Ikea Case Study

IKEA is rumored to be a very standardized retailer, i.e., a certain set of marketing strategies is used that are the same around the world. This indeed sets IKEA, operating on markets in Europe, US as well as Asia and Australia, apart among international retailers. Often the theoretical conclusions in international

Starting from the beginning of its global supply chain, IKEA emphasize on building a sustainable sourcing channel and socially responsible brand image.10 In 2015 IKEA has 978 suppliers in 50 countries, in addition to having a large number of suppliers; IKEA also buys raw materials from its own industrial group. It is not easy to manage the production process and products quality of such a large number of suppliers scattered around the globe. The rationale of IKEA managing the relationships with its suppliers lies in the company business idea and

Ikea, originating from Sweden was started out by Ingvar Kamprad by first selling daily used items and home accessories in the 1940s, over the years it has now evolved to being an established home furnishing company that “designs and retails its own ready-to-assemble furniture, appliances and home accessories”.

Ikea is a multinational group of companies operating on a global scale in the furniture industry, offering a wide range of ready to assemble (Do It Yourself) furniture, appliances, and accessories worldwide. The company is well known and recognized for its modern designs, functionality of their products, quality services, and their eco-friendliness. Within the competitive market, Ikea aims at being better than its competitors in the market, and offers the best standards of services to its customers, as well as a wider range of products for low prices.

First thing been identified about IKEA is that it is not just a furniture trader but provides solutions to lot of people for an affordable price. Here the affordable price does not mean low quality product but it originates lower cost products. So the first strategy in IKEA is the Overall Cost Leadership. They maintain their cost in a lower level without destroying to its quality. IKEA as a prominent furniture franchiser it faces for an enormous demand in every day. According to the volume they have hefty show room which has adjusted capacity distribution. Thus, they are sustaining a restaurant chain along with their store with their occupant and also cultural foods. They have used the strategy of Developing Complementary Services in managing their demand. IKEA started in Sweden but now it has blow-out to 40 countries with 330 stores. It is a comprehensive company it has expands the company to every country. IKEA been identified as Globalization Strategy and the influences they used in entering to these countries. Before they decide in entering to a country it conducts a research on the viability and sustainability of it. For an example they have once tried to enter to the New Zealand market but according to the investigation finding there will be an enormous traffic jam in Auckland if they open a store so they give up the idea. As the conclusion of the strategies of IKEA they used 3 main strategies to become successful in shorter time period. They are; Overall Cost Leadership Developing Complementary Services Globalization Strategy – Franchiser – Multi Country

IKEA is a well-known global brand with hundreds of stores across the world. In order to improve performance, it must assess its external and competitive environment which will reveal the key opportunities to analyze there advantages and threats. IKEA responds to both internal and external issues in a proactive and dynamic manner by using its strengths and reducing its weaknesses. This helps IKEA to retain its strong identity in market. IKEA’s passion combines design, low prices, economical use of resources, and responsibility for people and the environment. IKEA believes that there is no compromise between doing good business and being a good business. It aims to go beyond

Ikea was founded in Älmhult, Sweden, in the year 1943 by Ingvar Kamprad. Despite being founded in Sweden, IKEA Group is headquartered in Leiden, Netherlands. Since 1982, Stichting INGKA Foundation, a foundation in the Netherlands, has owned the IKEA Group (8). Purpose for this is to fund charities through Stichting INGKA Foundation and then reinvest what they have earned back into IKEA Group(8). IKEA Group has about 290 stores worldwide in twenty-six different countries. Not all are owned by IKEA Group, some are ran by other franchises. IKEA is the largest furniture retailer in the world with an annual revenue of 35.1 billion Euros (3). They focus on the demand of their customers and have zeroed in on the factors that drive customers to purchase products (3). Their low prices and extensive selection of products that are simple to put together have propelled IKEA to the top of the furniture retail business. The culture and values of the company are inspired by Swedish society and Inhvar Kamprad , the founder(4). The culture of IKEA brings together IKEA employees in their goal to make life for people better. They share the same belief that many people should be able to customize and live in a home they dream (4). Swedish roots have shaped IKEA into a company that holds their values in high remarks, while employees strive to work hard, complete tough challenges, use common

The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in the US. Its unique business strategy has given it its strengths for its success today. However, like all strategies, IKEA’s strategy has its own flaws that can pose as weaknesses. IKEA also has a lot of opportunities in the marketplace such as expansions of their company and threats such as competitors in the same industry.

Its products are another differentiator that has contributed to Ikea’s success. The look and feel of the

1. IntroductionIKEA, the famous Swedish company, is the one of the largest furniture retailers in the world, which specializes in modern but inexpensive Scandinavian designed furniture. According to Echeat (2006), the IKEA had more than 175 stores spread over 31 countries at the end of 2002 and worldwide sales of about 12.8 billion euros in 2004. During the IKEA financial year 2001-2002, a total of 60,000 people are employed by IKEA worldwide and there are 323 million people visited IKEA stores around the world (Kronos, 2006).

Ikea have the product design, development, raw materials, processing, customer service five processes and sales flow. Ikea took control of the sales and product design of the two maximum links, at the same time ensuring service into the sales. Ikea has a comprehensive market survey that is conducted after every three years. The main purpose of the survey is to listen to the customer’s opinions regarding the products. Ikea strategy on reducing the cost is based on recycling raw materials to avoid deforestation. With the inception of the new technology, it has resorted to using composite plastics so as to reduce weight and save material with the purpose of increasing the rate of production. Ikea’s household products are split into assembly goods with products divided into separate designs and different modules. Ikea’s mode of marketing is to hold the psychology of the customer. Ikea does not introduce the

Ikea developed an interesting product strategy and product range. The company had a good idea to setup a council to effectively manage and oversee products the company carried. The company’s focus to study consumer spending with the competition, gave them insight on how to construct a better

The business concept of IKEA involves selling high volume of mostly furniture products in low prices. Moreover, “with an aim of lowering prices across its entire offering by an average of 2% to 3% each year, its signature feature is the flat packed product that customers assemble at home.

4. What is IKEA’s strategy toward suppliers? How important is this strategy to IKEA’s success?

In contemporary business environment which is highly effected by globalisation and urbanisation, it is interesting to see how IKEA which has been going through successful changes in the past and dominated furniture industry for decades based on its low prices and customer oriented services, to take action after realising the importance of e-commerce and the changing lifestyle in modern society. Thus, this essay is going to discuss from what kind of change and why it has been conducted in the past, its lasting impacts on the ways of change in current business practices, and the analysis of the circumstance for the changes.