Success of IKEA The secret of success of IKEA is the IKEA-feeling, the culture.

The company has Swedish origins, and it's no accident that the IKEA logo is blue and yellow. The IKEA concept, like its founder, was born in Smland. The people are famous for working hard, living on slender means and using their heads to make the best possible use of the limited resources they have. Like the founder Ingvar Kamprad said wasting resources is a mortal sin. This characterizes the whole company itself. This way of doing things is at the heart of the IKEAapproach to keeping prices low. But quality is not compromised for the sake of cost. Swedenhas an international reputation for safety and quality you can rely on, and IKEA retailers take pride in offering the right quality in all situations. The IKEA product range is wide in several ways; it comprises 9,500 products that are largely the same in all IKEA stores. First, it's wide in function: you'll find everything you need to furnish your home, from plants and living-room furnishings to toys and whole kitchens. Second it's wide in style. The romantic at heart will find just as much as the minimalist. And finally, by being coordinated, the range is wide in function and style at the same time, and at all times. IKEA offers not just furniture, but smaller fixtures for rooms as well, that can be bought at the same time as furniture. Customers can spend a lot of time in the stores, even if they dont want to buy any furniture, they walk around the inside globally same formed IKEA, they get ideas how to furnish their house, and in the end they might have a plan to come back later or even buy something, probably just a candle or a vase. Many people associate Sweden with a fresh, healthy way of

life. This Swedish lifestyle is reflected in the IKEA product range. IKEA works

to ensure that products and materials are adapted to minimize any negative impact on the environment, and are safe for customers from a health perspective. They use renewable and recyclable materials. The flat-packs are also important because of the shipping cost. They dont deliver air, this means lower costs, lower emission of CO2. For example, they slimed the KLIPPAN sofa with some centimeters so in one carriage they can put 4 more sofas. Their services are also important, the childrens service, restaurant, bistro, returns policy, cancellations policy, price guarantee, transport service, home furnishing advice, kitchen planning, the family card service, etc. We would like to continue with the IKEAs pricing policy. Low prices are the cornerstone of the IKEA vision, business idea and concept. The basic thinking behind all IKEA products is that low prices make well-designed, functional home furnishings available to everyone. The firms aim of pricing policy is the increasing of trade. IKEAs message for its managers is loud and clear: Cut prices. In 1999 the Klippan was $354. In 2006 it was about $202. The retailer aims to lower prices across its entire offering by an average of 2% to 3% each year. About the place policy we want to point out that IKEA has built its own distribution network. The IKEA group had 253 stores in 24 countries, 41 trading service offices in 30 countries, and 27 distribution centers and 11 customer distribution centers in 16 countries. IKEA suppliers numbered 1,380 in 54 countries in August 2008. It doesnt follow the normal distribution policy (manufacturer-wholesaler-retailer-consumer), but it believes in the designer-to-user relationship. The companys promotion policy is based on the catalogue. Last year more than 200 million copies of the catalogue were printed in 52 editions and 27 languages. It is almost the same in every country, so it is very standardized. The homepage of IKEA is wonderful. It contains all of the information that a costumer need, it gives a lot of extra services, like you can design your full home on the site. You can search for every product, it is detailed and the price is also listed there. Practical, easy to use and clear, that characterizes the page. The IKEA store for a lot of people means a sanctuary for coolness. It sells a lifestyle; it has the power of taste-forming. The Swedish IKEA thought, that the winning of the American market will be advantageous in the competition. But this decision didnt involve an easy changing, because we mentioned IKEA has very standardised product range, but the American customers have different lifestyle, tastes and needs. So they didnt accept these traditional products. The IKEA knew, it has one choice to winning this market, and this is the adaptation. So IKEA has redesigned approximately fifth of its product range. For example the American lifestyle needs far bigger products: bigger glasses, bigger kitchen cupboard. The American consumers missed the matching bedroom suites too. It was very important to adapt to the American culture too. A

few examples: So the IKEA in America offer more typical American foods and they dont provide very much special Swedish foods. The homepage shows typical American people with rotundity. People hate waiting in lines, IKEA must have been changed the store layout then they can accommodated a new cash registers. Interesting, that this expansion affected Europe. More and more products were added to the European product range too. The main IKEA concept is young people of all ages means that the company lures customers of all ages from the very young to the elders as well, who think and like to live their lives as young people, who have imagination, energy and like design. IKEA can make a use of this concept in a global strategy that designed furniture for a lower price than other competitors offer can be sold everywhere for the targeted market segment. Sometimes regional differences appear, that arise from national habits, lifestyles and culture. What gives IKEA a huge advantage in selling its products at a lower price springs from this young concept, the customers have to bring home the products and assemble it themselves. We can imagine that after all, IKEA is considered to be successful everywhere. However, there are several places in the world where IKEA failed or had to overcome serious problems. Now, IKEA plans to re-establish itself in Japan where failed before. On the other hand, IKEA proved to be very flexible in changing to differences in any part of the world. Mentioning before, U.S. was definitely a hard job to accomplish profit and the costumers confidence, but by 1993 IKEA made its first profit there. To achieve this, the corporation had to adjust its products to the costumers need. So everywhere where costumers get what they need, especially at a low cost and price, the business can grow although differences in culture, currency, demand etc. Here are some phrases to be summarized: Product-related attributes: the most modern design, low price, acted upon national culture (U.S. ' bigger glasses), can be seen in IKEA in a furnished room as an environment, but can be taken home unassembled. User imagery: young, or elder but youthful, full of imagination and creativity, modern, people who has some selfrespect, and belongs to the middle class, as a kind of social classification. Brand image, brand personality: wellknown brand, transmits quality for and affordable price for the targeted segment. Functional benefits: related to product attributes, quality product, satisfied customers, reliable brand, fits the national, regional house furnishing styles and customs, everyone can find furniture and fixtures in the appropriate size, colour, price, practical products (use and size). Symbolic benefits of IKEA: well-known brand, shows good, modern style of high standard, social status, balanced and harmonized lifestyle, shows innovative personality, and demanding formalities.

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