IKEA Case Study

IKEA was founded in Sweden in 1943 by Ingvar Kamprad. IKEA is a home furnishings retailer unlike any other. It was founded on the basis of low cost and it offers modern and stylish furniture for all types of people at affordable prices. IKEA’s unique way of shopping, store layout, and do-it-yourself approach continues to help maintain their popularity.

IKEA is a company promoting social values and paying close attention to the work atmosphere in order to encourage its employees to develop their talents and skills.

This paper aims to demonstrate a detailed description of the elements of ‘IKEA’ company based on its famous name in the furniture industry.

IKEA’s social responsibility and sustainability is continuing to grow and progress according to Chief Sustainability Officer, Steve Howard. IKEA wants their business to have a positive impact on the world so they have implemented a strategy called the People & Planet Positive strategy which focuses on 3 areas (IKEA Group, 2014). The first area of focus is to get customers on board with living a more sustainable life at home

IKEA is one of the largest multinational companies in the world dealing with several products. The company sells and designs furniture appliances and home accessories at an affordable price. Ikea has over three hundred stores worldwide enjoying the good name it has created for itself. While they are one of the most profitable furniture companies in the world there are significant challenges and threats that have been overcome and are still needed to be tackled.

IKEA had to start designing more of its furniture in house and found a manufacturer who would produce IKEA-designed furniture. In this process, the manufacturer was in Poland where they found it is 50% cheaper than to manufacture in Sweden, allowing him to cut prices even more. Here the furniture industry continued to evolve with new technology and cost savings.

Manufacturing is not one of IKEA’s core competencies and therefore outsourced to countries with low factor costs.

Political factors increasing protectionism and globalization, presents a challenge as well as a chance to IKEA. The challenge will to done against unknown powers and to search the best fabric viable goods from world over. IKEA can enter the markets of emerging firm through combine ventures or buddies to explore to these new markets. AT the same time, the company has to be alert that countries may force high impost on products imported in an essay. However, IKEA may stand to reduce its fees as governments start to reduce taxes or supply subsidies to help trades stay afloat in this economic

Looking into the sourcing of a multinational company is very important as we would know risks of investing on that company well. Inter IKEA Holding S.A. is a fully owned by Interogo Foundation in Netherland, which is an enterprise foundation registered under Liechtenstein law. It has no listed their shares on any market in world, the company elaborates that, they wish to create ownership structure that stands independence and long-term approach. Their profit will only be reinvested into IKEA Foundation for charitable purposes and keeping purpose for future investment. As a result, they used Euro (€) as their main currency.

The concept of IKEA today with catalogue marketing combined with a showroom where customers could see and touch IKEA products started in the 1950s. This concept indeed attract consumer even though some consumer tends to take picture instead of experiencing and purchase. The company's three distinct features were function, quality, and low price. IKEA turned a capacity problem into a new way of

A different approach about Ikea’s success is given by Sara Kristofferson in her book Designed by Ikea, London 2014. In the first chapter, Kristofferson refers to the relationship between the swedish goverment and Ikea.

IKEAs brand strength is as a result of its high quality products at a low cost. IKEA not only offers furniture but also furnishings and appliances for homes and business offices. The company has also introduced home building materials where customers can use reasonable priced and environmental friendly materials to build their IKEA home. The worldwide market presence and strong brand image and reputation have contributed to its hold on customers and market share.

Products related to home furniture, like complements. Benefit from brand awareness. Bargain power of suppliers is relatively low. Many suppliers in the market. High rivalry to establish

And by offering the right products at the right prices we will help our customers live a more sustainable life at home. IKEA has an important role to play in terms of taking responsibility for people and the environment. This is why sustainability is one of four cornerstones in the new Group strategy “Growing IKEA – together”. We have a strong foundation to build on – it is in our culture to twist and turn established truths to find a new angle, a new idea, and to have the courage to try to do things differently. IKEA is obsessed with making more from less, and we hate to waste resources of any kind. This will continue to be our compass in years to come, and we will stimulate new thinking and innovation in our sustainability work. Innovation is needed to build sustainable solutions into the IKEA range and to tackle some of the global challenges society faces. We need to identify and use more resource efficient materials and develop better solutions for reusing and recycling IKEA products once our customers no longer want them. I believe IKEA together with our customers, co-workers, suppliers and the rest of society can make a big difference. The 50 million low-energy bulbs purchased at IKEA in the past three years represent energy savings equivalent to the output of four and a half nuclear plants, and substantial reductions of carbon dioxide emissions. This gives just a hint of the potential that lies in the word “together”!

In 1995, IKEA met a problem that its main supplier, Indian rugs, used the child labor to produce products, although they had signed an attachment of the contract to ban employing child labor. In addition, a German documentary maker was about to broadcast the problem of child labor on German television and also invited an employee from IKEA to have a live discussion in the TV program. Marianne Barner, the leader of IKEA, must find a great solution to this serious issue to both save her business and the corporation’s brand image. In this issue, IKEA was not the one who produced products, so they might not realize the use of child labor in the process of production. In addition, child labor