1.

What has allowed IKEA to be successful with a relatively standardized product and product line in a
business with strong cultural influence? Did adaptations to this strategy in the North American market
constitute a defeat to their approach? IKEA has become the world's largest home furnishing retail chain
with its international expansion in three major phases. Its mission is to offer a wide variety, good design
and value for "young people of all ages".

IKEA is determined to maintain a standardized product strategy with a universally accepted assortment
around the world, now carrying a variety of different home furnishings. It has limited number of
manufacturing, however, designs all of its furniture. IKEA's cost leadership strategy through high volume
production and standardized items enabled it to sustain its business. Consumers are expected to
become "prosumers", in the meaning of half producers and half consumers, thus supplying their time
for assembling work after their purchases.

Consequently, IKEA's success is due to its customer focused strategy. The principal market target is
composed of "people, who are young, highly educated, liberal in their cultural values, white-collar
workers, and not especially concerned with status symbol". Therefore, consumers with low status
concern and low conservatism enabled IKEA's success in strong cultural influences. Moreover, high
income groups have fewer cross-cultural differences and more open to adapt values to new beliefs.

As a result, with their right consumer target, IKEA was able to succeed with their relatively standardized
product line. North American market proved that standardization is not a key to success in an American
market; therefore adaptions have been made that clearly changed IKEA’s strategy. IKEA with its
standardized market changed to a global market strategy and implemented new ideas that fit American
taste in their market. Adjustments were made to their furniture that created and targeted more
American consumers.

Moreover, some adaptions might have been transferable to other targeted markets around the world.
Consequently, the North American experience has caused IKEA to blend in their ideas and start remixing
its formula elsewhere. For instance, these changes were implemented to the European market,
changing furnishing concepts such as making sofa beds in Europe. Which features of the “young people
of all ages” are universal and can be exploited by a global/regional strategy? The “young people of all
ages” share similar features internationally that enabled IKEA to maintain its target universally.

However, not all of the targeted features were shared among various cultures. Hence, there were some
adaptations according to various cultures and the relative importance of these features varied between
countries and their consumers. Nonetheless, the majority of the targeted consumers liked to perceive
themselves as practical, modern and non-traditional. In other words, these consumers didn’t stick to the
traditional way of furniture, instead saw IKEA’s designs as good, modern and practical that allowed them
to afford their products.
In this sense, simplicity and practicality was more important than traditional styles of furniture. With this
concept, IKEA was able to specifically target those consumers who vied their products as fitting their
taste with different features. Therefore, this concept with being practical and simple instead of
traditional is an example of universal feature that can be further developed. IKEA’s targeted market like
shopping for good value; therefore, they are ready to contribute their time and energy to get
satisfaction out of assembling their work.

Consequently, this willingness to contribute more and achieve better value is another feature that is
shared among IKEA’s universal target. These new changes in IKEA’s strategic plan have brought it to a
new level of international business with better customer satisfaction and greater value. Is IKEA destined
to succeed everywhere it cares to establish itself? Is IKEA destined to succeed depends on how flexible
its concept is in various countries. However, I believe that IKEA will not succeed everywhere it
establishes itself.

The concept of IKEA can slightly be changed and adapted according to various cultures, but I strongly
believe that certain changes cannot be implemented fully. This changing concept will have limitations
when it is further taken globally and need to meet the standards universally according to various
economies of countries. For instance, value of a certain sofa in a certain country is totally different in
another country. If we take a sofa in America for $300, the same product must be sold at a lower price in
a developing country due to its value differences in their economy.

Therefore, not all of IKEA’s concepts can be fully changed if they want to maintain its original formula.
Moreover, customer expectations are different in various countries, thus, IKEA would have to consider
new changes and flexibility in their concept to meet customer expectations and their value for products
offered. In conclusion, I would like to point out that there is always a limit in adapting and changing
concepts to meet various customer values and their desires to create profitable sustainability.

This essay was written by a fellow student. You can use it as an example when writing your own essay or
use it as a source, but you need cite it.

ANS 1:
World's largest home furnishings retail chain. Achieved international expansion in 3 major
phases. Summarized its mission as to offer a wide variety, good design, good value, for "young
people of all ages". Determination to maintain a standardized product strategy. Does not own
manufacturing facilities. Ikea owns distribution and designs furniture. Manufacturers are
subcontracted. Cost leadership strategy through high volume production and standardized items.
Ikea consumers expected to supply their time for assembling work after purchase, thus becoming
"prosumers".
What has allowed IKEA to be successful?
They were customer focused. As they were not selling through dealers - could obtain feedback
directly from customers. Also, Ikea sees itself not so much as a retailer but as a central star of
services. What are these universally appealing values and why were these, together with the
standardized assortment, successful in so many countries worldwide? It appears that the
countries Ikea entered through international expansion had already had a growing number of
potential customers who were not tied to a traditional furniture image. They preferred
practicality, good value, simplicity, and liked the idea of contributing by giving their time in
assembling stage. They also wanted: wide variety available at one place providing assurance that
"something suitable can be found, will be nice and simple, practical and of good value". These
factors combined with the perceived wide variety and "good" design were appealing in many
countries to a similar customer market segment. This concept...