Anonuevo, Katherine Mae 3MA9
Chan li, Mae
Cruz, Patricia May
Pacheco, Krizzel
Rivera, Kristine Joy
Romero, Renellie
Trinidad, Kamille Marie
I. SWOT Analysis
STRENGTHS
· IKEA offers a wide range of well-designed home furnishing products at a low cost.
· IKEA offers extra services like in-store child care and play areas, restaurants, and long store hours.
WEAKNESSES
· Customers must assemble themselves the furnitures that US consumers see as a sign of low-quality products.
· IKEA's promotional strategy is not in line with US standards and tailoring it would be expensive contradictory to IKEA's principle of frugality.
OPPORTUNITY
· The US standard of living is higher than most countries but are still cost-conscious which gives IKEA an edge because of its reputation for no-frills frugality.
· The value of the U.S. dollar is stable and not prone to wide exchange rate fluctuations; thus giving U.S. consumers more stable purchasing ability.
· Since IKEA has a vast range of business (from Europe, North America, Asia, and Australia) U.S consumers are ideal because of its melting pot of cultures.
THREATS
· U.S economic recession had caused IKEA's progress to slow down
· U.S consumers are trading to have higher individuality thus they demand high customization of products.
II. PROBLEM/DECISION STATEMENT
How would IKEA meet US consumers demand in customization and high-quality while still being able to stay to its low cost principle.
III. STRATEGY ALTERNATIVES:
- Aside from just offering in-store child care and play area services, IKEA may add or substitute another service which is an IKEA assembly-personnel. With this, consumers will have the choice of assembling the furnitures by themselves or availing themselves with this service wherein an employee of IKEA would assemble the furniture for them instead. This will make the consumers feel at ease when it comes to the quality of the products while enabling IKEA to keep its saving with manufacturing and distribution costs.
- In getting back the interest of the consumers in buying furniture from IKEA, the latter could create creative advertising that will show American’s high preference on customized products. This could be made possible by letting the furniture be made as an expression of the buyer’s interest and thus, inculcating his/herself on the product
- In regards to the location of IKEA stores and future prospective areas, the management should set it in a convenient place with it’s’ target market such as areas near universities and places where movers are frequent for easy and immediate access and purchase.
IV. STRATEGY RECOMMENDATION
Out of the strategy alternatives we had presented, we recommend the first option. It states that IKEA must have assembly personnel. Through this strategy, IKEA will not only satisfy customer’s wants but will also build stronger relationships with clients. Frequent communication will lead to more accurate work and will establish the trust that IKEA and the Americans need.
V. IMPLEMENTATION
IKEA will provide stations that would be responsible for doing segregated tasks such as customization, delivery and manufacturing. The initial process starts with choosing between purchasing among the available stocks of furniture that are ready for purchase or to go to our station for customization. Our respective personnel are on standby to assist customers with their specific needs and request regarding additional features and other services. Upon making arrangements, another station will be responsible for manufacturing, followed by a reassembling station as well as another station that will coordinate the delivery or pick up. This way, costumers will have full hands on experience with the product features that will surely fit their preferences.
