1) For the exclusive use of Y. Sherhan, 2018 HARVARD BUSINESS SCHOOL 9-504-094 I
ID: 330629 • Letter: 1
Question
1)For the exclusive use of Y. Sherhan, 2018 HARVARD BUSINESS SCHOOL 9-504-094 IKEA Invades America In bilio 2 the IKEA Group was the world's top fumiture retailer. With sales approsching $12 ExhibiA operated 154 stores in 22 countries and serviced 286 milion customers a year. (See through 4) In the United States, IKEA had 14 stores, with plans to open as many as nine tn 2003. There were a number of factoes that distinguished IKEA from other funiture stores were strictly self-service and featured such amenities as playrooms for children cafeés, and all of its fumiture came unassembled (customers were expected to put the furniture on their own)-yet there was no question about the company's success; whena IKEA retailers--its new store opened, it was not unusual for thousands of shoppers to line up on the first day 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.I Initially, the company sold basic old goods at discount prices; in 1947, however, Kamprad began selling home furnishings. Six years later, opened his first furniture showroom, and two years after that, IKEA began designing its furniture. In 1958, IKEA opened its inaugural store, in Almhult, Sweden; at 6,700 own 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 destination for price-conscious Swedes. The 45,500-square-meter flagship- which ultimately became the prototype for all of IKEA's retail outlets-was inspired by New York's Guggenheim Museum and featured a childcare center, a restaurant, a bank, and enough parking for 1,000 cars. The store's magnetic appeal was apparent from the start literally thousands of Swedes fumiture-shopping 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 on the first day detailed history, see Figure A below. The name IKEA came from Kamprad's initials combined with the first letters of the names of the family farm (Elmtaryd) and village (Agunnaryd) where Kamprad was raised Profensor Youngme Moon prepaed this case. Thls case was developed from published souroms. HRScases are developed solely as the baio for Copyright 0 2004 Presldent and Fellows of Harvard College. To onder oopies or request permlission to reproduce matediala, call 1-800-545-768, wribe Harvard Basiness School Publishing, Beston, MA 02163, or go to hittps//www.hbsp harvand.edu. No part of this publication may be photocopying. reoonding, or otherwise-without the permission of Harvard Busliness School OMGT 3121) taught by Cory LabanoW, CUNY-Baruch Collage from January 2018 2018. ment is authorized lor use only by Youser Sherthan in Service Operati
Explanation / Answer
Option 1: True, It is given as a case fact that it costs 6 times more to ship an assembled product as compared to IKEA's design of flat boxes. Information given on Page 4, 4th paragraph
Option 2: True, It is given that a customer is made to go through a pre defined path going through all the options. Information given on Page 5, Last paragraph (Continued to page 6)
Option 3: False, It is given that there are standard options available that customers can choose and pick from the warehouse. Information given on page 9, 2nd paragraph.
Option 4: There is no information about a centralised supply chain to respond to new trends quickly. Information on page 4, Last paragraph.
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