Ikea CaseIkea Case1. What were the sources of IKEA’s successful entry into the furniture retailing business in Sweden?Between 1935 and 1946 furniture prices rose 41% faster than household goods. Kamprad was intuitive enough to see this as a great business opportunity. IKEA took a new approach to selling furniture in Sweden. Instead of an expensive product that would take weeks for delivery, IKEA offered a product with a good design and functionality at a price that almost everyone could afford. Kamprad focused on selling furniture to young buyers who were often looking to furnish their first apartment. Also instead of the stores being small and located in downtown, Kamprad placed his stores on the outskirts of town but offered ample parking for his customers. Most importantly, IKEA took use of selling through a catalog that helped boost the business exponentially.
IKEA’s marketing strategy may have worked:
In a book I called ‘Hacking the Soviet Subway and the Future of American Furniture Retailing’ by Paul E. Meyer and John L. Wierdt, I write: “a new style of advertising and marketing which takes a novel approach from its early days. It uses only some of the familiar elements found in advertising campaigns, focusing instead on a simple but crucial aspect. In this case, the result is a strategy which has, on paper at least, a simple, yet effective approach to advertising with high-speed internet connectivity for a small business, who would be forced to make the most of its current financial resources.
The problem, argues E. Meyer, is that it’s usually no different from the usual campaign. We see a lot of television advertising now with a focus on low-cost adverts, and that kind of strategy is extremely hard to implement.
In other words, while some adverts are focused on making more of an impression, most of them have a relatively narrow, simple target audience that are either afraid of advertising or will be surprised that it works. It’s an unmitigated failure in advertising.”
Indeed, the more successful ads focus primarily on how successful they are. If you see one of these types of ads, your next impression is pretty much like “Okay, that looks familiar, but here’s something really simple that really is useful. You didn’t even pay for it before.”, “Can you try this one again?” If you spend $10 on advertising, your next impression might be the following: “It’s not so much the product as the money, you know that this makes some sense. Now, think of all the people you don’t spend that much on. They might actually be better off just paying a little extra for this. In the end these people probably are better off and this is one of the best ads of any kind. And they’re usually great and they should certainly be buying less and more for that price. But what about the rest? So what about the others? What’s the problem?”
That’s a great point, and you shouldn’t be surprised when you see a few of those kinds of ads at random. But that’s precisely what E. Meyer and Wierdt tried to do. It’s kind of like being told “you should just leave your office in a box.” Or rather, “Leave your space and don’t waste precious time getting up every day waiting for the mail. It’s all just one big bad event you have to deal with all the time in your household and when that happens, it makes you feel bad, and it’s bad for you.
The point here is: is that these ideas and tactics are much more effective than marketing at the individual level – we only think about it in small moments. and.
the value proposition of this type of advertising is that it presents a target market where people get more. It’s possible that, once the brand is successful, someone might really understand the social costs and risks associated with this marketing practice.
This approach in the real world has the potential to lead to new forms of mass distribution of furniture within households, as well as more successful ones for the people
2. What were the management processes by which IKEA coordinated and controlled its European operations?IKEA chose to do things much differently that almost all of its competitors. Simplicity and attention to detail were stressed at IKEA. With the company being so cost-conscious it was able to provide prices lower than other furniture retailers. The company operated very informally, and set its offices up in an open landscape. A senior executive commented on the office plan saying, “This environment actually puts more pressure on management to perform. There is no security available behind status or closed doors.” Creative Solutions were highly sought after at IKEA. This was shown when a new store opening was too crowded, and IKEA started letting customers into the warehouse to pick out what they wanted in order to keep the flow of people moving. Through simplicity and common sense IKEA chooses to do things that work and are highly successful.
>
