Ikea

IKEA

With its affordable Scandinavian chic, IKEA transformed millions of homes across the world with easy-to assemble flat-pack furniture. It became a furnishing phenomenon over 20 years. And along the way, its reclusive founder, Ingvar Kamprad, became one of the richest men in the world. Privately owned - " the name was derived from the first letters of four words: Ingvar Kamprad Elmtaryd Agunnaryd. Elmtaryd is the name of the farm on which Ingvar Kamprad was raised and Agunnaryd is the name of the village in which the farm was located" (Altomare and Nattrass 1999, p. 429) the Swedish firm keeps its financials close to its vest, but IKEA has clearly succeeded with its business model of big box stores (some over 40,000 square feet), low prices, a family-friendly shopping environment, clever marketing, and tasteful, simply designed furniture. IKEA's mission statement is "to provide a better everyday life for the majority of people" (Altomare 1999, p. 430) and follows this mission not just in its furniture, but in its environmentally-friendly production and distribution techniques.

The choice of IKEA was as simple as their furniture. As children, we loathed being dragged along to the local furniture store, which was staffed by paranoid employees sure that a child's finger could cause a $1000 couch to collapse. And as we get older and had to move furniture around the house, and to new apartments, most of us wished for bookcases, beds, and other items that were made from sturdy but lightweight materials. IKEA changed the way furniture was shopped for in the US and around the world. The big box stores have immense selections, and feature cafeterias and supervised play areas for children. And the furniture is relatively inexpensive, modular, lightweight, and easy to assemble.

IKEA sells an immense variety of furniture, and also offers a sizeable economy of scale, thanks to its big box stores and catalogs. It is nearly impossible to desire some sort of furniture and not find anything appropriate when looking at a catalog or in a single store. In urban areas, IKEA even provides free shuttle buses to outlying areas where their largest stores usually stand; in Manhattan, for example, people can take a free bus across state lines to Elizabeth, New Jersey, and bring home their flat-base furniture on the roomy vehicle as well. Sheer market presence and a nearly seamless meeting of consumer demand and product assortment. Essentially, the service IKEA provides is that they make it much easier to buy IKEA furniture than any other firm on the marketplace does.

IKEA also competes through both price and quality, the former low and the latter high. "Contrary to the industry norm of outsourcing as much as possible, IKEA acquires stock in its more than 2,300 suppliers so that it can enforce its quality standards. Control of product design allows the company to specify construction methods. Careful attention to detail, construction, and packaging has helped it keep costs low." (Nattermann 2000, p. 26)

IKEA, through its modular, simple designs, also sells a lifestyle. One IKEA piece is very likely to match any other piece, and being an IKEA customer is actually a cultural signifier for a young, on-the-go American who is both money and style-conscious. The food sold at the stores, the copy and product names in the catalogs all help home this image of a postmodern, affluent but unpretentious lifestyle.

The marketing strategy is multivariate. As mentioned