1) Which of the following are components of IKEA\'s strategy? (select all that a
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Question
1) Which of the following are components of IKEA's strategy? (select all that apply) A) IKEA products are designed to last for a lifetime B) Within the price range categories (high/medium/low), IKEA seeks to be 30-50% cheaper than the competition C) IKEA owns all of its own suppliers so it can control costs D) IKEA aims to make tasteful, well-designed products that do not make customers feel cheap
2) At the time of the case, the country with the most IKEA stores was Sweden. A) True B) False
3) IKEA describes its typical American shopper as someone who like to travel abroad and take risks. A) True B) False
4) Which of the following statements are true of the furniture retailing market in the U.S. at the time of the case? (select all that apply) A) Only high-end retailers offered delivery services B) High-end furniture retailers had luxurious stores which tapped into customers' desires for prosperity C) Specialty retailers competed on having a wide selection, driving up their inventories D) Low-cost furniture retailers tended to have stores which had a dreary atmosphere Y 10 For the exclusive use ot Y. Sherhan, 2018. HARVARD|BUSINESS|SCHOOL 9-504-094 IKEA Invades America In 2002, the IKEA Group was the world's top furniture retailer. With sales approaching $12 billion, IKEA operated 154 Exhibits 1 through 4) In the United States, IKEA had 14 stores, with stores in 22 countries and serviced 286 million customers a year. (See to open as many as nine IKEA from other furniture more in 2003. There were a number of factors that retailers-its stores were strictly self-service and featured such amenities as playrooms for children and Swedish cafés, and all of its furniture came unassembled (customers were together the furniture on their own)-yet there was no question about the new store opened, it was not unusual for thousands of shoppers to line up on the first day expected to put s success; when a Company Background IKEA was founded in 1943 when 17-year-old Ingvar Kamprad decided to start a local catalog company using some money his father had given him. Initially, the company sold basic household goods at discount prices; in 1947, however, Kamprad began selling home furnishings. Six years later, Kamprad opened his first furniture showroom, and two years after that, IKEA began designing its own low-priced furniture. In 1958, IKEA opened its inaugural store, in Almhult, Swedeny at 6,700 square meters, it was the largest fumiture display in Scandinavia at the time. By the time IKEA opened its flagship store in Stockholm in 1965, IKEA had become the favored furnit which ultimately became the prototype for all of IKEA's retail outlets-was Guggenheim Museum and featured a childcare center, a restaurant, a 1,000 cars. The store's magnetic appeal was apparent from the start; literally thousands of Swedes showed up on the first day. Before long, IKEA was opening similar low-priced fumiture stores in countries beyond Scandinavia, first in Europe, and then in both Asia and North America. (For a more detailed history, see Figure A below.) destination for price-conscious Swedes. The 45,800-square-meter flagship inspired by New York's bank, and enough parking for The name IKEA came from Kamprad's Initials.combined with the firnt letters of the names of the family farm (Elmtaryd) and village (Agunnaryd) where Kamprad was raised discumion. Cases are not intended to erve s endoemen management oeder copies oe request pemminsion to reproduce materials, call 1-800-545-76 wese Harvard Bushs School hblib?ng, thann, MA 02161 orgo? mpnoduced, stoned in a netrieval system ned in a preadshet, or transmited in any form or by any means electronic, mechanical www H pharvardada ?prt of this publication may be ecording oe otherwie without tle permisalon of Harvand Business School This document is authorized for use only by Youset Sherthan in Service Operations 2018
Explanation / Answer
1, B) and D) are true. D) is in the paragraph that talks about low value with meaning. IKEA has multiple suppliers in various countries. Also, products don't have longevity.
2, False, it is Germany (see exhibit 4)
3. True , See page 8 para 5.
4.B) C) and D) - see page 6 and 7 of case. Even low-end retailers offered delivery.
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