Case analysis – IKEA

Background
IKEA was established by Ingvar Kamprad in Sweden in 1943, by now it has been becoming one of the world’s most well-known global brands. At the beginning, IKEA is the small grocery store until Ingvar started to provide stylish functional but low-priced furniture. At that time, his dream is to sell good furniture with low price so that most people can afford them, which was to become the whole IKEA’s corporate philosophy. In order to lower the assembling price, IKEA designed the self-assembly and flat-packed furniture. As the company growing swiftly, IKEA go down to its international expansion. It has made a set of adjustments to fit to the local market and cooperated with local suppliers to save the cost, until now IKEA has become the classic case in corporate management and internalization.
Analysis - essential factors to succeed:
The essential factors can be extracted as follows: 1. Low-priced strategy. “to provide the good furniture with low price so that most of the people can afford them”, this is the dream of a young boy in 1950’s, but has become the key feature of IKEA. At earlier time, furniture is very expensive, but the emersion of IKEA changed this situation, IKEA products are much less expensive than equivalent product from other store, there is no doubt that IKEA will be definitely acceptable in middle-class household and the sales began to take off. Low-priced strategy enables the IKEA to gain the majority part of the market. 2. Adapt to the local culture. The most classic case is nothing but expansion plan in America. Unlike the success in European countries, the offering did not resonate with American consumers. For example. American sheet did not fit IKEA beds. But IKEA quickly take actions to redesign their strategy. For instance, priced the products in dollar; sourced some product in America to reduce