IKEA Business Case Study: How to Earn 40 Billion$ Every Year by Selling Furniture? (IKEA Effect)
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- Опубліковано 23 бер 2021
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VIDEO INTRODUCTION:
The “IKEA Effect”: When Labor Leads to Love
It is due to the IKEA effect that an individual perceives the value of self-made products (even though they might be amateurs) equivalent to that of products made by experts. When someone does labor to complete a task, they tend to love and value it more.
This can be understood by an example:
When instant cake mixes were introduced in the 1950’s as part of a broader trend to simplify the life of the American housewife by minimizing manual labor, housewives were initially resistant. These mixes made cooking too easy, making their labor and skill seem undervalued. They completed the task simply but did not value it because it involved almost zero labor.
To counter this, manufacturers changed the recipe and instead added one more step, now to complete the cake adding an egg in the mix was a mandatory step. This small change of introducing labor appeared to be a crucial move that lead to the sales of the cake mixes.
So if you want the magic of the IKEA effect to work you need 3 things
1. The task should not be too easy
2. The task needs to have labor
3. The task has to be completed successfully
More on this in the video, watch till the end and drop a comment if you liked it.
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#ikea #ikeaeffect #furniturestore Credits: CNN-News 18, WION, NBC News, Money control pro, Business standard, TV18,Business Today, ABC news, CNBC, ET now ,Bloomberg originals, Financial Times, DW documentary, AL Jazeera English, BBC news, Firstpost. Fair use - This video is for educational purposes only. All materials used in this video, including images, audio, and video clips, are the property of their respective owners and are used here under the doctrine of fair use. This video is intended to provide commentary, criticism, research, and education on the subject matter. We believe this constitutes a fair use of any such copyrighted material as provided for in Section 107 of the US Copyright Law.
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Best thing about this video is we not only get insights about IKEA, we get to know about General mills also
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Ikea is a supply chain management company. They concentrate more on their SCM and using their basements as warehouses is a sweet spot for their business.
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The best thing about IKEA is its icecream costing 10 rs
Most of Hyderabadis goes there 😂
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Ingvar Kamprad Elmtaryd Agunnaryd
Just love the way Ingvar Kamprad named his company I.K.E.A!
Also this DIY culture is missing in India, even for small tasks like drilling a hole to hang a photo frame or basic tasks people call a professional to do it, even now I see people calling a professional to assemble even basic IKEA furniture I hope this trend changes but then again the question of killing the poor persons job. I hope one day we can move forward when majority of people get decent work and put an end to "cheap labour" forcing people to adopt the DIY culture and invest in power tools to build stuff!
Absolutely 🌟✅
Labour is cheap in India. We can afford to do this. Western nations can't. A good plumber makes close to 100 dollars an hour in the US. They can make 200,000 usd and more a year. That's how much a decent lawyer or consultant makes.
@Chole Batura There are about 1.3 billion of us and that automatically makes labour cheap.
@Chole Batura dude pls don't argue without base. There's a lot of research work done on this. We are the second largest labour market in the world after china.
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Also even after excluding the non working citizens India's Human resources is much more than a lot western countries combined
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Firstly, the ease of supply chain management greatly reduces the company’s expenses enabling it to offer affordable furniture with top notch quality and secondly the customer engagement with schemes like DIY where in customer pours in a bit of effort to build something which they can be proud of later on and most importantly easy self shipping….man IKEA really gave a serious thought on the departments as well let alone the furniture
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Interesting case study btw
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Exactly, this idea of IKEA giving tasks to the customers is very successful , we have seen the same formula used by our PM like tali bajao thali bajao 💯💯🤣🤣
Always there will be idiots who brings their political views everywhere.
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I went to IKEA after 1 week of opening, it was awesome and window shopping with friends for 3 hours was a beautiful experience.
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Didn't knew why was ikea hyped.
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Billion dollar tip - Labour leads to love 😘
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I think the case study of IKEA mainly applies to the western countries as the concept of DIY in our nation is not consider a very good approach. The Indian thought behind such huge rush is due to brand value of the company rather the products. Kudos to your depth research.
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Mothers won't love their children as much if giving birth was so easy.
👀
Mothers are able to love even adopted kids more than some real mother's. Those pheromones are responsible for it it has little to do with the pain.
@iTs Messiah i dnt know what pain angelina jolie suffered from other than the choice of what level of comfort she should spoil herself with. she still loves her adopted kids the same because she is a good human being. Me feeling empathy nd care for a kitten stray alone on the road has little to fo with any personal pain nd more to do with empathy and pheromones that trick mothers into doing everything they can to protect their offspring.
In my opinion there is something like destiny, they believe that they have been blessed with the child
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Just my two cents. As someone from Sweden, I can say that the analogy with the cake mix is a bit flawed. The success of flatpack concept is more rooted in the Swedish culture more than tapping into the emotion. This is to be self sufficient in most aspects of life (compounded by the high wages for all kinds of labour). So Ikea did not make customers assemble furniture to provide them some kind of delight, its just an ordinary thing they expected people to be okay to do by themselves as long as Ikea provided a much cheaper offering. Supply chain management is of course one of the main cornerstones no doubt.
IKEA is so big you can literally get lose in the maze i couldn't find exit when i visited it 😂😂
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You need to make videos on decathlon. The successful brand who didn't even feel marketing is important. Their products were so amazing that all the marketing logic fails.
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The fact that I did not come to know why exactly people visited IKEA Hyderabad in such big numbers really makes me cringe hard
Hope IKEA opens a store in Chennai. Just noticed, there are no ads that interupt, nice. Try doing a video on Saravana stores, Tamilnadu
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Absolutely amazingly explained. Thank you
Logistics part reminds me of Apple reducing phone boxes which in turn can ship 2x units and make more profits.
(Increased profits )
(Efficient supply chain)
(Reducing e-waste) killer move👏🏻
It surely increases profits and supply chain efficiency for them but the whole carbon footprint burden is being transferred on to Amazon where people are going to buy chargers a lot and we all know how inefficient Amazon packaging is…So no need to make Ho Ho about e-waste because it is definitely going to increase because of this
What if people would not have figure out, how to assemble it? Then probably we would have watch this video as "The fall of IKEA!!"
That was once the case but then started improving their designs and now they are coming out with 5mins assembly furniture. Do check it out. It's super crazy level innovation 🌟
😂
By the way they can simply start a youtube channel and post the videos of the assembly of furniture
They are tied up with urbancompany now for such
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But don't you think that this storage and supply chain is only possible in US and other markets?
Not in india? But we Indians need "bana banaya furniture"? 😂
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Ganesh I have done bussiness case study on IKEA in my Masters, I am waiting for result, ur video is my main reference, thank u ganesh