Ikea Case Study

1.   Low-end value to customers: cheap price, discount, and preference by price sensitivity consumers.

High-end value to customers: high quality service, comfort atmosphere, interior design service, and luxurious goods to high-income consumers.

Consumers in low-end retailers attract by low price, practical function and people who really like shop at low-end retailers while consumers in high-end retailers attract by quality and service, and the people who really like shop at high-end retailers.   vAlso, they are more affected by overall atmosphere.

2(a). Point of difference Ikea can offer: stylish design, different material included some good material (hard to replicate), shopping experience, and huge selection.

Point of parity: affordability

What point of difference low-end retailers have over IKEA: save money because they don’t have that much selection. They just buy what they need. When people face so many good selections like in IKEA, they always want buy another.

 (b). Point of difference Ikea can offer: in house restaurant, extra service like drop the kids off company-operated children facility.

Point of parity: high quality, comfort shopping atmosphere.

What point of difference high-end retailers have over Ikea: better one to one service, because the ratio of sales reps to customers was quite low in IKEA.

3. I think low-end retailers should be more concerned about IKEA’s American expansion because they both offer low price but shopping at IKEA has more comfort experience and more choice for consumers. IKEA offer many extra benefits to consumers like children facility, in house restaurant (point of difference). Also, IKEA is a company specialize in doing furniture (really focused), this make people feel more reliable (reason to believe).

4. Challenges: The best challenge is service; IKEA’s ethos is self-service. IKEA ignored the curse of knowledge, what seems easy to professionals may not easy to ordinary consumers. Different consumers have different problems. The number of sale reps is low in IKEA, this takes consumers lots of time to find and talk with sale reps. And this self-service ethos need people prepared enough at home, but not all people like prepare at home, what if they just want somebody else to tell them.

  Recommendation: set little tips beside furniture like what is it made, what things you need to beware. These tips can give consumers some information that helps consumers’ decision when they can’t find sale reps.

  Add new features or not: Yes, according to my recommendation. This will not change the IKEA’s ethos; just give consumers more information when they need help.