB.pdf
• Target Market
• http//www.brandchannel.com/features_profile.asp?p
  r_id138
• Competitors
• http//www.businessweek.com/magazine/content/05_46
  /b3959001.htm
• History
• http//www.ikea.com/ms/en_US/about_ikea_new/about/
  history/index.html
• IKEA America at Home www.ikea.com/ms/en.../home_
  campaign/americaathome.html
•  IKEA US Selects AOL Advertising for Companys
  Display Advertising Campaign http//www.reuters.co
  m/article/pressRelease/idUS9042621-Sep-2009BW200
  90921