IKEA: A Case Study Of Ikea

1970 Words8 Pages
INTRODUCTION
Most players in the furniture industry remain highly focused on their respective domestic markets. The localization of furniture has become a norm in most countries due to domestic preferences and demand for low cost. The king of the Swedish furniture industry decided to break the custom and decided to go global with IKEA.
Since its conception in 1943, IKEA has stuck to its initial objectives and has bound by it till date. The main objectives being:
• Low prices
• Produce economical and affordable products for consumers
• Better standard of life for people who can’t afford an expensive lifestyle
• Make sure they meet the customer’s every need and demand

FSA (COMPETITIVE ADVANTAGES)
IKEA is different from its rivals in the furniture
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They have integrated this concept in every business decision and global strategy, and have never strayed from the original objective of IKEA. The pioneer of IKEA’s concept was the standardized process of providing customers with disassembled furniture to be arranged at home also known as the ready-to-assemble kit. This helped increase storage and maintain large inventories at the store, which in turn eliminated warehousing costs and permitted the consumers to obtain ownership of their purchase on the same day itself. Involving customers in the value chain was a historic move by IKEA as it drastically reduced costs on every level. IKEA’s shoppers are half-consumers and half-producers because they have to self-assemble their purchases. Even though IKEA provides assistance, the customers prefer to order, carry and transport their own goods. The concept of flat packaging has further encouraged self-handling of purchases. It has also improvised storage capabilities and further reduced shipping costs. This new store model allowed IKEA to have its staff focus on boosting rapid movements of consumers and in store displays, rather than handling and delivering huge, bulky furniture items. The self-service strategy has become popular amongst the shoppers as well as IKEA’s competitive…show more content…
• IKEA has achieved success by offering customer value for functional designer products. The cost conscience attitude has worked in favor for IKEA amongst its target market.
• Flat packaging- easy to assemble and ship
• Flat organizational structure has led to fast decision making and less errors.
• All furnishing goods under one roof- one stop shop
• Cater to all age groups and amenities of store visitors. IKEA provides all necessary family services for instance, play areas for kids, restaurants, rest areas, these facilities enable people to spend all day in their stores.
• Even though IKEA produces on a wide scale and has standardized products in all its stores, they have continues to maintain a specialization and made-to-order to a certain extent.
WEAKNESS
• IKEA being a global brand is still very heavily reliant on its revenues from European countries as compared to international stores in USA, Asia and Middle East.
• Continuous need to maintain intense control on costs and quality while compromising on profit maximization.
• IKEA focuses on having few large stores, rather than making its presence known in multiple locations. As IKEA stores become larger they would have more value added services which lead to increase in operational

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