Ikea Case

The market was primarily split between low-en and high-end retailers. Low-end retailers primarily focused on offering a wide array of merchandise including furniture on the basis of low prices. Aside from tight margins as part of a low-pricing strategy, there were also several â€Å"small-store retailers† targeting college students and other consumers with constricted budgets.Most of these stores were inconsistent with the environment ND displays portrayed, further contributing to poor inventory management practices and below-par customer service. On the other hand, high-end retailers carried either single brands or multiple brands as part of their product portfolio. Most high-end retailers employed expensive sales executives and focused more on offering value-added services including (but not limited to): measurement and product selection, customizable designs for complete makeovers, product delivery and installation, high number of SKU stemming from a base product, and even relocation of old furniture.Quality and service was the basis or these types of sellers, constantly reminding customers that their products would last a lifetime and that going through the installation hassle could easily be avoided. 2. When furniture titan KEA finally consolidated its business strategy in the US by the mid-ass, customers where typically defined as well-traveled, sophisticated yet practical in taste, likely risk-takers, technologically-savvy, and connoisseurs of fine food and wine. Customers at KEA look for a shopping experience that fulfills and exceeds their expectations by finding multiple types of furniture and other compliments (I. . Technician, decorations, etc) that are practical and can accommodate a â€Å"good-living† standard. Aside from fulfilling the need for new furniture, customers at KEA also valued complimentary services offered at the stores such as childcare facilities, on-site Scandinavian restaurants, and customer-service help desks for sh opping assistance. KEA open-ended states to its customers that they won t find a wide variety of same product SKI-I s in different colors or finishes, instead they have room only for what is considered necessary to furnish homes in unique, modern, and stylish ways. . KEA s competitive advantage features a well-defined supply chain strategy that allows for cost-saving opportunities when sourcing raw materials, streamlining packaging and shipping, negotiating In bulk with manufacturers, and promoting a self-service concept at store level. All these Initiatives translate Into lower prices for finished goods that customers prefer. The main disadvantages of KEA are centered on lower-quality furniture that doses ‘t last as long as other high-end more expensive products.Also, KEA furniture is not suitable for people who plan on moving or relocating as the pieces that make a perfect example of what W. Chain Kim and Rene ©e Unbroken coined a â€Å"Blue Ocean† company. The comp any's target market is considered to be niche but at the same time oriented at covering the masses and being high-volume, low-price retailers. The customer experience is unique and cannot be easily copied by other competitors. Sticking to Scandinavian-styled furniture helps distinguish KEA from traditional furniture stores while at the same time being distinctive and predictable.Blue Ocean companies such as KEA employ Continuous Improvement practices that allow for ewe styles and designs of furniture to be made available while on the lookout for cost reductions and price saving opportunities for consumers. 5. In order for KEA to continue and sustain its growth strategy and high success worldwide they have to place special emphasis to the following recommendations: a. Expand the customer base outside of established markets such as Europe and North America and target emerging economies that are also looking for inexpensive, practical and stylish ways of equipping their homes and offic es. . Offer complimentary assistance for assembling furniture at an additional cost in order to attract higher-end customers who do not want to partake in the tedious task but are willing to pay a premium for the service. Specialized carpenters and contractors should be carefully selected and trained according to company standards. This allows for furniture to last longer and survive relocation needs. C. Continue growing in POS (points of sale) in order to cover less-populated areas in current operating countries while increasing market share and widening the consumer's preference for the brand. Ikea Case The market was primarily split between low-en and high-end retailers. Low-end retailers primarily focused on offering a wide array of merchandise including furniture on the basis of low prices. Aside from tight margins as part of a low-pricing strategy, there were also several â€Å"small-store retailers† targeting college students and other consumers with constricted budgets.Most of these stores were inconsistent with the environment ND displays portrayed, further contributing to poor inventory management practices and below-par customer service. On the other hand, high-end retailers carried either single brands or multiple brands as part of their product portfolio. Most high-end retailers employed expensive sales executives and focused more on offering value-added services including (but not limited to): measurement and product selection, customizable designs for complete makeovers, product delivery and installation, high number of SKU stemming from a base product, and even relocation of old furniture.Quality and service was the basis or these types of sellers, constantly reminding customers that their products would last a lifetime and that going through the installation hassle could easily be avoided. 2. When furniture titan KEA finally consolidated its business strategy in the US by the mid-ass, customers where typically defined as well-traveled, sophisticated yet practical in taste, likely risk-takers, technologically-savvy, and connoisseurs of fine food and wine. Customers at KEA look for a shopping experience that fulfills and exceeds their expectations by finding multiple types of furniture and other compliments (I. . Technician, decorations, etc) that are practical and can accommodate a â€Å"good-living† standard. Aside from fulfilling the need for new furniture, customers at KEA also valued complimentary services offered at the stores such as childcare facilities, on-site Scandinavian restaurants, and customer-service help desks for sh opping assistance. KEA open-ended states to its customers that they won t find a wide variety of same product SKI-I s in different colors or finishes, instead they have room only for what is considered necessary to furnish homes in unique, modern, and stylish ways. . KEA s competitive advantage features a well-defined supply chain strategy that allows for cost-saving opportunities when sourcing raw materials, streamlining packaging and shipping, negotiating In bulk with manufacturers, and promoting a self-service concept at store level. All these Initiatives translate Into lower prices for finished goods that customers prefer. The main disadvantages of KEA are centered on lower-quality furniture that doses ‘t last as long as other high-end more expensive products.Also, KEA furniture is not suitable for people who plan on moving or relocating as the pieces that make a perfect example of what W. Chain Kim and Rene ©e Unbroken coined a â€Å"Blue Ocean† company. The comp any's target market is considered to be niche but at the same time oriented at covering the masses and being high-volume, low-price retailers. The customer experience is unique and cannot be easily copied by other competitors. Sticking to Scandinavian-styled furniture helps distinguish KEA from traditional furniture stores while at the same time being distinctive and predictable.Blue Ocean companies such as KEA employ Continuous Improvement practices that allow for ewe styles and designs of furniture to be made available while on the lookout for cost reductions and price saving opportunities for consumers. 5. In order for KEA to continue and sustain its growth strategy and high success worldwide they have to place special emphasis to the following recommendations: a. Expand the customer base outside of established markets such as Europe and North America and target emerging economies that are also looking for inexpensive, practical and stylish ways of equipping their homes and offic es. . Offer complimentary assistance for assembling furniture at an additional cost in order to attract higher-end customers who do not want to partake in the tedious task but are willing to pay a premium for the service. Specialized carpenters and contractors should be carefully selected and trained according to company standards. This allows for furniture to last longer and survive relocation needs. C. Continue growing in POS (points of sale) in order to cover less-populated areas in current operating countries while increasing market share and widening the consumer's preference for the brand.