team keyona abbott francisco alvarez kaitlin bumpus jasmine ruiz
TRANSCRIPT
TEAM
Keyona Abbott
Francisco Alvarez
Kaitlin Bumpus
Jasmine Ruiz
Overview
• Founded in 1943 by Ingvar Kamprad
• Focuses on Frugality & Low Cost
• Over 226 Stores in 33 Countries
• 200 IKEA Group Owned, Rest Franchised
• 28 Stores in U.S.
Älmhult, Sweden - 1953 Atlanta, GA - 2005
Functional Divisions
• Production– Long-Term Supplier Relationships– Places Trading Offices Worldwide– Long-Term Contractual Relationships
• Marketing– Product Design– Catalogs– Advertising– Public Relations/Sales Promotion
SWOT Analysis
• Strengths– Low-Cost Structure– Anti-bureaucracy– Do-It-Yourself Approach– Added Amenities
• Weaknesses– Do-It-Yourself Approach– Service Trade-Offs– Limited Promotional Expenditures
IKEA Catalog
SWOT Analysis
• Opportunities– Urban Sprawl– Value-Dominant Buying Logic– Growing Popularity of Swedish Design
• Threats– Copycat Competitors– Changing Customer Needs
Future U.S. Expansion
• Advantages– Consumers Cost-Conscious– Melting Pot of Cultures
• Barriers– Strong Individualism– Commercials Too Edgy
Question 1
• Why are the styling and designs of IKEA products so popular? Does IKEA’s blend of style and pricing have appeal to mainstream U.S. consumers?
Positive• Trendy• Sleek• Low-Priced• Good Quality• Unique• Stylish
Negative• Cheap• Hard to install• Low-Priced• Bad Quality• Not Unique
Product Description
Problems
Price Self-Assembly
Appeals To…
College Students Kids
Young Couples Sophisticated Family
Business Office
• Gender
38%
62%
Male
Female
• Age
2%
32%
39%
25% 13-17
18-34
35-49
50+
Demographics
0
35%
48%
17%No College
College Grad
Grad. School
• Income
15%
26%
33%
26% 0-30K
30-60K
60-100K
100K
• Education
Demographics
0
76%
10%
6%7% Cauc.
Afr.Amer.
Asian
Hispanics
• Race
Demographics
• How do you account for IKEA’s growth & popularity: value or image?
What can IKEA do to sustain growth after it loses some cachet?
Question 2
IKEA Revenues(in millions)
20,000.0022,000.0024,000.0026,000.0028,000.0030,000.0032,000.00
2006 2007 2008
Hoovers Company Capsules and Profiles
Image
• What do you think of when you think about IKEA?
• Appeals to Outside Mainstream
• Socially and Ethically Responsibility– No plastic bags– Owned by a charity– Long term relationship with suppliers.– Environmentally conscious production and
manufacturing process
Commercials
500 Days of Summer
I Don’t Judge
Dining Room Table
Sustainable Growth
• Expansion into other markets– Use successful business strategy in other
ways– Open smaller “mini IKEAs”
• Put products into other retail stores.– Food from their café in grocery stores
• Speculate on what will happen at IKEA stores as they are tailored to fit local tastes. Is the company’s trade-off of service for low cost sustainable in the long term?
Question 3
U.S. Market
• A lot of Americans live very busy lives and convenience and fast pace is very important
• Most Americans are willing to pay the extra money for service rather than the do-it-yourself
• It’s believed that the low cost do-it-yourself will not be sustainable in the U.S. and other developed countries
American Invasion
• Americans did not like IKEAs’ products at first….
– The sofas were too hard
– Appliances did not match kitchen designs
– Everything is do-it-yourself
Advertising
Advertising
Advertising
Fun Facts
• Cheapest Item is a dog dish for $0.29• There are 48 room settings and three
model homes in an IKEA showroom • 522 million people worldwide went to an
IKEA store last year • In 2006, IKEA stores & distribution centers
handled 281,734 tons of waste. About 81% was recycled.