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 Marketing Long-Term Supplier Relationships Places Trading Offices Worldwide Long-Term Contractual Relationships Marketing Product Design Catalogs Advertising Public Relations/Sales Promotion

SWOT Analysis Strengths Weaknesses Low-Cost Structure Anti-bureaucracy Do-It-Yourself Approach Added Amenities Weaknesses Service Trade-Offs Limited Promotional Expenditures IKEA Catalog

SWOT Analysis Opportunities Threats Urban Sprawl Value-Dominant Buying Logic Growing Popularity of Swedish Design Threats Copycat Competitors Changing Customer Needs

Future U.S. Expansion Advantages Barriers 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?

Product Description Positive Negative Cheap Trendy Hard to install Low-Priced Bad Quality Not Unique Trendy Sleek Low-Priced Good Quality Unique Stylish

Problems Price Self-Assembly Do you think that IKEA’s LOW pricing strategy is good or bad for them? When you shop at IKEA is their self assembly furniture a hassle? Do you dislike this about IKEA? Price Self-Assembly

Appeals To… College Students Kids Business Office Young Couples Do you see IKEA furniture as sheik and trendy? Business Office Young Couples Sophisticated Family

Demographics Gender Age

Demographics Education Income

Demographics Race

Question 2 How do you account for IKEA’s growth & popularity: value or image? What can IKEA do to sustain growth after it loses some cachet? 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 Value or Image? Does Value only include money? Lower prices but one may spend long amount of time assembling. 15

Commercials 500 Days of Summer Dining Room Table I Don’t Judge

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 17

Question 3 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?

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 Do you think that Ikea will last in the American market?

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 This cartoon makes fun of the Ikea approach of providing cheaper furniture that is bought not assembled.

Advertising Piax= peace. This is one of the Ikea print advertisements that appeared in the holiday issue. It was done very creative and there were several ads that were done all containing nothing but furniture or people doing everyday normally things featuring their products.

Advertising Holiday Ikea ad.

Advertising Holiday Ikea ad.

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. Holiday Ikea ad.