Analyzing IKEA's Expansion Strategy in the US Market (MRKT20057)

This case study analyzes IKEA's expansion into the US market, examining its competitive advantages, low-cost structure, and brand image. It explores IKEA's strategic focus, including the importance of understanding US consumer behavior and adapting products to local tastes. The study also delves into strategic alternatives for further penetration, such as adding more services, improving customer relationship management, and maintaining a strong brand image. The analysis considers the potential impact of tailoring stores and products to local preferences, and ultimately concludes that IKEA must balance its global strategy with the specific demands of the US market to succeed. The case study references key academic sources to support its findings and provides a comprehensive overview of IKEA's marketing challenges and opportunities in the United States.

MARKETING
MANAGEMENT

INTRODUCTION
• IKEA is one of the known brands around the world due to the quality, stylish as well as low cost furniture along with the
different home furnishings.
• The entire success of the company is based on the operational excellence strategy of the company in the supply chain,
production along with the marketing activities which have been applied by IKEA in order to be successful in the market
• It is widely popular in the different countries, furthermore, the company is trying to expand their brand operations in the
US market
• However, there are different kinds of inconsistency in the traditional furniture market in the United States and low cost
philosophy of IKEA Company.
• From the overall analysis of the case study, it can be identified that IKEA needs to create proper balance between the
operational excellence strategy and the demands of the consumers for matching the quality of the products

KEY COMPETITIVE
ADVANTAGES OF IKEA
• The low cost structure has been the very core of the business of IKEA wherein the high quality and low cost
strategy fits with the current state in the entire economy
• Proper offering of the convenience factors within stores of IKEA would fit well with low cost structure of the
company (Lasserre, 2017)
• The main aspect of maintaining the low cost business model is to provide the different customers with unique
shopping experience (Frynas & Mellahi, 2015)
• IKEA supplies the different customers with the different possible materials which are required to complete their
shopping when they enter the store of IKEA in any part of the world
• IKEA Is not set up as the traditional store, as they provide the different kinds of added amenities. Furthermore, the
brand image is the key aspect of IKEA and they try to provide the different products which are environmentally
friendly and cost effective (Inkinen, 2016)

STRATEGIC FOCUS OF IKEA
TO EXPAND FURTHER IN US
MARKET• Overwhelming attitude of the customers in the USA market is one of the most essential
strategic aspect which is required to be considered by IKEA to improve their business
operations in the market of USA (Nambisan et al., 2017)
• The second key issue is the quality of the products and services as the different Americans
prefer the different value driven products and services which will be beneficial in improving
the overall efficiency in introducing such products that will attract the customers (Coltman et
al., 2015)

ANALYSIS OF FACTOR FOR
POPULARITY AND GROWTH
OF IKEA
• The brand image of IKEA is the strong strength of the company as even if the customers never
visited the store of IKEA, but they have huge idea on the blue and yellow logo of the
organization (Stead, & Stead, 2017)
• It is the symbolic representation of the modern, trendy and fashionable furniture that is based
on Swedish home based clean along with efficient service (Inkinen, 2015)

VALUE OR IMAGE:
IMPORTANT IN US MARKET
• Diversification is one of the most important aspects which is required to be used by IKEA in order
to sustain the overall growth of the company in the market of The United States of America
• The innovation of product along with development of the market are the different aspects which
will be beneficial for the overall development of the IKEA in US market
• It is one of the most risky strategies, however the careful selection of the right kind of business and
considerable improvements in the overall profitability can be experienced in an appropriate manner

STRATEGIC ALTERNATIVES FOR IKEA FOR
FURTHER PENETRATION IN US MARKET
• Adding more services and products in their store which will be enhancing the overall experience of the
different customers (Hanson et al., 2016)
• There can be proper implementation of the customer service and relationship management aspect which
will be helpful in tracking the current customers as well as overall analysis on the different kinds of
ideas to communicate with them regarding the different offers which can be offered to the customers
• Keeping a proper brand image of IKEA and the company needs to properly focus on the correct
placement of the stores

SPECULATE ON BRAND IMAGE OF IKEA
AFTER ADOPTING THE LOCAL TASTES
• The management philosophy of IKEA is to create everyday life of the customers better in the
entire competitive business environment (Schaltegger, Burritt & Petersen, 2017)
• The major business idea of the company is to offer the customers with the wide range of the
well designed, functional along with home furnishing products which will be beneficial in
attracting more customers and gain competitive advantage in the market

CONTD…
• Furthermore, the major aim of IKEA is to provide the different customers with the wide variety
of the different products and services to the customers in the market which will be affordable
by the different customers in the market (Meyer, Neck & Meeks 2017)
• All the activities is founded on the mission of the company wherein the offerings included the
home furnishing products of high quality as well as affordable pricing which will be beneficial
for the overall growth of the firm.

CONTD…
• The tailoring of the different stores along with products of the IKEA is of local taste will be
causing to the change in the overall mission of the company (Hitt, Ireland & Hoskisson 2016)
• It can lead to losing of the competitive advantage in the market along with redesigning the
overall positioning strategy along with the marketing mix which will be suitable for the overall
growth (Hitt & Duane Ireland, 2017)

CONCLUSION
• Therefore, from the above it can be concluded that in order to succeed in the US market, IKEA
needs to focus on the different tastes and preferences of the customers which will be beneficial
for the overall success of the different products and services
• Furthermore, the main mission and vision of IKEA is to gain competitive advantage along with
analysing the positioning strategy as well as marketing mix of the company appropriately.

REFERENCES
• Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
• Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship‐strategic management interface. Strategic
entrepreneurship: Creating a new mindset, 17-44.
• Hitt, M., & Duane Ireland, R. (2017). The intersection of entrepreneurship and strategic management research. The Blackwell
handbook of entrepreneurship, 45-63.
• Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and cases: Competitiveness and
globalization. Cengage Learning.
• Schaltegger, S., Burritt, R., & Petersen, H. (2017). An introduction to corporate environmental management: Striving for
sustainability. Routledge.
• Hanson, D., Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Competitiveness and
globalisation. Cengage AU.