ADM 4311 Lecture Notes - Lecture 3: Ikea, Swedish Krona

• School: University of Ottawa
• Department: Administration
• Course: ADM 4311
• Professor: Alan O' Sullivan

Document Summary

Consumers had pent-up needs which was not fulfilled in the market. At the time, there was a huge gap between what the incumbent retailers could supply, which was high end, high quality and expensive furniture, and what the majority customers in sweden could afford, which was inexpensive yet functional furniture. The industry structure was a dead-end; yet it was unwilling and refused to change itself. Ikea entered the industry and filled the gap. Ikea"s furniture lines actually served as a substitute for the traditional high quality and expensive sweden furniture. Ikea"s new business model and its unique lines of furniture facilitated and ensured its successful enter. Once established it position in sweden, ikea expanded to other scandinavia countries, such as swiss. Scandinavia countries" industry structure was very similar to sweden, with high end furniture satisfying limited population and majority people unable to afford high-end furniture unable to find inexpensive one to meet their needs.