This approach simply crashed into the invisible wall of cultural differences and fell broken. The customer service culture of the country prescribes that the end user puts as little effort into the start of a product use as possible. Looking from that perspective it is easy to see how IKEA products were less appealing compared to other items in the same price category. Not only do you pay the same, but you also have to invest extra in transportation and then the construction.
Compared to other furniture and house supplies retailers IKEA is an affordable option. The company might not be using the most robust or expensive materials, but the products do serve they time well, oftentimes longer than expected.
Still, in Japan quality is more important than quantity. IKEA products might be easily replaceable and interchangeable, but the general tendency in Japan would be to invest in a more expensive product that lasts very long than keep on replacing items from the lower price-categories. Thus, buying a more expensive piece of furniture from another retailer would exclude dimension-related problems and include delivery and assembly into the price.
At the same time, shopping in a yen shop for smaller items might be faster and easier, provided that the quality is about the same. Falling behind other competitors in compatibility, customer experience, and prices, IKEA had to withdraw in to work on solutions and better marketing strategies. It must have been difficult to retrieve from such a huge market. However, IKEA did learn a lot from the situation. In fact, many changes that have been developed for Japan were introduced to non-Japanese markets and proved to be successful.
IKEA did not want to give up on its cost-saving tactics of leaving transportation and assembly to the customer. Yet, the company had to find a solution that would suit the Japanese customer experience traditions. Customers could make lists of the items they want, and IKEA would send it to the customers for an extra fee.
This delivery service model has been copied for other stores all across the chain in all the countries. Many of younger IKEA customers in Northern Europe might not remember or even know that there was a time when delivery services were not available at all. The same goes for the DIY-approach. If you want to, you can order assembly from IKEA experts for an extra charge.
Interestingly, however, the company never gave up on teaching the customers to enjoy the assembly process. In order to promote the idea, IKEA turned to a very Swedish cultural treat that was warmly met by the Japanese customers.
The company emphasized the importance of building your home together with the loved ones. Not only by discussing or choosing the items, but also by physically participating in construction. Building your home together is a way to foster closer and better relationships. People seem to appreciate and enjoy things that they have built by themselves more and for a longer time than those they have purchased ready-made in the store.
Moreover, the flat-pack system connected to DIY-approach turned out to be especially suitable for Japan. The key principle of flat-packs, as one can guess, is to pack the item in rectangle and relatively thin boxes for easier transportation and staking. On the one hand, flat-packs occupy less space, on the other — protect the items from damages during transportation. Its second shop will open Sept. The store has 73 displays, mostly 4. A few Scandinavian touches are included.
Near the exit is a bistro that sells yen hot dogs and a Swedish food market with such goodies as Daim chocolate, fish roe paste and lingonberry jam. Last year, million customers visited IKEA shops worldwide, with the firm racking up total sales of Many industry observers say IKEA owes its success to efficiency. Kullberg said cost efficiency is also a priority of management. Kamprad, for example, flies economy class and uses public transportation during business trips.
The result is furniture sold at startlingly low prices by Japanese standards. Tables start at 1, yen; an entire living room suite complete with with TV stand, sofa, bookshelf, rocking chair and coffee table can be had for as little as 85, yen. Tonegawa added that all the furniture sold at his store is tailored to match Japanese people and housing. Giulia Palma. A short summary of this paper.
Download PDF. Translate PDF. Story of Failure Ikea is a furniture retail company established in in Sweden. Nowadays, Ikea is the largest furniture retail company that is presented in 44 countries. In Ikea entered in the Japan market. We could ask: why Japan? After the Second World War Japan was the largest market in the world. But in it had to withdraw their store out of Japan because of difficulties. In Ikea reentered the Japanese market and have been successful after that. One of the most characteristic features of IKEA is "Assemble Yourself" philosophy which reduces costs and results in low prices.
We do our part, you do yours. Together we save money. When they entered to Japanese market in , they have only been in 4 other European countries yet. This was their first attempt outside Europe and although they lacked experience, they were quite sure that IKEA's unique philosophy would work well everywhere.
They didn't think that any deep consumer insight would be necessary. They opened a relatively small shop in Tokyo without changing their standardized product range and applying the same strategy such as "Assemble Yourself" as in Europe.
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