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 2008253 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 familiesCollege studentsFirst time home buyersRecently going after small businesses

Advertising

Multiple campaigns over the years, most banned in the US

-“Tidy Up”-New Socially Friendly Ad’s

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 http://design-crisis.com/?p=311 Everything’s better in an IKEA kitchen http://www.youtube.com/watch?v=zBjd5gOdeCk&feature=player_embedded Tidy up! http://www.youtube.com/watch?v=WzMuax75s3M 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?pr_id=138 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 Company`s Display Advertising Campaign

http://www.reuters.com/article/pressRelease/idUS90426+21-Sep-2009+BW20090921