In the editorial a while ago I spoke about establishing companies abroad. In this article we’re going to take a little look on what happened when IKEA decided to enter the U.S. market in 1985.

As we all know, Americans like to think big. This was what IKEA where about to find out. When IKEA established in the US they soon noticed that some of their furniture simply where too small to fit the American lifestyle. In some cases, European products seriously conflicted with American tastes and performances. For example, IKEA did not sell matching bedroom suites that customers wanted and kitchen cupboards were too narrow for the large dinner plates. Some Americans were even buying IKEA´s flower vases for glasses! Adaptations had to be made. IKEA managers adjusted chest drawers to be an inch or two deeper because customers wanted to store sweaters in them. Sales of chests increased immediately by 40%. In all, IKEA has redesigned approximately a fifth of its product range to fit into the North American market.

Today, 45% of the furniture in the stores in North America is produced locally, up from 15% in the early 1990s. In addition to not having to pay expensive freight costs from Europe, this has also helped in cut stock-outs. And because Americans hate standing in lines, store layouts have been changed to accommodate new cash registers. IKEA offers more generous return policy in North America than in Europe, as well as next-day delivery service.

IKEA´s adaptation has not meant destroying its original formula. Their approach is still to market the streamlined and contemporary Scandinavian design to North America by carrying a universally accepted product range but with a mind on product lines and features that appeal to local preferences. The North American experience has caused the company to start remixing its formula elsewhere as well. So the motto was: “Think global, act local”. Only because IKEA changed its product strategy and therefore met the domestic demands, IKEA was able to survive on the US market.