IKEA is a successful global retailer of trendy furniture, which brand stores are known all over the world. Its advantages are low-cost operational practices, progressive corporate culture, social responsibility initiatives and sustainable environment values. The U.S. market is challenging for IKEA and its further penetration depends on the company’s readiness to consider preferences of the American customers, such as customized designs, online sales with comfortable delivery, TV commercials.
IKEA makes big efforts to maintaining the low-cost structure and cut cost by 2-3% every year. It optimizes its supply chains 53 countries, establishes site productions to find the most appropriate solutions for the manufacturing of each item (Hill & Jones, 2011). In addition, use of natural colors makes it possible to avoid the expensive coloring technologies. Sales of the non-assembled parts of furniture require less space in warehouses and trucks. Besides, do-it-yourself approach makes it possible to economize on assembling works and provide customers with more design possibilities. Furthermore, IKEA is remarkable by its strong corporate culture aimed at fighting bureaucracy, personal development and raising the environmental awareness. IKEAS’s focus on eco-sustainability fits well into the modern business tendency of using renewable and reusable materials, preventing carbon footprints and contamination. Additionally, to please customers while they do their shopping, the analyzed company proposes added amenities: for example, carracks, child-care and catering services. Finally, IKEA’s brand image is associated with a big diversity of low-cost and high-quality products. According to Bloomberg Businessweek Magazine, IKEA is “a state of mind which revolves around contemporary design, low prices, wacky promotions, and an enthusiasm that few institutions can muster” (“IKEA,” 2005).
IKEA is interested in further expansion into the U.S. market and it plans to increase the number of stores from 36 to 50 (Ferrell & Hartine, 2011). If this leading global brand wants to penetrate in the U.S. market effectively, it should remember that standard of living in the United States is higher than in many other countries. Despite the cost-conscious mentality, the American customers appreciate comfort, high quality and diversity in designs and colors. Thus, they prefer furniture assembled by the professionals instead of doing it themselves. Moreover, the U.S furniture should be of larger size and more colorful with a possibility to order a special design. Representatives of many cultures live of the territory of America; therefore, they might need some designs in traditional styles. Apart from indicated above, Americans are accustomed to online shopping and TV promotional. Consequently, IKEA ought to develop its e-commerce capacities and launch massive TV campaigns that would conform to the tastes of the U.S. customers.
Notwithstanding great age, IKEA has not become old-fashioned. On the contrary, it is a symbol of modern tendencies in both furniture fashion and life-style. A good combination of business responsibility approach and operational experiences enables IKEA to bring happiness, joy and comfort to every cost-conscious family all over the world. Healthy Image is a top priority since the company re-invests its profit into maintaining low-cost production and eco-sustainability. In case IKEA loses some cache, it will find the ways to sustain its growth. Firstly, the organization may attract some employees who will agree to work for lower salaries or will be ready to work some extra hours for no payment. Secondly, it can raise funds to develop some cost-cutting technologies and innovations, which will be paid off in the future.
To sum up, IKEA is a successful global retailer that provides “plain comfort at affordable prices” and advocates ecologically sound production and progressive working relations. However, of IKEA wants deeper penetration to the U.S. market, it should adopt its production, sales and marketing practices to the need of American customers, who appreciate diversity, comfort and quality, adore online sales and “mind-catching” TV commercials.