Introduction
The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in America. To become one of the leading furniture retailers in such a huge and promising market, IKEA has set an ambitious goal to have 50 stores within America by 2013 in order to strengthen their market position. From 1997 to 2001, the revenues of IKEA doubled from $600 million to $1.27 billion in five years so the history proofed that it seems possible for IKEA to reach this goal. However, IKEA faced several challenges with the market entrance: American’s mind-set, competition from established furniture retailer and different customer’s preference etc. To address to these challenges, IKEA needs to go for a market leader strategy expanding total market size and increasing its market share considerably to finally achieve the ambitious goal in a fragmented market like in America.
Value proposition
Value proposition refers to the combination of benefits, acquisition efforts/costs, and price offered to customers. IKEA offers the benefits of clean Scandinavian design and image, tremendous assortment, immediate and optimized delivery, a pleasant shopping atmosphere, and low prices. While asking the consumer in return to engage in self-service, self-assembly, and self-transportation, often from peripheral locations. This was a dramatically different value proposition from the traditional, full service, expensive, high street furniture store. To deliver the discontinuous leap in customer value, IKEA had to radically reconfigure the industry business system. IKEA's unique business system uses cost-conscious in-house design, interchangeable parts, high volume component manufacturing, parts inventory (rather than more expensiv ...