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Strengths:
The cost is lowered and transportation is easier for customers due to the way IKEA packages its products. The design of the products aligns with European cultural expectations. The brand equity of IKEA is strong and well-known in America, with anticipation for new stores.
Weaknesses:
Cultural differences impact sales, as different tastes in furniture between American and Swedish cultures are evident. Durability problems arise from the materials used to reduce product costs.
Product variety is limited. Opportunities: The price range of the products is convenient for the people who have lower budgets.
The food service provided by the store attracts people. Product design can be overviewed according to changing nations. Threats: There are many furniture companies, which causes competition among them. STATEMENT OF THE PROBLEMS The problems faced by IKEA can be examined in three parts; problems affecting consumer, market and cultural problems occur due to different tastes. The way IKEA provides service to consumers has both negative and positive effects on the buyers.
Positive factors that influence consumer behavior include whether the product meets the consumer's desires, fits the intended location of use, and falls within a reasonable price range.
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On the other hand, negative factors include products with a short lifespan, impulse buying from showrooms, and showroom designs that encourage consumers to make unnecessary purchases. Additionally, the fact that products are sold unassembled can have both positive and negative effects on consumers.
The market's strategies have diverse effects, with both positive and negative outcomes. Positive impacts include efficient packaging for easier storage, the influence of showrooms on consumer behavior, policies allowing product testing by consumers, provision of tools like tape measures for checking sizes, and amenities such as food service and play areas for children.
On the flip side, negative repercussions can arise from using low-quality materials in products to reduce costs, resulting in shorter lifespans for products.
The matrix method and market strategy have both positive and negative effects on the market due to culturally diverse tastes. Variations in comfort levels among cultures lead to differing product expectations. The analysis will focus on the issues outlined in the problems section, examining the impact of consumer behavior, market dynamics, and cultural influences on taste. IKEA's service strategy has both positive and negative effects on customers.
IKEA is dedicated to ensuring the safety of its products, such as the RUND glass mugs that have been reported to break while in use. After investigating twelve incidents worldwide, including five resulting in injuries, IKEA found variations in glass thickness. As a precautionary step, all RUND glass mugs are being recalled from markets by IKEA. Customers should return their RUND glass mugs promptly for a full refund at any IKEA store and stop using them for safety reasons. Additionally, customers are advised to independently choose products based on their needs without help from salespeople. To aid decision-making, IKEA offers tools like pencils, paper, tape measures, store guides, catalogs, shopping carts, bags and strollers at store entrances. Moreover, showrooms set up within stores by IKEA help buyers make decisions more easily.
Despite the inexpensive nature of IKEA products, which may be attributed to their low quality, they continue to appeal to customers because of their affordability. While the appearance and exterior materials of the products may be appealing, the use of subpar materials inside is a disadvantage. Furthermore, the absence of assembly and transportation expenses helps keep prices down. Lastly, IKEA's utilization of disassembled goods has both positive and negative impacts on the market.
In IKEA stores, you can purchase and take the product to your place immediately, unlike other companies that deliver the product later. However, some customers in the US prefer to have the furniture pre-assembled. Even with instructions in the package, not everyone can assemble the furniture correctly. IKEA's marketing strategy has both positive and negative effects. The product range is sufficient to compete with other markets.
The product strategy of IKEA is based on the matrix method, which allows customers to choose from different price ranges, materials, and designs for each product. This approach provides customers with more options and makes it easier for them to find the most suitable products. However, this method is not as popular in the US, where consumers prefer a wider range of choices. Stores like Wal-Mart offer more subcategories for each product to cater to American customers' preferences.
IKEA's impressive storage solutions are prominently showcased in their stores, where customers can easily grab items off the shelf without waiting for packaging. The pleasant shopping atmosphere at IKEA includes dining options and play spaces, allowing shoppers to enjoy a meal or keep kids entertained while browsing. Some visitors even come just for the renowned Swedish meatballs, showing that IKEA offers more than just furniture. The diverse customer base at IKEA reflects a wide range of preferences and interests.
When it comes to cultural differences, Sweden and America have differing preferences. Americans typically prefer comfortable designs like big, cozy sofas in their living rooms and large cooking appliances in their kitchens. In contrast, Swedish company IKEA is famous for its sleek and minimalistic designs. This difference was highlighted when IKEA entered the American market, where the desire for comfort conflicted with IKEA's aesthetic. Along with design choices, the self-service and assembly approach of IKEA did not match up well with the service-oriented mindset of American customers.
In summary, IKEA's limited designs and less durable products do not align with American preferences for variety and long-lasting items. Additionally, IKEA's lack of internal design services contrasts with the American desire for professionally designed homes. Americans value interior design and prefer to have a designer assist them in decorating their living spaces.
In the USA, Wal-Mart and IKEA have contrasting customer service strategies: Wal-Mart provides salespeople to assist customers with product selection, while IKEA functions as a self-service retailer. Despite not being a top player in the US market, IKEA intends to open 50 additional stores by 2013. The preceding sections have highlighted multiple issues that necessitate consideration of alternative solutions.
Firstly, IKEA needs to address customer service issues by expanding the range of services offered. This could involve adding services like interior design, improving the delivery system, and hiring more knowledgeable salespeople. These salespeople should be well-educated, able to communicate effectively with customers, and build relationships with them. By enhancing customer service, IKEA can better meet customer demands and foster stronger customer loyalty. However, implementing these changes will require hiring new employees, which will increase costs for IKEA and pose a potential disadvantage.
IKEA's Scandinavian approach is key to their strong brand image, so they should focus on marketing strategy rather than design. Placing stores in metropolitan areas with smaller apartments and student populations is important for reaching customers with varying budgets and maintaining brand equity. Changing their design could weaken their image, so it's best to stick with what works.
The advantage of IKEA's location is that it attracts most of their customers from those areas, but a disadvantage is that it may hinder their expansion to other areas, particularly cities where most Americans reside. To remedy this, IKEA should focus on creating advertisements, especially online ones, to draw in more people. In addition to advertising, they could launch campaigns that position them not just as a furniture company, but as a trendsetter in style. Like other successful companies such as Apple, IKEA has the potential to grow by establishing their own unique image as a style creator.
On the other hand, to capture this image, money must be spent on creating advertisements. It is recommended that IKEA implement customer service as a solution. For example, offering home delivery for large items like closets can be a good option because customers may have difficulty transporting them with their own vehicles. Hiring a delivery service can be more expensive, and customers typically choose IKEA for its affordable prices.
Given the preference of American consumers for personalized service, it is suggested that IKEA establish its own delivery system with trucks and delivery personnel. In addition to this, IKEA should also hire competent sales staff to assist customers and address any inquiries they may have. Furthermore, the company should employ its own team of designers who can cater to customers' specific needs by providing in-home design services.
IKEA's Customer Service Challenges and Solutions. (2020, Jun 02). Retrieved from https://studymoose.com/ikea-invades-america-new-essay
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