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Ikea Case Study

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Cost Efficiency
The important factors which funded to IKEA’s tremendous success is by keeping the cost between manufacturers and customers as low as possible. IKEA uses supplier management by organizing competition between suppliers to get a lower price. Besides, it also has competition between internal designer with the freelancers to come up with the best mix of design, price and materials. The company also focus on cost efficiency by mixing high quality for the exterior and low quality for the interior materials. Apart from that, the success of IKEA involves its cost efficiency and price competitive “flat pack furniture”. IKEA’s product items are pack compactly in flat pack to reduce storage space during and after distribution. Besides, IKEA’s outlets were designed on strictly self-service theme with just basic customer advice provided. In order to maintain low cost, customers were required to transport and assemble the products themselves.

Product Differentiation
Low price is not appealing unless it represents good value for money. IKEA’s products are differentiated by its niche style, simplicity, design, space-efficiency and low-price. Moreover, its products are based on a functional approach to design. IKEA adopted the corporate slogan – “Low price with meaning” with the commitment to offer customers with tasteful, well-refined designed products that did not make customers feel cheap.   IKEA sold many types of furniture with limited style selection that are attractive, practical and easy to use to suit mass market.

Experience shopping
IKEA develops most of its success in the carefully planning of its gigantic retail outlets. Its gigantic retail outlet is based on “one-way” layout which leads customers along “the long natural way”. Customers are able to see and feel everything inside the show room and lounge on the model furniture. IKEA’s create a unique experience to customers that makes it fun to spend time in IKEA the whole day and enjoy...

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