Essay On IKEA

The philosophy states “ Our vision is to create a better everyday life for the many people. Our business idea is to offer a wide range of well-designed, functional, home furnishing products at prices so low that as many people as possible can afford them.” IKEA needs to create products following this motto but have these products molded to the tastes and styles of the U.S. population. The prices must still be low but IKEA must force the message that even though the price is low that does not mean the quality of the product is poor. This message will be key for expansion in the U.S. to be a success. IKEA must maintain their shopping experience as that is a strong competitive advantage, and tweak their philosophy so it fits the American lifestyle. If they do this then they will have success in expansion.

IKEA stores have been present in five big areas in the world which are North America, South America, Europe, Russia, Asia and Australia as of 31 December, 2014. IKEA group have stores located in 42 countries which include Australia, China, Taiwan, Malaysia, Singapore, Denmark, France, Germany and etc. IKEA group sell their products in to these 42 countries with their domestic currencies such as Australian Dollar (AUD), Yuan (RMB), Taiwan New Dollar (TWD), Malaysian Ringgit (MYR), Singapore Dollar (SGD), Danish Krone (DKK), Euro (EUR) and etc. The reason of using domestic currency is because this is easier for the customers to buy IKEA products in their country.

Expanded from Sweden to asia, and now they are recognised worldwide with 314 IKEA( Refer to figure 1.7) stores in 38 countries/territories. This help to boosts sales, gains more recognition and builds better reputation which leads to the significant increase number of customers.

This report analyses IKEA’s issues, drawbacks and its implications in the global market. Along with reasons behind the furniture giant’s pitfalls, presented are a few solutions to overcome these drawbacks.

Lastly, there is always an in-store logistics in every IKEA store to oversee the overall operation of IKEA.

IKEA is privately owned international home product retailer that sells furniture accessories and kitchen item in their retail stores around the world. The company which took the initiative furniture at affordable and cheap prices, is now the world’s largest furniture retailer.

Ikea was successful in entering the furniture retail market in Sweden because it capitalized on good timing and original ideas. At the time of Ikeas initial phases, furniture prices in Sweden rose 41% faster than other household goods between 1935 and 1946. Ingvar Kamprad, the founder of Ikea Saw this as a great opportunity to offer quality furniture at a much lower price than other retailers, that the majority of people can actually afford. Ikea was also able to overcome adversity through creativity in business processes. When initially traditional retailers fought against Ikea’s ideas and banned them from selling at the Stockholm Trade Fair, the took orders or got names of customers in order to sell to them after the event. On another occasion, they overcame trouble with the retail cartel by establishing manufacturing sources in Poland instead of Sweden. This actually resulted in lower costs for Ikea and therefore allowed them to sell products at even lower prices than before. They also differentiated themselves from other companies not only through price but also through store design and location. Instead of locating in downtown hubs, Ikea set up its stores in areas with a lot of land to provide ample parking space which went hand in hand with their concept of cash-and-carry retailing. Furthermore, within the stores established many basic practices, such as wide

IKEA is the world’s largest furniture manufacturer who offers a wide range of well-designed, functional home furnishing products at a low price that many people can afford it. IKEA’s mission statement describes the purpose and distinctive advantages of the company clearly. (See appendices Ⅰ) It can also motivate management by saying ‘create a better everyday life for people’ because employees need work together to achieve this goal.

IKEA generates 79% of its sales in Europe, 15% in North America and only 6%

IKEA mission is to offer consumers good value for their money. The typical IKEA customer is young low to middle income family. IKEA success in the retail industry can be attributed to its vast experience in the

The overall objective of inter IKEA group is to secure successive and improvement and a long life of the IKEA idea. That will

Despite the recession IKEA (2011) managed to increase sales 7.7%, to 23.1 billion EURO. IKEA’s (2011) mission to keep prices low gave it the ability to

The author believes that we as customers become part of Ikea because we have to participate in the process. Ikea thinks it is good for us if we learn to build our furniture by collecting them from the warehouse, haul it onto the car roof or boot and take it home, all by ourselves. This participation means we belong more to the Ikea brand than any other brands in our lives. We indirectly became part of Ikea’s brand and business model and we are one of the reasons its prices are kept low and lower. In a way, this is one of the key ideas behind Ikea and this is why it is different from other furniture retailers. This is an innovation that Ikea owns and this is what differentiates it from the competition.

IKEA’s strategy towards its suppliers is that of a low production costs strategy. IKEA wants to sell its products at the lowest possible price therefore their

IKEA is one of the largest European home furnishing retailers established in 1943. It has more than 300 stores in 37 countries with a business turnover of approx. 22,7 billion Euros in 2009 and an approximate direct workforce of 127,800 employees all over the world. IKEA’s retail concept is based on selling well designed products at low prices so that maximum people can afford them and live a better life.