...click on the "print" button in your browser to print this page. The IKEA Concept The IKEA Concept is founded on a low-price offer in home furnishings. Concept The IKEA Concept is based on 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. Rather than selling expensive home furnishings that only a few can buy, the IKEA Concept makes it possible to serve the many by providing low-priced products that contribute to helping more people live a better life at home. The IKEA Concept guides the way IKEA products are designed, manufactured, transported, sold and assembled. All of these factors contribute to transforming the IKEA Concept into a reality. How the IKEA Concept Began The IKEA Concept began when Ingvar Kamprad, an entrepreneur from the Småland province in southern Sweden, had an innovative idea. In Småland, although the soil is thin and poor, the people have a reputation for working hard, living frugally and making the most out of limited resources. So when Ingvar started his furniture business in the late 1940s, he applied the lessons he learned in Småland to the home furnishings market. Ingvar's innovative idea was to offer home furnishing products of good function and design at prices much lower than competitors by using simple cost-cutting solutions that did not affect the quality of products. Ingvar used every opportunity to reduce costs, and he scraped...
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...Ikea offers a wide range of products like furniture (e.g chairs, tables, bedroom sets, cabinets), appliances (taps and sinks), textile (mattress, rugs, towels) and food. According to general manager, Erik Donker Duyvis, Ikea products are made out of high quality materials (Bani, 1998, Jan 02). Besides being a store solely selling furniture, Ikea also offers a restaurant right in the heart of the store. Duyvis also mentioned that Ikea offers furniture and household goods at a reasonable price (Bani, 1998, Jan 02). So how does Ikea promote their products and services? Ikea has its official website which keeps customers up to date on their current and upcoming products. Besides that, Ikea also promotes its products on various social media platform like Facebook and Twitter. With the advance of technology, Ikea also has its own mobile application which is available for smart phone users (Ikea, n.d.). Ikea also promotes their products through their annual catalogues (Ikea, n.d). The employees in Ikea are helpful and friendly. They are well-trained in providing information for their customers and also help them in looking for products that they want. For example, every product in Ikea has its own code so employees can search for it on the computer and help customers locate the desired item. Ikea is also a company that values its employees by providing perks and benefits like health insurance and discount to them.(Ikea, n.d.) People recognize Ikea by its huge words displayed...
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...IKEA Analysis Report Your Name Argosy University IKEA’s Marketing IKEA has a unique perspective with the approach they use in marketing. The starting point begins with customers’ needs (IKEA, 2013). The focus is on local marketing versus mass marketing and competitors. This differentiates IKEA from other home good suppliers by anticipating what consumers are seeking and many times providing exactly they desire before they realize they need it. The marketing task is simple, “To build the IKEA brand and inspire people to come to the stores” (IKEA, 2013). The marketing mix is a combination of items that work together; it is often referred to as the four p’s in marketing. Price, Promotion, People, and Process are the four p’s that IKEA has embraced. Price is within their controls, they offer quality home goods at low affordable costs. They are able to keep costs low with designing from within, sourcing raw materials for production, and selling in their own stores. Promotion is achieved with iconic bold blue and yellow colors signifying a brand with value. IKEA uses many forms of media in their promotional marketing strategy; the annual catalogue is the most popular. The catalogue highlights many new home goods and accessories with interior suggestions that are attention grabbing and captivating. The catalogue has become a staple of what is new and trending in the homes of many customers. IKEA’s website is another interactive way it reaches a distinct local market, along...
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...IKEA was founded by Ingvar Kamprad. He was born in Småland in southern Sweden. In 1943, when Ingvar Kamprad was 17, he registered his company. The name IKEA is formed from his name’s initials (I- Ingvar & K- Kamprad) plus the first letters of Elmtaryd (E) & Agunnaryd (A), the farm and the village where he grew up. This IKEA originally sold typical general store goods. Five years later, in 1948, IKEA introduced furniture into the range. After 10 years, the first IKEA store on 6700 square meters was opened in Älmhult, Sweden. In 1963 IKEA’s first store outside Sweden opened in Oslo, Norway. 325 IKEA stores are located in more than 38 countries all over the world. IKEA supplies a broad range of home furnishing products in a great variety of styles. IKEA products are identified by single word names referring to places, rivers, and lakes in Scandinavia or common things in everyday life. Most of the names are of Swedish origin. IKEA stores are built usually very large with many displays inspired by realistic room settings or real-life homes. IKEA stores include also restaurants serving traditional Swedish food, grocery stores selling Swedish-made items and usually there is a play area named Småland for children from the age of 3 to 10. Low prices are the “cornerstone of the IKEA vision” and the most important thing for their business idea. The “flat-packs” are really useful to reduce labor-, shipping-, and storage costs. IKEA publishes an annual catalogue in 38 different...
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...IKEA Christopher A. Bartlett and Ashish Nanda With a 1988 turnover of 14.5 billion Swedish kronor (U.S. $1 SKr6 in 1988) and 75 outlets in 19 countries; IKEA had become the world's largest home furnishings retailer. As the company approached the 1990s, however, its managers faced a number of major challenges. Changes in demographics were causing some to question IKEA's historical product line policy. Others wondered if the company had not bitten off too much by attempting major new market entries simultaneously in two European countries (United Kingdom and Italy), the United States, and several Eastern bloc countries. Finally, there was widespread concern about the future of the company without its founder, strategic architect, and cultural guru, Ingvar Kamprad. IKEA BACKGROUND AND HISTORY In 1989, furniture retailing worldwide was a fragmented industry in which small manufacturers and distributors catered to the demands of their local markets. Consumer preferences varied by region, and there were few retailers whose operations extended beyond a single country. IKEA, however, had repeatedly bucked market trends and industry norms. Over three and a half decades, it had built a highly profitable worldwide network of furniture stores (see Exhibit 1). COMPANY ORIGINS IKEA is an acronym for the initials of the founder, Ingvar Kamprad, his farm Elmtaryd, and his county, Agunnaryd, in Smäland, South Sweden. In 1943, at the age of 17, Kamprad began his...
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...• Week 2 Mini Case: IKEA List IKEA’s external and internal challenges. Looking at IKEA’s challenges, which ones do you think pose the greatest threat? Why? How would you address the challenges? IKEA’s external challenges are mainly Target and K-Mart. Target has recently recruited top designers and launched a wide range of low priced furnishings. On the other hand, K-Mart has done much of the same thing and enrolled Martha Stewart to help with the design of its home furnishings. IKEA’s main internal challenge is since the company’s inception (1943) no strategic decisions have been made without Mr. Ingvar Kamprad, the founder. Since he has stepped down in 2013, his three sons have taken over leadership of IKEA. Another internal challenge has been that IKEA is privately held through a complicated network of foundations which creates constraints in accessing large sums of capital that is needed for rapid global expansion. Walmart entered a period of difficulties after Sam Walton stepped down. Do you anticipate IKEA having the same leadership transition challenges? Why or why not? In my opinion, any company that’s founder is involved from inception until he/she is not physically/mentally capable any longer and then transitions to different leadership will be problematic. When Mr. Kamprad stepped down from IKEA in 2013, his three sons took over leadership. More than likely, they will never value and commit to the company like their father did. Hopefully Mr. Kamprad...
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...10 Keys to IKEA's Low Prices Just how does IKEA manage to offer such consistently low prices? Many people think that it's because the furniture is made cheaply, which isn't exactly true. Read on to find out about some of IKEA's less obvious cost-saving strategies. 1 Recycling The Recovery Department (of which, the AS-IS room is part) is responsible for sorting and recycling all recyclable materials, including packaging broken down in-store as well as materials collected from customers at recycling donation bins where available. 2 AS-IS Products not suitable for sale at the full retail price (floor samples, returns, items damaged in shipment, etc.) are placed for sale in AS-IS, generating revenues that might otherwise be lost to waste. The Recovery department also recoups parts from damaged items, making spares available to customers who need them. 3 Waste Reduction IKEA's designers and engineers strive to reduce the amount of material used and wasted in production. Additionally, many waste products are then used to make new products, further reducing overall costs both to the pocketbook as well as to the environment. 4 Automatic selling Despite the showrooms showcasing IKEA furniture in real living arrangements (typically located upstairs), IKEA is a warehouse store designed to maximize customer self-sufficiency with minimal reliance on staff assistance. Cost savings stem from reduced wages, training costs and lower design, maintenance and outfitting...
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...Background IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds, chairs, desks, appliances and home accessories. The company is the world's largest furniture retailer1. Founded in Sweden in 1943 by Ingvar Kamprad, who later became one of the richest people in the world, 2 The Company is known for its modern architectural designs on various types of appliance and furniture, often associated with a simplified eco-friendly interior design3. In addition, the firm is known for the attention it gives to cost control, operational details and continuous product development, allowing it to lower its prices by an average of two to three percent over the decade to 2010, while continuing its global expansion.4 As of October 2011, IKEA has 332 stores in 38 countries. In fiscal year 2010, it sold $23.1 billion worth of goods, a 7.7 percent increase over 2009.5 On February 17, 2011, IKEA announced its plans for a wind farm in Dalarna County, Sweden, furthering the furniture giant's goal of running on 100 percent renewable energy.6 The IKEA website contains about 12,000 products and is the closest representation of the entire IKEA range. There were over 470 million visitors to the IKEA websites in the year from September 2007 to September 20087. IKEA is the world's third-largest consumer of wood, behind The Home Depot and Lowe's.8 Things were going so well for the company, that in 1973, the company's German executives...
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...Management IKEA Case Study Sharleen Suwaris-SUSND11 Sharleen Suwaris Executive Summary The following is an analysis of the IKEA case study found in the Strategic Management Text book. This analyses the strategies used by IKEA to gain competitive advantage in markets outside its original area. The report begins by providing a background into IKEA. It studies International Business Level Strategy and the three international corporate level strategies. The case study goes into informing its target market and pricing strategy, which is already discussed. This case study further says how different people in different parts of the world thinks about IKEA, how elegant their designs are and how affordable for them to purchase IKEA products. Some of IKEA’s main markets are in three of the fastest growing markets such as Russia, US and China. IKEA store bring out products such as furniture to small product like a scented candle. IKEA has over 1300 suppliers in about 53 countries. They further have 12 full time in- house designers with 80 free lancers and other production workers to identify the correct raw materials and produce products efficiently and cost effectively. Primarily, IKEA produced standardized products however; this international strategy did not work for one of its vital markets that is, US. Therefore, they had to emphasize on taking corrective actions. The report also analyses the entry methods used by IKEA and its sustainability. IKEA Case Study ...
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...Implementation | 06 | 9. Conclusion | 06 | Abstract The IKEA Group, one of the world’s top furniture retailers, has emerged as the fastest-growing furniture retailer in the US. To become one of the leading furniture retailers in such huge and promising market, it has set an ambitious goal to have 50 stores around the US by 2013. IKEA has 4 branches in Los Angeles alone. From 1997 to 2001, the revenues of IKEA doubled from $66 million to $1.27 billion in five years. Looking at the growth rate over the past decade, it seems possible for IKEA to reach this goal. However, IKEA faced several challenges: American’s mind-set, competition from established furniture retailer and different customer’s preference. To address to these challenges, IKEA needs to apply market leader strategy expanding total market size, defending and developing its market share to achieve this goal. . Thus, brand awareness gives IKEA a great power in the US market. However, IKEA’s motto is “low price with meaning”. “With meaning” for US market is different from the other markets. If IKEA cannot capture what US customers want, its offerings will become “low price and no meaning”. Introduction IKEA, the world’s largest furniture retailer was founded in 1943 by Kamprad. Its first showroom was opened in Almhult and for the first time the customers could see and touch their furnishings before ordering. By 2002, Ikea was the world’s most prominent furniture retailer. Though the company was...
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...1.The IKEA is famous for providing a vast range of home furnishing products to its customers across the globe. It manufacturers highly designed, modern, and functional furnishing items at a very low cost. The IKEA story begins in 1943 when founder Ingvar Kamprad is born in Småland in southern Sweden. He is raised on 'Elmtaryd', a farm near the small village of Agunnaryd. IKEA products are identified by single word names. Most of the names are Swedish in origin. Although there are some notable exceptions, most product names are based on a special naming system developed by IKEA. Ikea offers furniture, coffee tables, rattan furniture, bookshelves, media storage, doorknobs, Beds, wardrobes, hall furniture,Dining tables and chairs Bookcase ranges, Bathroom articles,Kitchens, Chairs, Fabrics, curtains, Garden furniture, Carpets Lighting, Curtain accessories, wall decoration, pictures and frames, clocks and so on. 2.The giant furniture superstore Ikea is known in many parts of the world. This is mainly due to the various stores that can be found in the different continents. Most of the different Ikea stores are currently found in Europe, Asia, Canada, Australia and the US. The Ikea chain of stores also has Ikea locations found in the Middle East as well as in Israel. These many different Ikea stores which are located in these different places has lots of products for the home at low prices. !3.Acronym consists of the first letters of the name and the names, titles of his...
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...1. What factors account for the success of IKEA? a. There are three main factors that account for its continual success in the furniture retailing industry: Scandinavian designs, cost efficiency, and product strategy i. Scandinavian heritage is showcased beautifully through IKEA’s simple yet unique designs. In the early years, IKEA’s designs were functional at best, ugly at worst (Moon, 2004). Now, due to a deliberate focus on adapting a more design aesthetic (Moon, 2004), consumers began appreciating IKEA’s furniture for the appeal instead of its functionality. Ingvar Kamprad’s Scandinavian culture is something that cannot be easily copied, as one must be from Scandinavia to fully embrace its aesthetic (Moon, 2004). Moreover, Ingvar was able to create relationships with local manufacturers in the forests close to his Scandinavian home (Moon, 2004). It was quite possible for IKEA’s success story to fall apart if not for the close proximity of those manufacturers in Scandinavia. Also, IKEA’s “Low price with meaning” slogan accelerated consumers to believe these designs were not cheaply made (Moon, 2004). And as Ingvar said, “Scandinavian design is what makes [IKEA] unique,” (Moon, 2004). ii. The most important factor in IKEA’s cost efficiency plan is its flat packaging. In 1956, IKEA began testing flat packaging for tables and legs (Moon, 2004). This obvious idea created more storage space, more items able to be shipped, reduced labor costs, and less...
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...Management Close-UP: IKEA IKEA innovative idea began by offering stylish functional furniture with good quality at lower prices in Småland, Sweden in 1943. The concept was presented by an entrepreneur Ingvar Kamprad. Since 1943, the company left behind its competitors in the furniture industry because of using the cost-cutting solution. Today, the IKEA trademark is known as a leader in retail home furniture and the brand is recognized globally. It has more than 235 stores and operates in more than 35 countries. The company’s long-term direction or strategic vision is to “create a better everyday life for the many people”. The factors such as strategic well-organized planning, innovative ideas, competence in furniture market, orientation on customers’ preferences and the modern functional furniture are emphasized by IKEA managers. The management target to keep the prices down is not the easy one. There are many major strategic goals and plans that Ikea tries to implement in order to succeed in furniture industry and surpass its competitors. The Ikea identifies its growth opportunities in the expansion of the brand around the globe. One of the goals for Ikea is to expand its business in U.S. market, because it constitutes the larger market in the world. Currently, there are approximately 12 Ikea stores in USA, especially in the big cities such as Washington, DC, Houston, Baltimore, MD, New York, etc. and its business is growing rapidly. Also, Ikea expanded its operations...
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...Ikea is an international business that was founded in 1943 by a Swedish boy at the young age of 17. At the time, his father had given him a reward for excelling in his studies which he then used to establish his own business. Ikeas current organizational structure however is much more complicated. It is now owned ultimately by a Dutch trust, and controlled by the Kamprad family. Various holding companies also handle several different aspect of Ikea’s operation, such as franchising, manufacturing, and distribution. These activities are separated into two groups that are based out of the Netherlands. The first group is the INGKA Foundation that owns the IKEA group. Second is the INGKA Holding B.V. this is the parent company for all IKEA group companies. Other key people involved in Ikea are the founder Ingvar Kamprad, the group president and CEO Anders Dahlvig, and Hans Gydell who is the President of Inter Ikea group. The name Ikea comes from the first two letters of the boy’s name, which is Ingvar Kamprad along with the first letters in his farms name and the village in Sweden that he grew up in. Ikea originally sold pens, picture frames, table runners, jewelry, wallets and nylon stockings with the idea of meeting consumer needs with products at reduced prices. Today Ikea is now a major retail experience with 128,000 workers in 253 stores spanning across 24 countries while generating annual sales of more than 21.1 billion euros with their top five sales in Germany, USA...
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...Name [optional] University The stakeholders of IKEA- Stakeholders are groups or individuals (customers, employees, suppliers, communities, and shareholders or other financiers) who can affect or be affected by the successes and failures of a business. In case of IKEA, their customers who bought furniture form them in 70 nations, all the employees who work for IKEA in 70 countries all over the globe, their suppliers all over the world who supply IKEA with the raw-material as well as furnished furniture, and all those who financed the company to open its stores and make primary investments in the 70 countries, for its geographical expansion are the “real stakeholders of IKEA”. IKEA was founded in the early 1950s, but in the mid of the 1960s it became a global furniture manufacturing company. During its expansion all around the globe, Ingvar Kampard (the founder of IKEA) opened multiple stores in different countries, some of them were self-financed by him while others were assumed to be opened as the tie up between the company’s and their stockholders (for finance) in that company, especially, those who financed the company to open the chain of stores on the foreign land. Also, when some problem arises in the indigenous market when Sweden’s local large furniture retailers threatened and all the sourcing and suppliers were blocked and even small retailers were ordered not to sell IKEA’s product, under that circumstance, IKEA has to look abroad for the suppliers. And soon after...
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