IKEA a Business model for Guaranteed Success IKEA is a truly amazing Company started under the guidance and close watch of Ingrav Kamprad who is a smart investor. I admire the ability of the founder to market the company from a start up to world leader in Home Furnishing and related products. Ingrav was able to capture the tips of success from very early on. The simple logic to have relatively cheap products which had quality by having a proper network of supply chain was a key.
Also other factors such as pricing, simple yet clean looks/ design, minimal space for inventory and easy packaging all combined together, help to make the company among the fortune 500 today. IKEA is a business whose model should serve as an inspiration for startup companies and also Corporation at the times of struggle. The quality of success that IKEA saw is unsurpassable, making the Founder amongst the richest people on the planet.
Ingrav is a true marketer and I believe that the company will continue to be successful as they plunge into the developing world. Yes, IKEA should start up satellite stores in location were access to nearest IKEA Superstore is more than an hour’s driving. A research into the areas demographics and spending habits could serve as an indication whether or not the satellite store is successful in the long term. Opening new IKEA satellite stores in the smaller town would give the option for the people of the place to experience the Brand.
This could serve as a way to advertize their global presence. IKEA satellite store could carry smaller items which doesn’t require much of the floor/ storage space but should include the virtual display and its detailed information so as to promote the IKEA brand. The smaller products could be display in a showcasing fashion to appeal the buyers. In store credit could be issued to customers interested in purchasing the larger goods carried by the IKEA superstore at a further location.
Care should be taken so that the ‘In store credit’ is non- transferable, it should serve as an reimbursement of the time and gas expense involved with travel to nearest IKEA Superstore. Virtual Inventory such as bigger items such as Bedroom set, Living room sets can all be displayed on a digital display with touch screen ability allowing potential buyer to interact with the system. The Pricing Information, Weight, Durability, Color Options, Estimated Available Date, Return Policy should all be included on the touch screen system serving as a self service station.
Once the larger sized good/ item is purchased, the option to pick up from the superstore or free shipping to the Satellite should be given to make the transaction convenient to buyers. References: “Furnishing the world”, The Economist. November 19, 1994; Richard Stevenson. IKEA Invades America. Harvard Business School. September 14, 2004 “IKEA to Open 7 more stores in China by 2010”, International Business Times. April 10, 2006