Case Study The KEA Group

KEA is a major competitor in the home furnishing and home goods operations with operations in more than 30 countries. KEA unique brand identity is its unassembled products that require consumer assembling. The KEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in the US. To become one of the leading furniture retailers In such huge and promising market, It has set an ambitious goal to have 50 stores around the US by 2013.

KEA has 4 branches in Los Angels alone. From 1997 to 2001, the revenues of KEA doubled room $66 million to $1. 7 billion in five years. Looking at the growth rate over the past decade, It seems possible for KEA to reach this goal. However, KEA faced several challenges: American’s mind-set, rivalry from established furniture retailer and different customer’s preference.

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To address to these challenges, KEA needs to apply market leader strategy expanding total market size, defending and developing its market share to achieve this goal and should focus on Individual market development rather mass market development. One of KEAS long-term advantages s its brand.

To many consumers, KEA means low-priced furniture, Scandinavian design and style, shopping convenience. Kike’s cheap furniture does not make consumers feel cheap but rather beautiful, convenient and well-designed. KEA has a unique shopping culture that makes consumers feel a “real Scandinavian design and style” when they shop.

Thus, brand awareness gives KEA a great power in the US market. However, Kike’s motto is “low price with meaning”. “With meaning” for US market Is deferent from the other markets. If KEA cannot capture what US customers ant, Its offerings will become “low price and no meaning”.

KEA already listens to US customers’ needs but it should focus more on local market point of view.

ISSUES Americans’ attitude towards furniture’s durability Americans typically have a different attitude towards furniture’s durability, they want it to long last whereas KEA does not include durability in its products, it includes style and innovation. Consumer needs and Preferences KEA is lacking in market research area before launchings and openings of new stores. Another problem is that an KEA face in America is deferent consumer references and needs.

KEA originated in the Scandinavia has to modify its products to cult America’s furniture market. Limited Furniture Designs KEA had limited furniture designs which could obviously not cater to a wide range of customer needs and preferences. Whole package should be good and competitive In order to be competitive, KEA not only has to be cost effective and has to offer a I OFF good product out also NAS to come up Walt value AAA services, sun as Tree delivery and credit services, and innovative designs that the whole product package should be a good buy.

RECOMMENDATIONS: Durability Although KEA has worked hard to change the mindset of Americans of using their furniture for lifetime, still not Americans are willing to think the other way. So KEA needs to work on increasing the durability while not compromising on the price factor. This can be done by find the right combination of price, quality, functionality and design. Meeting the needs of the American market: If KEA wants to have 50 stores in US by 2013, it should work to cater the needs of a wider range of consumers.

Earlier it had problems as its beds and kitchen cabinets id not fit American sheets and appliances, product dimensions was in centimeters rather than in inches etc.

So it had to alter them after it started receiving complaints. Since the market is highly fragmented, its highly competitive so it needs to be very efficient in this regard. Because their furniture needs to be altered to meet the needs of the American market, it should conduct surveys etc. Before coming up with a product so that the particular product is in line with American customers, needs and preferences.

Focus on individual market development: The KEA should focus on individual market development rather mass market development. This could help KEA in making more consumers and prevalent acceptance all over the world.

Balance between designs: As KEA is focusing on a larger market, it should come up with different designs with more variety as not everyone is in love with the traditional Scandinavian designs. According to KEA Scandinavian design is what makes it unique. So it can not Just discontinue Scandinavian design but rather it should have some balance.

KEA should look for a balance between their Scandinavian designs and other traditional signs to cater the needs of a larger diversified American market. One stop solution: Apart from other things, KEA can promote in its advertisement campaigns a “one stop solution” for customers.

It can use its strength of availability of everything under one root to attract new customers as It looks Tort expansion In ten American market. Strengths * Strong Brand name * Cost efficient * Cheap and affordable prices * Wide range of furniture and related products with different styles.