Ikea Invades America

* IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring

IKEA is considered to be a low cost, high quality producer in the furniture industry, therefore it is important to

IKEA provides vast variety of home products from furniture, bed, tables, chairs, to home decoration, and kitchen accessories. At the heart of the IKEA strategy was its product range which founder of the company Ingvar Kampard called “Our Identity”(Bartlett, Nanda 1996). IKEA is recognized world-wide for its innovative approach toward business and stylish designs. The company has used innovation for cost leadership. “Almost all IKEA products are designed for flat packaging, which reduces shipping costs, minimizes transport damage,

IKEA has marketed its products well and has dealt with all the problems easily. But there have been some constraints that came in the way of IKEA and alternative strategies have to be developed for them. These strategies are as follows:

Since its 1943 establishing in Sweden by Ingvar Kamprad at 17 years old years, IKEA has offered home furniture and frill of good outline and capacity at low costs so most of the general population can manage the cost of them. IKEA 's vision is to: "Make a superior regular life for the numerous individuals" Its business thought is "To offer an extensive variety of all-around outlined, practical home outfitting items at costs so low that whatever number individuals as could be expected under the circumstances will have the capacity to bear the cost of them"(IKEA 2004)

IKEA is a cosmopolitan group of establishments that designs and sells ready to accumulate furniture such as beds, chair and desks, appliances, small motor vehicles and home accessories. As of January 2008, it is the world’s largest furniture trader. Originated in Sweden in 1943 by the 17 years old Ingvar Kamprad, who was enumerated as one of the world’s richest society in 2013, the company’s name IKEA is an abbreviation that contains of the initials of Ingvar Kamprad, Elmtaryd the farm where he raised up, and Agunnaryd his hometown in Smaland, South Sweden.

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

IKEA is a worldwide expanded company. They enlarge their showrooms to North America, Europe, Australia and Asia. Customers can check out IKEA’s product in the show rooms and also by checking out IKEA’s websites to get their selected products to be home delivered. This is an effective way of selling their products as customers who are busy with their own work can purchase their preferred products online whenever they want to. Thus, this is an advantage for both customers and IKEA’s company as their sales doesn’t stop at the showroom itself.

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.

IKEA is the largest furniture retailer around the world. The current leadership position of the company provides considerable advantages in terms of the economies of scale and at the same time creating an entry barrier for new competitors. It is ready to achieve the target of EUR 50 billion annual sales by 2020.

Based in Denmark, IKEA International A/S is one of the world 's top retailers of furniture, home furnishings, and housewares. The company designs its own items, and sells them in the more than 140 IKEA stores that are spread throughout approximately 30 different countries worldwide. The company also peddles its merchandise through mail-order, distributing its thick catalogs once a year in the areas surrounding its store locations. IKEA is characterized by its efforts to offer high-quality items at low prices. To save money for itself and its customers, the company buys items in bulk, ships and stores items unassembled using flat packaging, and has customers assemble many items on their own at home. The company is owned by

A. Several factors take part in IKEA’s success. The fact that the products are not manufactured in just one location, rather in different places around the globe, has a big impact. The products are matched with manufacturers who already assemble the same or similar items, so less time and money has to be spent to train the workers. Also because of this, other cultures are able to relate to the products, where as if everything was made in Sweden, they may not. The contracts made with manufacturers in exchange for support from IKEA enables the manufacturers to produce products at a lower cost. Also, the manufacturers being located globally and IKEA having several distribution centers that are located in various countries reduces the transportation costs to get the products to the store or consumers. Because of these, IKEA has been successful with a standard line of products as the costs to produce more extensive designs would cost more to

IKEA is a globally known home outfitting retailer. It has developed quickly since it was established in 1943. Today it is the world 's biggest furniture retailer, perceived for its Scandinavian style. The greater part of IKEA 's furniture is level pack, prepared to be gathered by the shopper. This permits a lessening in expenses and bundling. IKEA conveys a scope of 9,500 items, including home furniture and embellishments. This wide range is accessible in all IKEA stores and clients can arrange a great part of the range online through IKEA 's site.

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 established itself as the largest furniture retailer in Sweden by the early 1970s by reinventing the wheel of furniture manufacturing at that time. Majority of furniture manufacturers in Sweden produced expensive products with designs that were basic or passed down generation to generation, additionally other manufacturers stores where located in downtown congested areas. IKEA’s strategies which consisted of low cost low priced furniture, brave intricate designs, self-assembly,