Ikea Porter's 5 Forces

6535 WordsMar 27, 201127 Pages
Company History: 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…show more content…
One building, circular in shape, had four floors connected ingeniously so that customers could move easily from floor to floor. This building acted as the main display area for furniture. The second building consisted of three floors and a basement and acted as the stockroom and service unit, where there was also a selling area for smaller pieces of furniture and home furnishings. Customer services ranged from a baby carriage hire service, a children 's nursery, and a restaurant with seating for 350, to cloakrooms, toilets, a bank, and parking for 1,000 cars. More important than the physical characteristics of the new IKEA store was the manner in which it revolutionized furniture manufacturing and selling. Kamprad continued the practice of selling most furniture in flat-pack form, as he said, "to avoid transporting and storing air." To make this possible, the furniture was specially designed by IKEA staff in workshops in the Älmhult headquarters and warehouse. For the mass production of the component parts of the flat-pack furniture, Kamprad had to bypass traditional furniture manufacturers and instead use specialist factories. Unfinished pine shelving, for example, came directly from saw mills, cabinet doors were made in door factories, metal frames came from machine shops, and upholstery materials came directly from textile mills. Almost all of the components of each piece of furniture could be

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