Ikea

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In the early 1970s, Kamprad stared to worry about what would happen if he died. He decided long ago that none of his sons would ever control the company. Although all three work as Ikea managers, Kamprad was worried that they either sell the company or they might squabble over control of the company, and thus destroy it. So Kamprad has created one of the most unusual corporate structures in the world. He transferred 100% of his Ikea equity to a Dutch-based charitable foundation---Stichting Ingka Foundation as an irrevocable gift in 1984. This is a tax-exempt, nonprofit legal entity that in turn owns owner of IKEA. The Stichting Ingka Foundation owns a private Dutch company, Ingka Holding, which in turn is the parent of almost every…show more content…
As a part of corporate structure, IKEA devotes considerable attention to finding the right supplier for each item. For example: the Klippan—the best –selling seat in IKEA. IKEA originally manufactured the product in Sweden, but then IKEA found that if they manufactured in Poland it will have the lower cost, so IKEA transferred production to lower cost supplier in Poland. IKEA then decided that it made more sense to work with suppliers in each of the company’s big markets to avoid the costs associated with shipping the product all over the world. IKEA prefers to locate complete value chains in selected countries, including raw materials, components, and finished products, although in some product areas, for example, solid wood furniture, this is not always possible because of the uneven global distribution of raw materials and the preferred locations of finished goods’ production. In 2008, almost two-thirds of IKEA’s global purchasing was in Europe, one-third in Asia, and 3% in America. The top countries included China (21%), Poland (17%), Italy (8%), Sweden (6%), and Germany (6%). As in many other industries, low production costs have contributed to increased purchasing from China, expanding from 14% of IKEA’s global sourcing in 2003. However, China’s increasing importance has recently stagnated due to rising production costs and longer lead times for finished products. Instead, IKEA has increased the share of products obtained from Europe, where Polish suppliers

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