A study of ikeas product design and pricing strategy essay

This is achieved by making cheap merchandises without doing its clients feel cheap.

A study of ikeas product design and pricing strategy essay

The IKEA Group, a Swedish company founded in with its headquarters in Denmark, is a multinational operator of a chain of stores for home furnishing and house-wares. It hasemployees. It has been hugely successful since its origin in as a mail order catalogue featuring locally produced furniture.

The IKEA brand is associated with simple, low cost, stylish products. The concept was furnishing products and house-wares that had wide appeal to a variety of markets and segments, both consumer and the business market exclusively.

Both markets were looking for well styled, high quality furniture that reasonably priced and readily available. Initially, IKEA did not customize its products to local markets, but kept to standardized products and operations worldwide.

This standardized strategy of internationalizing minimized costs. IKEA developed a model for the business, where it was able to keep costs low.

A Case Study Documenting IKEA’sSuccess and Challenges. The IKEA Group, a Swedish company founded in with its headquarters in Denmark, is a multinational operator of a chain of stores for home furnishing and house-wares. Open Document. Below is an essay on "Case Ikea Design and Pricing" from Anti Essays, your source for research papers, essays, and term paper examples/5(1). The company’s successful performance is the product of a symbiosis between its innovative product design, cost-efficient strategy, pricing structures, unique selling proposition, human resource management and winning business philosophy.

From the customer point of view, they were able to buy low cost furniture, however they had to assemble and collect the flat-packed furniture from stores.

IKEA to was able to reduce costs, as this costly part of the value chain was carried out by the customer. IKEA had excellent international procurement. IKEA was successful at i identifying worldwide suppliers and ii managing quality and iii prices with suppliers, to keep margins low.

It had excellent supply chain management and utilized the latest IT infrastructure. Due to the sheer number of orders and components required by the company - IKEA developed an efficient system for ordering from suppliers, integrating them into products and delivering them to stores.

This was achieved by a world network of 14 warehouses. Inventory was stored - and the IT system managed supply and demand to stores, keeping inventory costs low. Anticipating the needs and wants of customers. IKEA was successful in product design and ensuring ranges were modern and of good quality.

Challenges and outlook for IKEA: Its expansion into the US market. It adopted an ethnocentric strategy for going international - where it had standardized products and standardized operations.

This helped to keep costs low, but ignored the different tastes and preferences of the US market and the way they purchased furniture.

How to cite this page

IKEA had to change the model of operating, giving greater ownership to its US subsidiary, to become polycentric - stores in the US had the ability to adapt furniture and customize to suit the local market.

Costs increased as a result, but this localization approach was necessary for sales. IKEA has looked towards emerging markets e. Further adaptation to products has been necessary - including pricing strategy.

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Income levels of consumers is lower and stores needed to be located within the cities as car ownership is lower. IKEA has experienced greater competition from national brands.The company’s successful performance is the product of a symbiosis between its innovative product design, cost-efficient strategy, pricing structures, unique selling proposition, human resource management and winning business philosophy.

Deakin Business School

IKEA is well known for its unique concept, low price, wide range of product and flat packing. This report shows the understanding of strategic application, and applies the tools and concepts to IKEA case. A Study Of Ikeas Product Design And Pricing Strategy Harvard Case Study Solution and Analysis of Harvard Business Case Studies Solutions – Assignment HelpIn most courses studied at Harvard Business schools, students are provided with a case study.

IKEA has a strong international brand recognition built upon a unique philosophy and low product prices, combined with solid sales performance. IKEA’ s famous vision is .

A study of ikeas product design and pricing strategy essay

A Study of IKEA’s Product Design and Pricing Strategy Essay. IKEA’s competitory precedence is based on bring forthing quality merchandises at a low monetary value. This construct is exemplified in its’ corporate mantra ” monetary value with meaning”. This is achieved by making cheap merchandises without doing its clients feel cheap.

IKEA’s Challenge: Products Success in North America IKEA is known for its product strategy of providing low cost household items. This is made possible through IKEA’s constant process of driving costs by having efficient supply chain and business processes such as finding low cost suppliers, optimizing design of products and minimizing distribution and logistics costs.

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