IKEA is the most successful Swedish private companies in the world that sells home furniture products in each of its stores worldwide. IKEA products are cheap and affordable, with simple but elegant designs. The product concept is self-assembly by consumers that are bought in the form of flat packaging. IKEA creates an inexpensive market by producing high-quality products and sell them at a low price. As of November 2018, there are four hundred twenty two IKEA stores operating in fifty two different countries with 12,000 different products in total of IKEA product range. Now, IKEA outlet is entering Asia and also India market[1].
What Does IKEA Do?
They offer unique, high-quality, stylish and lower cost products to the international consumers. IKEA has global target market, which is similar in different countries. However, they have made some changes for the adaptation in international expansion.
How IKEA Expands Its Business from Sweden to All Over the World?
IKEA sells similar products at their outlets all over the world. IKEA products penetrate large scale economy by their large size stores in the world. IKEA offers competitive prices 30% lower than other competitors[2]. IKEA has exclusive relationship to their suppliers to have a modern, exclusive design and continuously production.Designers also work together with suppliers to keep the cost low. All stores have many shelves to put the assembled products, so that each stores can maintain the large inventory of products.
IKEA is a cash and carry retail store[3]. You can go directly to the shelf to collect the products, bring them to the cashier and go home with your purchased products. To reduce their advertising cost, they use online advertisements and provide catalogues for the visitors.
IKEA has a simple organisation staff level and gives more freedom to the employees. This management structure also helps make decisions faster.
IKEA products are mostly made of woods, iron and few products use plastic materials. You can combine book shelves and table, you can choose your own design and also colours as you wish, for example the table top and table legs can have different colours depends on you.
IKEA sells household equipments that have not been assembled, so if we want to buy the equipment, we can ask for help from IKEA to install the goods we bought, but this only applies in Indonesia and we also have to pay more if we want to use this helping service. Meanwhile in Europe and US, most people are carrying their own goods to their home and they will assemble them by themselves at home. If you buy a big item then you can send it via IKEA delivery service directly to your house.
What’s Unique about IKEA?
IKEA try to establish a brand image that represents the gentle Swedish style with environmental friendly furniture. Their products are carefully designed to attract many customers internationally. Unlike normal retail store, IKEA has one way design, encouraging costumer to see all of the products without feeling confused or overwhelmed by the variety range of stuffs. The whole store is well-designed and gives the feeling as if the customers are inside of a large furnished house, which can easily stimulate costumers to buy all the furniture that they want in IKEA, because the whole set of furniture look good together shown side-by-side.
One important thing which differ IKEA from other furniture company is its great costumer service. In IKEA, every store has a mini restaurant serving inexpensive Swedish traditional food, also they provide “Picking and delivery service”, “Home delivery”, even they change extra fee for these, but not all. This makes shopping a lot easier and helps IKEA gain large number of costumers.
IKEA does really well in its value proposition and costumer relationship, making itself becomes unique and different from any other furniture stores. In IKEA, consumers are trained to be more careful in choosing the goods that they want because they have to take notes and take their own items in accordance with the code. All of IKEA product is eco friendly because it doesn't do illegal logging and do not use plastic in packaging. So, if you’re looking for a place to shop for your home furniture, IKEA is definitely the place!
[1] https://ikea.co.id, retrieved on April 16 2019.
[2] Muhammad Abid, “Gaining Competitive Advantages in IKEA”, https://www.academia.edu/32676612/IKEA, retrieved on April 17 2019.
[3] Ibid.
Written by : Dhydan Shefaya & Di Kuang
thank you for the further information :)