WHO?
Ingvar
Kamprad
Elmtaryd
Agunnaryd
Mission:
IKEA started in Sweden over 50 years ago with one man’s vision. Ingvar Kamprad, the founder of IKEA, wanted “To create a better everyday life for the many people” through good FORM and FUNCTION, at a LOW PRICE. http://businesscasestudies.co.uk/ikea/meeting-the-needs-of-the-consumer/introduction.html#ixzz2kto1mjMn
In order to realise the aims of his business idea, Kamprad needed a way of designing which would make it possible to maintain high quality standards, while at the same time making reductions in price. The solution he came up with was based on common sense and a respect for the customer. He carried out detailed research in the different life stages and the needs of customers at each stage (e.g. setting up home for the first time, raising a young family, retiring etc.). From this, he was able to calculate what customers would be able to afford, while still having some money over. p,84
Consumer:
IKEA is basing their
stores around attracting young, lower income individuals. College students and
young adults, who tend to be in the low-income category, are a big target
market for IKEA because these are the individuals who are looking to buy
furniture for the first time. They are not looking to spend a lot of money
because they are still unsure about their futures.
IKEA targets people with a
“do it yourself and save money doing it” kind of lifestyle. IKEA focuses on
people with this lifestyle because they are the ones that are not going to mind
traveling a little bit and assembling the furniture on their own in order to
save some money.
It’s also replaced the family day trip. Going to Ikea at the weekend is the new family outing. P.104
Most major corporations don’t provide on-site childcare, yet Ikea does – for free. P.103
The Store:
The Swedish delicacies in the restaurant and in the food
shop at the end of the store are all part of the Ikea experience. P.69
Ikea is like a museum of the modern world. Herd-like
instincts are encouraged. P.100
The Ikea pathway makes it almost impossible to stick to a
list. Even the most disciplined shoppers will find it hard not to be tempted
into buying something they didn’t even know they wanted until they saw it in an
Ikea display. It’s a clever selling device, and manipulates people into buying
things they hadn’t previously considered. P.104
Promotional tools:
It’s easy to forget that Ikea’s most powerful weapon is its
catalogue. It’s read more widely than the Bible. It’s the crown jewels of Ikea’s
communications. In 2004, 145 million copies of the catalogue were printed in 48
editions and 25 languages. P.133
The catalogue persuades us that Ikea can tidy and transform
our chaotic, hectic lifestyles. P.133
SUCCESSFUL?
Great SWOT on http://www.strategicmanagementinsight.com/swot-analyses/ikea-swot-analysis.html
Figures:
With an intense focus on customer experience and value, IKEA reported an outstanding 9.5 percent sales growth and introduced 2,000 new products to its stores in 2012. Working to maintain a relevant instore experience, IKEA enhanced delivery, assembly, and installation options and opened 11 stores in nine countries, including its first South American store in the Dominican Republic, and released plans to open at least 200 stores within the next eight years. Now operating in 40 countries, notably gaining presence in Asia and the Middle East, the brand also became one of the few businesses to experience growth in Europe in 2012. (more on site)
IKEA is no 26 on Interbrands Top 100 Global Brands list 2013. +8%
Above info from: http://www.interbrand.com/en/best-global-brands/2013/IKEA
Mr Ohlsson argues that IKEA is more competitive as a privately owned company. Instead of sweating to meet the quarterly targets the stockmarket demands, it can concentrate on long-term growth.
Understand their consumer:
When the Ikea designers prepare a room set they have got a detailed picture of customers in their head: what kind of clothes they wear, what kind of car they drive, what kind of taste they have – every detail. P.104
Price
Sourcing cheap materials is essential for Ikea’s low prices. P.93
Designing products that could be flat packed and assembled by customers enabled Ikea to cut costs significantly. They no longer wasted money transporting empty space with its products, and lowered both its storage and transport costs. P.82
One of Ikea’s entrenched competitive advantages, difficult to replicate, is quite simply that the product itself looks more expensive than it is. P.93
Customer satisfaction:
Ikea gives you a feeling of being useful and practical –
you’re doing something tangible for your home. P.24
Ikea’s way of shopping, of putting your stuff together and
taking it home – this is an innovation Ikea owns. This is why it’s so cheap and
this is what differentiates it from the competition. P.24
Change people's taste:
Ikea’s philosophy was that if you can’t change the product
you’ve got to change people. p.123
New advertising brief was to persuade people that modern was
good for them and change their taste. P.124
APPLICATION
- They understand their consumer
- Stick to their promise
- Keep their business strategies simple and realistic
1.
Ikea has a meaningful purpose. It understands
that the way to make money is to be dedicated to a vision.
2.
Ikea is driven by long-term thinking rather than
short-term sales pressure.
3.
Ikea understands the importance of being honest
and transparent
4.
Ikea rarely asks its customers what they want,
but uses good design, low prices, and challenging advertising to persuade them
5.
Ikea turns problems and difficulties into
opportunities.
For interior design industry to take away:
1. There are a number of different consumer types who use pattern books, much like Ikea, therefore they need a detailed picture of each consumer in their head before they create and promote their designs.
2. There are weaknesses and threats for the pattern book (see SWOT), however they should turn these into opportunities that can benefit both the consumer, designer and retailer.
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