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How IKEA formed its winning strategy in America?

IKEA, a Swedish furniture company, has become a global brand, known for its affordable yet stylish furniture and home accessories. Firstly, it is important to understand the context in which IKEA entered the American market.

The US furniture market is highly competitive, with many established brands such as Ashley Furniture, Rooms To Go, and Raymour & Flanigan dominating the market. Moreover, the American consumer is accustomed to a certain level of quality, which often comes at a high price point. Therefore, IKEA had to find a way to differentiate itself from its competitors and offer a unique value proposition to American consumers.

IKEA's strategy began with its product offering. The company's signature products are flat-pack furniture pieces that are designed for easy assembly by the consumer. This not only allows for easy transport and storage, but also reduces the cost of manufacturing and shipping, which translates into lower prices for consumers. IKEA's products also feature Scandinavian design, which is known for its clean lines, functionality, and simplicity. This design aesthetic was unique to the American market at the time and was quickly embraced by consumers who were tired of the traditional, ornate furniture styles that dominated the market.

Another key element of IKEA's strategy was its pricing model. The company's products are priced significantly lower than its competitors, which initially raised concerns about quality. However, IKEA's products are designed to be durable and long-lasting, with warranties that rival those of more expensive furniture brands. This pricing strategy was particularly appealing to American consumers, who are known for their cost-consciousness and willingness to seek out a good deal.

IKEA's marketing strategy was also crucial to its success in America. The company's first store in the US opened in 1985 in Philadelphia, with subsequent stores opening in New York and other major cities. IKEA's marketing approach was unconventional, with the company opting for humorous and irreverent advertising campaigns that were designed to appeal to a younger demographic. The company's iconic "Swedish" catalog, which features minimalist product photos and quirky product names, also became a marketing tool in itself, with many customers eagerly anticipating the release of the new catalog each year.

In addition to its marketing approach, IKEA also invested heavily in its in-store experience. The company's stores are designed to be a destination in themselves, with large showrooms that feature fully-furnished rooms and a wide range of home accessories. The stores also offer a cafeteria-style restaurant that serves Swedish meatballs, which have become a popular item among American consumers. This in-store experience helped to build a loyal customer base and created a sense of community among IKEA customers.<