IKEA faced
challenges in differentiating against local competitors Mujirushi Ryohin (Muji) and Nitori who
were well-entrenched (numerous national stores), inexpensive (due to low-cost imports from
developing Asian countries) and popular local brands (especially among IKEA’s younger
generation target market) (Bloomberg, 2006). This mature and saturated market created
difficulties in attracting IKEA’s target customers (Jonsson, 2008). Japanese consumers were very
“quality oriented” and traditionally viewed high priced products as being of high quality
(Bloomberg, 2006; Jonsson, 2008). However, many Japanese customers are “in the process of
embracing the concept of value" (Bloomberg, 2006).