1. What factors account for the success of IKEA?

The major factors that played

as part of the success of IKEA I think was their willingness to make things
presentable and affordable. The article mentions that IKEA’s prices attracted
a lot of their customers to buy their products rather than getting a high end
product that would cost much more money. They were playing their business
to attract the majority of people rather then focusing in on the small
percentage of wealthy people. The other thing IKEA did well was making
their stores a place where people could really get a feel for how the furniture
might look in their own homes as well as seeing different ideas for full home
makeovers. I can see this being a huge factor in their success because if
someone is going into the store looking for a simple coffee table, they might
find that the coffee table arranged with a bookshelf and entertainment center
look really nice together and decide to buy 3 pieces rather than their original
intended one piece. Probably the last thing that stands out to me as what
made IKEA successful would be their willingness to listen to complaints from
customers and then make the effort to fix those things that don’t match up
with the customers wants and needs. This was most relevant when IKEA
came to the United States and people started out disliking IKEA’s style and
products. I find IKEA’s success and growth to be very impressive.

2. What do you think of the company's product strategy and product range? Do
you agree with the matrix approach described in Figure B of the case?I think
that IKEA’s matrix approach is a very goo, universal matrix for the company.
It looks very simple, but I think simple is the best way of doing things
especially in a large company such as IKEA. Along with it being simple to use,
I think it is very beneficial in the sense that it helps IKEA compare its product
prices to the product prices of their competitors. And if IKEA is going to keep
their reputation as being affordable furniture for the majority of the people
then they need to do everything in their power to keep their prices low. This
matrix, I think, helps them fulfill that commitment. The other benefit I see to
using IKEA’s matrix is the way that the matrix separates IKEA’s different
styles. This would make it easier for employees and customers by helping
them see exactly what type of product is being sold or bought. The one thing I
see with the matrix that would maybe be a little difficult is the fact that they
had individual matrix forms for each product. I could see this potentially
causing a little bit of clutter and confusion as the company continues to grow
and expand into new products and pieces of furniture. Other than that
though, I found the matrix style to be very user friendly.

3. Despite its success, there are many downsides to shopping at IKEA. What are
some of these downsides? The biggest downsides to shopping at IKEA would
be the fact that they used cheaper products in some cases in order to keep
their items affordable for the customer, the customer is required to assemble
the pieces themselves, the products aren’t as durable, and the customer has
to hall the pieces home on their own. The biggest thing for me was reading

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 about how IKEA furniture tended to not be able to last through a move from
one place to another. It seemed that if you bought an IKEA piece of furniture,
you were to assemble it and put it somewhere that it would be able to stay
and not be moved around too much. Otherwise, your furniture would begin
to come apart the more you moved it around. As far as the assembling the
pieces yourself as the customer goes, I think this is more of just an
inconvenience for the customer. It requires time and tools, and I think that
some people just don’t want to take the time to put everything together
correctly. There are countless jokes out there that depict a man who is
supposed to read instructions for something and they usually throw the
instructions away. This is true with IKEA furniture I would imagine. So I can
see this being extremely frustrating when you put the piece together just to
find out that you forgot to add one little piece.

4. The fact the IKEA hoped to have fifty stores in operation in the United States
by 2013 is an indication of how optimistic the company is about the viability
of its value proposition in this country. Was IKEA overly optimistic in its
growth plans? How would you improve IKEA's value proposition to make it
even more attractive to American consumers?I think that IKEA’s optimism is
great. I don’t believe they are being too optimistic, but I do think that they
will need to do a few things differently. However, there are many things that I
think IKEA is doing that works very well in the United States. For example,
they make their products affordable. This is great for the United States simply
because I feel like Americans like to have stuff. All kind of different stuff.
Therefore, the more money that the customers can save on your products,
will free up other money for the customer to buy other stuff. On the other
hand, inexpensive products are attractive to those who can’t afford anything
more expensive. As far as something to change, I think Americans in general
are lazy. So by providing some kind of delivery service or assembly service for
customers would potentially do really well in the Unites States. Obviously,
these services would cost the company a little money so you would have to
find the best way of doing that without going way over on your budget. But in
all honesty, IKEA has expanded so fast that I don’t see any reason why they
wouldn’t be able to get 50 stores in the United States.

5. To achieve the kind of growth that IKEA is hoping for, should the company
change its product strategy? If so, in what way(s)? What about its product
range–are there limitations to the matrix approach? Should the company
expand its product lineup to include a greater number of styles and price
points? In what other ways should the company consider changing its
product lineup? I think in order for IKEA to achieve the kind of growth they
are hoping for, they will have to do a few things that would maybe be difficult
for them to do. One thing that I think of right off of the bat would be to maybe
make a few stores that are smaller in building size. Obviously, this was one of
the things that IKEA prided themselves on, but I think by making some

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 buildings smaller, the company would be able to build more buildings at a
cheaper price. This could also cut down on costs to power the buildings, costs
to heat and cool the buildings, and other minor expenses. I also think that by
offering more variety in their products could potentially be beneficial for the
company as it continues to grow and expand in the future. This would allow
more customers to find the styles and furniture pieces that fit with their style.
And if IKEA could create more customers, sell more products, and make more
money, they would be able to fund all of their expansion efforts.

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