* IKEA offers a unique value proposition to its customers. It offers a wide range of well designed, functional products at low prices. The design begins with low costs from the outset, striking an ideal balance between function, quality, design, and price. * IKEA introduced the flat package which can be assembled by customers * IKEA has maintained long-term relationships with its suppliers, ensuring the company has access to high-quality materials at reasonable prices. Because of this, IKEA has some of the largest margins in the industry. * IKEA’s vision is to create a better everyday life for many people, putting the concerns for the environment and people at the heart of the business.
* The need for low cost products could lead to a possible compromise between quality and price. * IKEA is a global company, so product standards may be difficult to maintain. * Furniture needs assembly and not everyone has the tools, knowledge or strength to put the furniture together. The instructions for furniture assembly are just pictures. There are no words to accompany the instructions.
* IKEA can further capitalize on the “green” movement and IKEA’s customer’s desires to have less of an impact on the environment. * IKEA is already reducing their carbon footprint by packing in less material.
* Competition for IKEA comes from traditional furniture stores as well as stores like Target, Wal-Mart, Sears, and other similar stores that also sell household products and small furniture. * Some stores have already mirrored the flat package, low cost packed furniture model. * Slow down in first time home buyers, which is a core market segment for IKEA, as well as the recession will limit the amount of customers that walk into an IKEA store.
1.) IKEA is already opening stores in many locations all across the globe. IKEA offers low-cost products, mostly furniture that is packaged in low, flat boxes, which the purchaser would take with them to assemble at home. IKEA will also deliver their products and the package design saves on shipping charges as well as shelf space at the store. Customers enjoy the experience of shopping at IKEA. The restaurant allows IKEA customers to make a day of the shopping trip. The average customer drives 50 miles round trip to IKEA. The furniture comes in low, flat packaging that is relatively easy to take with you. When it comes to assembly however, the instruction usually only have pictures. This saves the company money, since IKEA is global and would need to print instructions in multiple languages. 2.) IKEA has a one-way design to it store.
Customers walk through the different displays and can experience the entire store. At the end of the trip is the warehouse, which has the furniture packaged in the low, flat boxes. Customers can grab a cart and choose the items that they need or liked as they walked through the store. The displays are set up so you can see how the matching furniture looks together. You can sit in the chairs, open and close the drawers, and test out the furniture before you buy. IKEA does offer delivery for a low fee. The salesperson told me that I would have to buy one of everything in the store before the shipping price would increase; I believe the shipping price was $60 for everything in my order.
One can also purchase the service of having someone come to your home to put the furniture together. However, customers looking to go in and grab something quickly will find the design and layout of the store cumbersome. Customers may also see something on display that they really enjoy, however, when they get to the warehouse, they might find the shelf empty. IKEA is able to find the sold out items at other locations, however customers need to travel to the other store to make the purchase (at least this was my experience). When the sold out item is not available, the customer might want to go back to the display and find a different set of match-able items, making the shopping experience even longer and more cumbersome.