(Franchise structure, 2015) The vision of IKEA is “to create a better everyday life for the many people”. Their 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”. This is achieved by offering quality at affordable prices to the customer through optimising the entire value of the chain, by building a long-term supplier relationship, with producing large volumes and by doing so, investing in highly automated production. (Business concept,
Therefor Ikea is more advanced than its competitors due to the showrooms and the cafeteria that they provide for the customers. This made Ikea being a unique place for customers to go. IKEA is also a standalone store, meaning shoppers do not have to go though shopping center traffic or any other similar conditions. Internationalization of IKEA was very important because it drove many IKEA’s top managers to positions of more responsibility, it increased profit, it enlarged the area of sales and it brought IKEA into new market places. It was also extremely important to make IKEA international because the Swedish furniture market was very adequate.
AC 2.1 – Evaluate the effectiveness of strategies used by IKEA to maintain supplier relationships and evaluate the effectiveness of these strategies. Proficient administration of suppliers is the vital path for assembling organizations can propel their execution. There are numerous huge parts of supplier administration; they join sourcing methodologies, and the way connections are overseen and the data trade arrangements embraced by IKEA. Taking into account the way that when in doubt, top of the line items are fabricated by various diverse suppliers. IKEA had 1,400 worldwide suppliers, 60% its suppliers are from European nations.
Communication between IKEA and its materials manufacturers and suppliers. Manufacturing takes place in the secondary sector where the value-added process occurs. To achieve this, IKEA designs its commodities in a manner that the least quantity of resources makes up the best products. Examples include the use of hollow legs in their furniture and the use of filling material made from honeycomb paper for the tabletops interior in the place of solid wood. IKEA retail shops also add value to the manufactured goods in the tertiary sector through the provision of a way of shopping that differs from the usual high street practice.
Ikea’s concept relies on their market positioning statement “Your partner in better living. We do our part, you do yours. Together we save money” and it focuses on the product design, consumer value and the cleaver solutions ; by using low-cost materials in a very novel incoming way and minimizing the costs of their production, distribution and retail costs in a smart way so their customer can have the benefits of their lower prices and their well designed high quality furnishing. Ikea has a around 590 million visitor p.a to its stores all over the world, in addition ikea’s main marketing channel is its catalogue that is distributed world-wide as 191 million copies in a totally different countries with different languages. Its catalogue has pictures of their furnishing with more details about the costs, shapes and colors also, their delivery service that is considered to be on of their huge advantage; they deliver the products to the customers houses and they build it for them for free.
The company wanted to create needs, not yet identified by the locals, that IKEA could present solutions to, that would ease the customers everyday-life. For example, IKEA learned that many Russian families live in small apartments and therefore IKEA marketed how their storage solutions could solve some of these problems. This shows that IKEA is not only innovative, but also a learning organization, in the way it operates to keep its competitive advantage. They strive to continuously learn about the new markets and incorporate it in their strategy. With their vision and values as guiding tools, providing direction, they are also actively shaping the "landscape" they are working in (Browaeys & Price, 2015, p. 223).
Ikea is also a global leader by not having a class structure at his company. During lunch all the employees eat together, this lets each employee feel that they are important. Upper management does not have special dining rooms at this company. The owner does not want anyone to feel they, are better than anyone else is. This prevents workers from turning against each other.
Title: IKEA Introduction IKEA is definitely a store that comes into mind when shopping for furniture. Founded back in 1943, IKEA first started from humble beginnings from just a single store in a city called Almhult located in Sweden. Unbeknownst to many, its founder Ingvar Feodor Kamprad had an interest at a tender young age in establishing a business and started selling matches, christmas tree decorations and stationery accessories to his neighbours by couriering them from his bicycle. The name IKEA was constructed from his own initials Ingvar Kamprad (I.K.) and the first letters of his hometown where he grew up, Elmtaryd (E) and Agunnaryd (A).
The corporate structure is composed of “operations” and “franchising”(IKEA, as cited in Mukazhanova, 2014, p. 5). It offered home furnitures, interiors and utilities with tasteful designs and affordable pricing schemes. The company’s vision statement is to: “Create a better everyday life for many people.” Its business concept pertains to reaching wide number of satisfied customers through its “well-designed” home products and low prices. Its market positioning concept is reffered as follows: “Your partner in
Due to different country’s policy, different business model are required for IKEA to run their business. For examples, IKEA will need to implement joint ventures as their business model to become successful in the Indian and China marketplace. Since the government for these countries requires that local business operations own about 51% control by Indian nationals, IKEA 's should find the right partner for its own. There are some advantages and disadvantages for IKEA to implement Joint venture as their business model. For the advantages are provide an opportunity to IKEA to access to the new markets and distribution networks, increased capacity to expand their business in foreign market, IKEA can share the risks and costs together with their partners and it will help IKEA to access to local resources, including specialised staff, technology and finance aspect.