Ikea Management Analysis

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.

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

IKEA is a global furniture retailer, which is established on the concept of contributing wide range of well designed, functional, and low cost home furnishing products in 40 countries, with 330 stores and 154,000 workers (The IKEA concept, 2012). IKEA was founded in 1943 by Ingvar Kampar and has turned in an international furniture retailer that specialized in stylish but inexpensive furniture designs.

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.

Supply Chain Management plays a vital role in our hospitals today. With the growing cost of healthcare and new technologies, it is vital for hospitals to run as efficiently as possible and without jeopardizing care. To the materials manager and to the financial minds of a hospital the area of supply chain is a tedius task at best, the kind of planning, strategizing and measuring that seldom goes recognized and rewarded. The work involved with inventory control fits tightly within that description.

Q1. Critically discuss the purpose and application of the following two models, and highlight the differences between them:

IKEA communicates these statements through its advertisement and encourages the customers to experience thee IKEA concept; we are building the IKEA brand. The IKEA brand is the sum total of the emotional and rational values that consumers associate with the IKEA trademark and the reputation of our company. The brand image is the result of over 50 years work by IKEA co-workers at all levels all over the world.

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 purpose of supply chain management is to supply an extreme rapid flow of superior quality relevant information that will allow suppliers to offer a continuous and accurately timed flow of materials to customers. However, unexpected demand variances, including those caused by stockouts, in the supply chain operations process create abnormalities which

IKEA has also used extensive manual work in its planning processes and the planning was based on fragmented and unreliable Planning information.

In PEST analysis, we will look into what will be affect by the business environment. It includes political environment, economical environment, social environment and technological environment.

With our large inventories, our inventory holding costs, insurance, and shrinkage from pilferage, obsolescence, and deterioration can be expensive. We need to plan so that we can minimize inventory and its associated costs while also meeting the needs of our customers and maintaining high customer satisfaction. We can do this by cycling inventory and reducing the lot size by only ordering less and reducing our carrying costs. We need to improve demand forecasts and cut lead times in order to reduce our safety stock inventory. With more accurate forecasts we can place orders closer to the time when they must be received and further cut our inventory holding costs. Another way to reduce safety stock is to reduce supply uncertainties. We must look at our suppliers and remove those that are not timely or those that have quality issues. Our company should look for alternative suppliers who

Environmental – With regards to the environmental factors such as the air, noise, and water, inspections are implemented to ensure the company provides corrective actions within the stipulated time. The environmental inspection is part of the legal documentation and environmental authorities as the business operations are on-goings and maintains the competence.

IKEA was founded in Sweden by Ingvar Kamprad in 1943. IKEA has been established around the world in 26 different countries. Within these countries IKEA has a total of 303 stores. This business is effective in adapting to change through the use of the four key business functions; operations, finance, marketing, and human resources.

The supply chain in a high-end store should be able to reach the balance between responsiveness and efficiency by maintaining customers demand stable even when the prices vary, keeping low inventory levels and exploiting economies of scale.