tube tating Growth by Caer (rin) ‘come vor ia Bor Ce ae co 8 eonpacroee whee Camper = “Ss ‘ewe sm a Tae Sa Se ae ieee Freeones Teenie Tem = Harvaro|susiINess|SCHOOL 9-504-094 IKEA Invades America fn 20m, the IKEA Group was the works top furniture retailer, With sles approuching $12 ec IKEA operate st sores in 22 counnes and serviced 236 lion customers a yeas. (ee Tahible rth) lathe United Sts IKEA had 1 stores, with plans o open as anya ine Pee in here were a number of factors thal dingushed IKEA frm other furtire ‘Reet tres were Sly self sceice and featured such amenities a playrooms fo ctldren ‘Su Swedish cae, and ll of future come unassombled (esters were expected {o put together th arturo tei ow) pet there was no question about he company’s sucess when a Imeore opened. it war tunel for thousands of shoppers to ine upon the fist day. Company Background IKEA was funded in 1983 when 17year-cld Ingvar Kamprad decided to start tcl catalog, company using sme money his father had given Kin nial, the company sol basic household (gual dacoum prices n 13, weve, Kamprad began sling home rising. St yor ster, imprad opened fs fst furitreshowroor and wo ear after that IKEA began designing is {hn Tow:plced fut n 185, IREA opened inaugural soe in Alt Sweden at 6700 ‘Sure meters was th largest future dla in Scandinavia athe ine by the time IKEA opened its flagship stor in Stockholm in 165, IKEA had become the favored fumitre shopping. deviration for prceconsciow Swedes. The 45600- teat way tase tr Fonscton posters Than ou bayer on a ovr te wa fod aus wih he most tl ‘au marie new by bona lS ta wc a ely ed cat (iment ces “an you do he MER cto ed ving th toe. yo sacs tho fntre yours ‘spl top th acsovbs arnoine betaian ont ha re poet ov con ga heh hoe ‘Sh, and Serle cn yrs Tha eae we Got chrp your trys fu cat ay Coon oot ‘nm Sotapethe we save ey. or sone rye. Sue Unt perm fle KEA Spe 8 In ation, most customers found the IKEA shopping experience to he immensely appealing ‘over he yeas IKEA had refined etal approuc, bling te success fe eigial gal ‘Store Socom. Although ts stores ed toe evernnt—a tpl ult coun 580 0 "35100 square meter—the stor layouts were areflydanignd. Upon entry. shopper were gently ‘cemed ino» predetermined pa trough cheerfully decorated model blooms hitch, Wing * pea vr Vechten arya ante! et oy ‘nin a He pean Cone Aes hr oes see== TS ; - _ ox Seen [oto To mn 1@ stun concept with the ated ae a tak You hve foe ae copy ay mce—the way ms have a “ompstonee—the way west cutout stores and cinloguen? * SP ® SPY our interior Furniture Retailing in the United States nthe United States, urate ae ne py a AM 4 en a le 02" he “pelsered ire Greer tables dining em a ire ago ae ny, eling ead ts, bedoom omar) an ot and ephabered fant) each ncsiing en mse The ft os See eect ay es See nae ee selection; many sors lz ofered intro design services for consumers inert in a more Complete home makeover tee iy ns pnd ty tn ey el at nis Sa Se Sarit et vas Bee Some Se wii my sedge ds pee pe oe Exapesy int cree vie gop oan eae STi rey cor et eg hema ea nae a Sie ere soe ren iain mance teas Sham py wns som hho ay ne, i oe ae salfegy cee Seti tc se en oe SES muer iSe Sayed pee le yee Sereda San BSS aarti ane goed Seni Scotor a aeatatmoa ey ‘The salespersons gol was aways the ame: To reasure customers thatthe furniture they were ‘buying owl lt s Metie- This was pariclrly important given that Americans were norious for their rlatance to buy new fumitre-the conventional industry wisdom was tht most ‘Amoricans hung ono thei sofa for mac ger hr eas and tence to “change ther spouse ‘cotton a thelr dining room bl, bout 15 Ue ete Fall, almost ll furniture reais (lung many low-end eles fered delivery services, sometimes fee of charge sometimes for an additonal fae (Base future was usally sd in ‘semble form, tas eu for customers to warsport the future on test own) AS prt of Bs (livery serv, most etalers fered to up the new fumstre the custom's home even this Involved reaanging exiting Furr; ey would also cart aay the ld frnture ithe custemer By offering these delivery services sealers cold guaratze tat ence customers purchased 3 pice of friar, al they had to do was waa few weeks for it tobe debvered, at which bie the Fart would be se up nee home who tei having ots age IKEA Invades America tras in hs content that IKEA crmpetd in the United States IKEA's sacs in America id not conte cai. Alter opening ft US sore Pladlphia 1985, the company discovered that ‘Americans didnot He products: appar, beds ad kitchen cabinets didnot it American {cts and appliance ae wore to ard for American comfort product dimensions were i timers father tan inches, snd te Ktchenware was too small for Americ singe preferences. “Ae one manager rca "People told us they were drinking out of the vases Flowever by paying clase atenton to cstomer complains, IKEA had bon let aes those problems eying on marie research o acjst its product neup and merchandising, citi Mati eer rating ma rents Ain, gna tm ed “How te Dayal Se St mre ek sm kan Ne pviouty KEN hn od mag manage x Nov Ane, qed ih Ln Hw te ‘ape ng Amc Teen Yo is Ono 2[At the same time, IKEA had launched a high-profile averting campsign designed to get Americans to fake 2 tore “comimitment-ee approach o fumitureJouphine Ryser Dumont ‘the managing director of IKEA of Sweden, expand Wen you think of your own Me, there's 2 Sime for sever different liestyes. That old, tratonal stuff t mang us fol tho other way, that things cavt change, th king responsi for your things mocesmportan thin king oponsity fe your Me 1 ‘OE to replace them, to get i of them We dor thik wegen to ve one waaay ‘Our eligi: sj erature Change" [Avan example, one IKEA ad campaign cll “Unborin” had featured svies of levision ‘commercials poking fun a America’ unwilingoss to port withthe furatre. The best know ck ‘hese commercials had been an award-winning dete by Spike Jone a dict bet hon fo ‘is film "Boing Jn Malkovich" The spt temply tiled "Lamp had opened wit a dcorded lump siting forty on the sidewalk in the ra and Had concluded with an aco turing to te camera and saying. "Many of you fe bad forts lamp. Thats beens you ae ay." By the mi-19%s th company’s fertune nth United Stats had began to improve nd fmm 197 2001 the company was able o double vevenses inthe United Sates, fom $00 lon 10 ‘S12 billon, By 202 the United States was IKEA's thd lagest ae (ater Gemma a Brin, ‘sce Exhibit’) and its US stores were servicing ose 0 30 nln American customers yen ce Eihibit 7), Av aother indication of IKEA's sucess, the company’s hoe restnarants were Row ‘the Ithlngest ood chins America As for its American customer base, IKEA desrbed ite tpl shopper asthe sort of person who trwvelod abroad, hed taking rik, Iked fie fod and win, had feguent-fir pl, tnd was an ly adopter of consumer tchnalogis such ae Walkmen, lptop, and ell hoves acon, TKEA dese i esl customer asthe typeof person who ccd gure) ‘Shopping at IKEA For IKEA cstomers, shopping t IKEA requir sme preparation. As the company’s Web site advised: "Be prepared Mae's it of anything you may med for your home. Take mesure ‘of spaces you wat toil with fama. Andie fe Uses room in your er You neat Everything eb cusiomers needed o shop at IKEA was avalale atthe stor etance: pencil per. tape measures store guides catalogs, shopping cars, shopping bags, and solr Allo he $loes were selfservic, of eastomes fund sale ems they wanted they could plac the er thar shopping carts I customers wished to purchase anger lems, they could down the em rmumbers the then neded to pase through the IKEA warshoue fo Pick up ther Mat parked Hes Tefore proceeding to cheout (Sleserve tolls were avaiable to help customers carry tt Prchass rom he warehouse fo he checkout coun to tec) Customers were not only expected o transport thi purchases home they wee alto expect 0 assemble thr purcass on ther own. Acoring tthe Web st, “Picking up your purses an "pie yey Duet maging ico EAS, tla an “How he Dene Sa ind area an fat ese ae ‘Een REA hr met mr ce a id Hw Doe Ca AP Imporan part of IKEA's approach to cstomerinvolwement. Specify if you can do simple ‘thing tke ick up Your purtuses and aswmble them at home, wel hae pies ow. ln terms of product Slaton, IKEA sold many types of furniture but is style selection was limited acrording othe “matin” As the Neb she expind “We don't ave everything, We dt Ihave the very etreme or overdecorated We only have what haps bull a home at has room fo ‘ood ving" IKEA abo sold every manser of household tem, nding dinnerware, gs lamps, Sin docks The company’s tol preduct range consisted of about 1,00 diferent products many of ‘thse ters featured bald ols and whims prot ames Tick lan cock, Fis ash cn and Bamerang clothes hangers 1 customer preted io shop witht tc chs they cold dap thir Kids ofa he commpany opted clear ty on wayne stare. they gt hay ey oul aap by UHC TREA rear ors ances And they need stance with shopping they could op by asal dan geet tom EA repmeentnve. The ao of elas rpe cues was que Ube however omit wih he company solace the Looking Forward IKEA's gal was to have tres in operation inthe Unite Stats by 2013. Already, IKEA was the fastest growing furture rear inthe country and— excluding general merchandise retailers ich sr Wal Mat, Offce Depot and Sam's Club was the severlargstfurntrevtaer i he Untied States™ (See Exbits) As ene rays put Not nly dows IKEA have monster tres nd ‘pat prices, as als created a unique ne. Is the quintessential pone retalern America® Dahivig ade, “The mor tors we bald and the more we increase our markt share the more sre have to fd way to appeal toa trceder ube. Scandinavian design ad eye ea niche and ‘hat to everyone's tae. Bat we dont nant toe jut another supplier of Wadional fete ‘Scandinavian designs what makes ur ungue. We have find abalnce™ ° Twn" ane Seed Pda Say None 6258 ee ees (Saya Beara Skea ne aig pe of 9A Cpt Co a “A in On ah”neepeneatao Twas ams Tow oi IKEA Group: Sles Over Tne Yer Ears Date tex___ tus ts 003 er1a0ien ——s1228iten, or eos bion —§113bton 00 spin Sian ‘ee Crete, “Gasp 108 sation st on Se angie fe IKEA Wah ate wei sete. Fra Spar hp Echegeemran fee de Exhibit 2 IKEA Group: Sales by Region eran) Revenge Now Area = faa a ee. FT 308 ‘Spare Sat Rew Eshibit 9 IKEA Group: Top Five Sales Countries (Fv 2m), fede ee emany so, Unt ga = ed Sate = Season = erates [tiki Teas Fahibit «IKEA Group: Store Locations (as of ‘vguc 31,291), PEEEE ELE nceiodas saquepggneqtsvgaqeesy yea aay HY | Soure Compton REA Web te canon Tomnee 18/ @ihibits IKEA Group: Purchasing by Region FY 201) Mites SAMntoeg Fegan 1 Eshibie Leading US. Furniture Retailers (anked by 2002 sales of fuente ard bedding) aa Ege sn aa rr eis See ome * — finee <: i mi. = & 3 Sem === occ Sar e 7 =o $e sa 1 Sma ; So, a BAM 6 REA coupe Pc cha Pd : = as = aa : aaa 3 Bie x S eres = * es 5 2 2 Ss 4 2 21 Oftee dex BSSSPRis ree 2 eee ~oaeees 3; = et = 2 ee rope ‘Sce Ade fom Amit Teva nd Oren” Sond Pars FEAADIL7 IKEA Sores inthe US (sof August 312002) Ine sane Nora a a a ee a oe Eanes ae cea ial pees == ead = eas, =a Sea, a eI cet