Ikea - Competitors and Market Position

Ikea

Competitors and Market Position

Ikeas colorful history blossomed during the mid 1970's with the opening of two stores outside its Scandinavian borders. The store was located in Zurich, Switzerland, and it would not be until 1985 when Ikea further expanded on an international scale. Clearly with intervention into foreign markets Ikea's intention was to increase market share and to become internationally competitive.

Ikea's success is based on their "Flat Pack" furniture. Their product line rarely competes with other leading furniture companies. Ikea offers practicality and price over quality and fitting and price. Ikea's convenient innovation eliminates the fitting and delivery costs that normally make up a significant percentage of a unit cost. This enables prices to be kept to low and at the same time facilitates Ikea to undercut all its direct competitors' prices. The IKEA business idea is to offer a wide range of home furnishings with good design and function at prices so low that as many people as possible will be able to afford them.

Ikea aims at the masses. Products that leading competitors provide (MFI in UK) are fitted, delivered and of a high quality, however this is reflected in the price.

"Most of the time, beautifully designed home furnishings are created for a small part of the population -- the few who can afford them. From the beginning, IKEA has taken a different path. We have decided to side with the many."

Ikea know that a Market such as home furniture and is relative to all social classes. Whether rich or poor all home owners will furnish their properties, Ikea offer the facility to do this at a fraction of the price when compared to that most high street retailers, this is why they have been so successful!

This quote was taken from an American source and exemplifies why Ikea have made practicality of product so successful. The American market potentially is the biggest international industry Ikea have got into, with the consumer attitude

"You can buy a sofa for as little as $200, but it looks as good as the top-of-the-line model that retails for just under $1,000. That you have to assemble everything when you get home doesn't seem to deter people, perhaps because it