Ikea's Supply Chain Management

IKEA’s main competitive advantage derives from low costs, which in part are achieved due to standardized products (JUREVICIUS, Ovidijus, 2013). IKEA has been setting up many new stores in different countries all over the world. While most purchases are still done in the European market (59%), the Asian market has expanded quickly (currently 35%) (IKEA, 2014). This expanded market, caused by growing wealth in Asia, created the option to lower costs even more due to economies of scale. The ability to keep selling standardized products however is decreasing quickly with this expansion of the company. IKEA has experienced first-hand that cultures differ too much to keep the old system of ‘one-size-fits-all’

This will keep driving their costs down, therefore increase their profits and reduce their price that will most likely increase their market share. But most importantly, since IKEA, will have some kind of implementation in these markets, it will be easier for them in terms of sourcing raw materials and manufacturing the products. It will ease the logistic, make it even more efficient thought their network of storage facilities throughout the world.

In order to assess and give recommendations to IKEA, it is important to fully understand the operations and the values that drive the company, ant its philosophy. Since was founded in 1954 by Ingvar Kamprad the Swedish company’s vision of “creating a better life for the many people” inspired them to develop high quality and lower cost products in the furniture business, and almost a decade later, after they consolidate in the Swedish market, they made the decision to expand abroad opening stores in Northway and Denmark respectively (Exhibit 1). With a relatively rapid expansion the company needed to transmit their unique philosophy and created the testament of a furniture Dealer and trained ambassadors to help spread and secure the firm’s values (Exhibit 3). Furthermore, IKEA’s adopted another principle, the company preferred to focus on establish close ties with business partners and supporting their suppliers in a long-term relationship rather than just

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

IKEA implements new product service design and development to offer their quality products at a cheaper price to suit people’s contemporary needs and circumstances. They focus on the price and quality, design and function, environment and health of their new product service design and development to minimize waste and

Ikea has established strong branding with wide range of stylish products. It focus on offering low-priced and affordable furniture. The furniture is easy to assemble and ship. It offers one-stop shopping and featured the amenities as playrooms for children and Swedish cafes, bank and enough parking spaces. It creates a friendly atmosphere and services to shop and design the store layout for a nice journey of shopping. It has strong global sourcing capabilities.

This report analyses IKEA’s issues, drawbacks and its implications in the global market. Along with reasons behind the furniture giant’s pitfalls, presented are a few solutions to overcome these drawbacks.

Established in Sweden in 1943, by a 17-year-old Ingvar Kamprad, IKEA is a multinational group of companies that focus on ready-to-assemble furniture, appliances, and home accessories. The very first IKEA store named Möbel-IKÉA, opened in Almhult, Smaland(Möbel means “furniture” in Swedish), to currently, September 2016, have 389 stores in 48 different countries. With the 389 stores, IKEA successfully creating over €30 billion and over €3.5 billion net profit with the continuous development and expansion.

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.

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.

Operations management is not only important for IKEA, but this is important forco most companies. And this is important for IKEA because the company aims to reduce wastages, increase productivity, time, and resources management in order to make sure that the production cost is low and at the stores the company aims to make sure that their warehouse is utilised properly, customers are explained the details and finally the product is delivered without issues so that the shifting cost is low. So this indicates that there will be set of operations irrespective of what field a business is in and at the end of the day successfull businesses are those which manage their operations effectively and efficiently. Besides, the firm relies significantly on its supply chain, which entails a range of processes from raw materials acquisition to the delivery of their products to their costumers. The key operational processes from raw materials acquisition to the delivery of their products to their costumers. The key operational processes are managed and controlled at the firm’s head quarters in Almhult, Sweden. Nevertheless, there are some operational problems that have been reported at the organization including costumers’ frustations because of overcrowding in its retails stores and product availability and wait times. Some of the measures that Ikea has implemented to address these operational problems include establishment of checkouts for costumers with small items and increasing the

The concept of IKEA today with catalogue marketing combined with a showroom where customers could see and touch IKEA products started in the 1950s. This concept indeed attract consumer even though some consumer tends to take picture instead of experiencing and purchase. The company's three distinct features were function, quality, and low price. IKEA turned a capacity problem into a new way of

IKEA's strategy is derived from environmental conditions; the Swedish company's understanding before customers want functional furniture, the attractive and modern design, and affordable, with immediate availability. The furniture has lost its status as a heritage object, to become a universal object of consumption.

IKEA, founded in 1943 by Ingvar Kamprad, has a vision “to create a better everyday life for the many people”. With its business idea of “offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”, IKEA’s operational processes continues to focus on creating quality products and services at low costs as well as environment sustainability. (IKEA, 2016) More than being a furniture merchant, IKEA sells a brand that is easily recognizable, chic, stylish, minimalist and modern. It believes that everyone will leave IKEA store with something they like, be it the products or services. Its success is evident internationally where there are more than 300 stores in 35 countries. (Freden, 2015) The case study will

IKEA is one of the most successful manufacturing and retail furniture companies operating in today’s global marketplace. IKEA manufacture from the bottom up, top down furniture that offers environmentally friendly, state of the art designed furniture that is both affordable and attractive to its customers via their online, catalogue and worldwide distribution channels, with a logistics network that are low cost footprints with the enforces on cost efficiencies couple with technology, product design, excellence and customer satisfaction. IKEA was founded by Ingvar Kamprad in a small village in Sweden. Its Scandinavian–style home furniture offer attractive designs at affordable prices. And IKEA is obtainable from 275 stores