How does Ikea generate customer loyalty?
Based on the SWOT analysis presented in the case study several key competitive advantages. These are as follows:
- Low Cost oriented approach - would be the main advantage for the company. As the business specific for the IKEA's products lies in the universalization along with relatively simple distribution channels and 'modest' advertising, it would allow the company to keep the prices attractive for the final customer.
- Strong Brand - IKEA remains one of the oldest companies in the industry. Along with a well - turned brand image and understandable brand values it remains recognizable and wins the confidence of its current and prospective customers .
- Reach history - As was mentioned above, company's experience allows it to remain a sort of trendsetter for existing and emerging do-it-yourself furniture producers.
- High worldwide share – despite of the fact of not being presented widely in the US market, company counts more than 300 stores in 25 countries globally. Being experienced in delivering low cost products, it would be better for IKEA to stick to and follow the 'Cost Leadership' strategy when entering the US Market. There are 2 main reasons for this:
- The company is obviously 'good at it'
- It’s becoming topical in today's economic situation
How does a company evaluate the influences on customer behavior? Customers’ behavior had to be changed from expecting showroom floor assistance, delays before items were delivered, and locations in cities or suburban shopping centers to traveling to stores off major highways, purchasing furniture in huge warehouse-like stores with few salespeople, carrying the furniture home in boxes, and assembling it themselves. The catalog assists consumers, explains their new role, and states why they win in this new division of labor. The stores are equipped with restaurants, strollers, child care facilities, measuring tape, and paper to help the consumer look over...
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