Strategic Management

The well-known ‘build-it-yourself’ product design makes them progressive and makes them running ahead of the competition. IKEA is the only big brand in a category further not present in global markets, there are no real competitors operating in the same category. In 2013 775 million customers visited IKEA in 2013, and its website hosted 1.2 billion visits (4). Due to the ‘build-it-yourself’ product design IKEA is able to provide their customers with high quality and low cost products, even the customers with limited income and limited living space

IKEA is a world famous furnishing company known for selling Scandinavian-style furniture and other home-based goods. The company has over 230 stores, with operations carried out in over 42 countries with well over 70 000 employees. The stores themselves can occupy 410 million shoppers per year. It is a Swedish based company built on the idea of offering a wide range of well-designed, functional home furnishing products such low prices, that a majority of people will be able to afford them. The IKEA group is currently solely owned by the INGKA Foundation through a holding company, unlisted on any stock exchange.

In order for a supply chain to run as efficiently as possible, considerations must be in place to ensure the logistics function is operating in an appropriate manner. Part of this is ensuring that the distribution centre is located in an area that allows the greatest efficiency, all the while still meeting operational and strategic needs (Van Thai & Grewal, 2005, p. 4)

IKEA is an international company which designs house products and sells them in the form of ready to assemble furniture. It is one of the world’s largest furniture companies. It is founded by17 years old Ingvar Kamprad in Sweden in 1943. The most important fact about the company is the attention to control the cost of the products, which allows them to lower the prices. Even today they are continuing to expand in the world by looking forward to new product developments. The number of stores of IKEA in the United States is 14 at the moment and they aim to have 50 stores by 2013.

1. Design- IKEA designers work in exactly the opposite way from their competitors. They design their products in such a way so that they can keep the prices low. IKEA designers design every product starting with a functional need and then decide on price. With the help of their vast knowledge in innovation and low-cost manufacturing processes through a large network of suppliers, they design the final product which can fulfill consumer’s functional needs. Large volumes are purchased to push prices down even further by distributing the R&D cost. Most IKEA products are designed in such a way so that they can transport in flat packs and assembled at the customer's

Most players in the furniture industry remain highly focused on their respective domestic markets. The localization of furniture has become a norm in most countries due to domestic preferences and demand for low cost. The king of the Swedish furniture industry decided to break the custom and decided to go global with IKEA.

IKEAs brand image is built on their long term strategic focus to produce products from sustainable materials in an aim to care for the environment and earth’s natural resources. This aligns with IKEAs vales to promote social, environmental and economic development. IKEAs concept of customers shopping for mass produced, standardised products in a ‘self-service’ environment allows for cost efficiency

IKEA’s vision is to design a better life at home. Making it affordable as possible so that many people could have admirable furnishing. IKEA use function, quality, design and value to obtain their customer needs. IKEA learn to synchronise the contingency of the supplier and needs of the customers. Using that strategy to sustain the low prices. In order to gain a good condition of a product, IKEA go in for highly automated production. Together with mass producing and keeping long-term relationship with the supplier, IKEA is able to prolong their vision and aim to serve their customers. (Ikea.com/sg)

A different approach about Ikea’s success is given by Sara Kristofferson in her book Designed by Ikea, London 2014. In the first chapter, Kristofferson refers to the relationship between the swedish goverment and Ikea.

Even IKEA is a brand-known business but they try to attract more consumers with unique product features that make them able to compete and longer in market. IKEA runs their business with creativity to ensure the services and products always can satisfy

Ans: In order to handle a large furniture store like IKEA, a batch of workforce is essential. So workforce managing becomes a serious issue for IKEA. In addition while maze like structures of IKEA offer them with vast profits, this tricky layout could be a dilemma for customers in case of any unlucky disaster takes place at the store.

Our business idea is "To 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." Our market positioning statement is "Your partner in better living. We do our part, you do yours. Together we save money."” (IKEA, 2007)

Ikea developed an interesting product strategy and product range. The company had a good idea to setup a council to effectively manage and oversee products the company carried. The company’s focus to study consumer spending with the competition, gave them insight on how to construct a better

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,