Supply Chain Management and Ikea

The services and products offered by IKEA provide value to its customers in various ways. For one, the products and services are very affordable. The products and services are not priced highly and therefore, the average customer can enjoy them. At the same time, the products are of high quality. From IKEA’s slogan “low prices but not at any price”, it is clear that the company prices its products lowly but that does not mean that the quality is compromised. IKEA satisfying its customer’s needs through providing them value for their money as they provide quality products that will last for a long time, and at affordable costs. The fact that the company has set the minimum acceptable standards for its wood, implies that it is also keen on quality and on the environmental impact of its action of making furniture ( Edvardsson, Enquist & Hay, 2006).

IKEA is known as the biggest furniture company in all over the world. The specialization of IKEA is

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:

The high level of customer involvement is one of the key features of the IKEA concept. With their unique self-serviced warehouses, customers are required to collect their flat-packed items before proceeding to checkout. Customers are also involved in the assembly of their purchases after transporting them home in their private car. Because the company’s furniture are designed to be shipped disassembled and sold to the customer flat-packaged boxes IKEA saves a lot on shipping costs. As one of the company’s mantras said; “We don’t want to pay to ship air”.

Low prices are the cornerstone of the IKEA vision, business idea and notion. The basic thinking behind all IKEA products is that low prices make well-designed, functional home furnishings available to everyone. After all, our vision is to create a better everyday life for the many

In the beginning, IKEA like NOKIA Company before it became famous for producing hand phones; IKEA only sell small items like food containers, watches, pen, picture frame and many kinds when they decided to become an international business. Only in the year 1955 IKEA began to manufacture their own furniture and the design are very interesting for their customer 's eye view and the satisfaction for using the product made the company popular (http://en.wikipedia.org/wiki/IKEA).

IKEA transformed from a small mail order Swedish company into a global powerhouse by the modernized approach to shopping of self service and modularized to-be-assembled packaging.

The stores have restaurant, childcare facilities and plenty of parking. Customers can drop off their kids at the playroom and have delicious meal when they are tired. All of these not only provide customer with a comfortable shopping environment but also let them make an ‘IKEA trip’ and enjoy the fun of buying. Besides, IKEA’s distinctive show rooms help creating differentiation. Products are strategically placed in different small spaces like rooms which allow customers imaging this furniture in their own home. This makes everything looks more attractive.

The IKEA group sells quality furniture at a low price, to maintain a strong competitor. For that, the company has to try to cut cost without losing quality in the products that it sells.

Ikea's mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that as many people as possible can afford to buy them (www.ikea.com)

“The IKEA vision is to create a better everyday life for many people. We make this possible by 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 transformation process is complex and varies according to the product. With a range of 12000 products that is under constant retail evolution, the most cost saving activity is production. IKEA looks for the value chain through economies of scale and the existing production capacity with the aim of running every production line at maximum efficiency. The BILLY bookcase undergoes a very technology intensive transformation process in comparison to their upholstered furniture like the EKTORP sofa.

IKEA’s BUSINESS IDEA (www.ikea.com): “We shall offer 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 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,

IKEA is a multinational group of companies, popular for its design and marketing of ready to assemble furniture, appliances and home accessories. It was established by Ingvar Kamprad in 1943 in Sweden. IKEA has derived its name from the initials of Ingvar Kamrad, Elmtaryd (farm where he was raised up) and Agunnaryd (his birthplace in South Sweden). Since January 2008, it is world’s biggest furniture retailer. IKEA owns and operates 325 stores in different regions of the world and is well-known for its architectural eco-friendly designs, diversity in appliances and furniture (Inter IKEA System BV, 2009). It has become one of the world’s largest home furnishing retailers (Jonson, 2008) & has been ranked 44th in 2002 among top brands beating big brand