...important aspect to IKEA’s supply chain is the approach used when pricing their products. In normal practice, a company designs their product and then prices it according to the cost of production and their competitor’s markup. IKEA have a different approach, they first ascertain a target price and then design the product. Designers at IKEA must accommodate all costs such as raw materials, manufacturing and transportation until the product reaches the stores within its target price. IKEA have developed this approach in order to support ‘a vision 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.’ (Our Business Idea-IKEA) IKEA adopted the idea of designing practical furniture that could be disassembled for flat packaging and transported to their stores worldwide. This idea was implemented in order to reduce the amount of free space in its transportation and storage. Transporting their goods in flat packs allowed IKEA use their space more efficiently and therefore cut down on their costs in contrast to their competitors who transport assembled furniture. Although the company focuses on producing affordable furniture they do not compromise the quality of the goods when designing them. In order to manage their supply chain, IKEA divided their corporate structure into different division with three major components-Retail, Distribution and Trading Areas. IKEA of Sweden: Develops...
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...ANALYSIS OF NEW SUPPLY CHAIN PLANNING OF IKEA (Jonsson et al., 2013) reported that the start-up point of new global planning process includes starts planning of sales and demand as depicted in figure 2. It sets the frames and generates future demand information for IKEA’s business areas. The demand information is thenceforth input to the worldwide materials planning process (2), that successively drives the provider capability and cargo planning processes (3) and also the planning of the distribution provide chain (transport, warehouse, and store planning; 4a-c in Figure 2). Figure 2 IKEA developed its centralized planning construct in many stages (Figure 3). It initial centered on demand planning, with new demand planning code being enforced...
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...Corporate and Ethical Social Responsibility Assignment Question: Is CSR just another form of PR for companies wishing to get an edge on their competitor? Discuss with primary reference to IKEA. Student Name: Pui Tung CHIU Submission Date: 3 April 2015 Introduction A business activity generates both positive and negative influence for both the corporate as well as the society. The growing expectations of social, environmental and legal responsibility gradually rise in the past decades for corporate. Organizations use corporate social responsibility (CSR) to set up activities in order to achieve and respond these expectations. Jamali and Mirshak (2007) state that CSR approach helps to attract global attention and acquire a new resonance in the worldwide economy. However, Frankental (2001) claims “Do CSR is a public relations (PR) invention?” and company focus on promoting itself, getting an edge on its revivals rather than being ethic to protect the environment or maintain human welfare. Therefore, in this essay, author is going to discuss about the different between CSR as well as PR. Moreover, it will apply an example of IKEA to examine the effectiveness of its CSR in supply chain and analyze CSR as a business strategy to maintain the sustainability of business, financial control and risk management. Afterwards, author will highlight the limitations of CSR policy and finally provide some recommendations to improve the CSR strategy for...
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...Strategy adopted? http://www.oppapers.com/essays/The-Strategy-Adopted-By-Ikea/740556 1 Explain, in details, the strategy adopted by IKEA, and how it successfully did the positioning. *** At business level strategy Focus Strategies By implementing a cost leadership or differentiation strategy, IKEA choose to compete by exploiting their core competencies on an industry-wide basis and adopt a broad competitive scope. Alternatively, IKEA can choose to follow a focus strategy by seeking to use their core competencies to serve the needs of a particular customer group in an industry. In other words, IKEA focus on specific, smaller segments (or niches) of customers rather than across the entire market. Focused Business Level Strategies involve the same basic approaches as Broad Market Strategies. Focus strategies can be based either on cost leadership or differentiation. Focused Cost Leadership Strategy IKEA that compete by following cost leadership strategies to serve narrow market niches generally target the smallest buyers in an industry (those who purchase in such small quantities those industry-wide competitors cannot serve them at the same low cost). Global furniture retailer IKEA provide customers with “affordable solutions for better living” through use of the focused cost leadership strategy. The company offers home furnishings that combine good design, function, and quality with low prices. IKEA does this by offering low-cost, modular furniture (assembled by customers)...
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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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...Shidler College of Business University of Hawai´i at Mānoa Vietnam MBA Program Fall 2011 BUS 632—Business Strategy Dates of Course: Oct. 20 - 29 Professor James Richardson BusAd C501f Office Phone: 956-7270 Email: jamesr@hawaii.edu Course Outline and Objectives: BUS 632 covers strategic management as an integrating paradigm for your business knowledge. The aim is to develop an understanding of the strategic challenges facing managers in competitive markets. Globalization, foreign competition, and rapidly changing technology have sharply increased the intensity of competition in most industries. We will learn how leading firms have devised strategies, structured, and managed their organizations to achieve competitive advantage in this challenging environment. Strategic management deals with uncertainty and unstructured situations. You will learn tools and concepts for putting some structure into your analysis of strategic issues. But most strategic choices require judgment. Case studies enable us to test our judgment and learn vicariously from successful and unsuccessful managers in a variety of situations. Hence, class discussion of the cases is a central part of your learning experience. Methods: We will combine cases, lectures, individual and group papers and presentations. Pre-requisites: First semester of Core. Textbook: Jay Barney, Gaining and Sustaining Competitive Advantage, Fourth Edition. Case Packet will be available. Assignments and Grading: 1. Participation: (15%)...
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...that any assistance I received in its preparation is fully disclosed and acknowledged in this assignment I also certify that this assignment was prepared by me specifically for this course I certify that I have taken all reasonable precautions to make sure that my work has not been copied by other students I confirm that I have understood the College’s regulations on plagiarism I confirm that research resources are fully acknowledged Signature: Mounir TIZI Date: 26/01/2015 1 To be corrected by: Mr Deji Sotunde. By: Mr Mounir TIZI. 2 Abstract This paper focuses on highlighting some characteristics of the international home furnishing company, IKEA. Also, a discussion on the current operations of the company was carried out using different tools like porter’s value chain analysis and SWOT analysis. Additionally, in this...
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...Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German Video Production? The offer to have a representative appear on the upcoming broadcast of the German Video Production seems like a total setup. This movie sounds like it is totally geared towards tearing down the corporation’s credibility, etc. If a representative goes, most likely there will be set questions created by the group that made this video in attempt to incriminate IKEA on camera. I would recommend that Marianne Barner thank the German Video Production company for the invitation but to politely decline and say something to the extent that IKEA is currently investigating the operations of its suppliers to ensure compliance with IKEA’s policies. Thereby, as kindly as possible you extend politeness and it is implied that IKEA is now aware of the child labor IKEA is actively seeking to resolve the issue. 2) What actions should she take regarding the IKEA supply contract with Rangan Exports? The most logical approach towards addressing this issue would be to perform some sort of investigation on ALL of IKEA’s suppliers to make sure that all of them are in compliance. If IKEA singles out Rangan Exports, they could risk some sort of discrimination suit. Additionally, if there are more suppliers in violation of their contract besides just Rangan Exports, these will also eventually come to light in the public eye. If IKEA chooses not to terminate the contract...
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...Global Sourcing Development at IKEA – a Case Study Paper prepared for the 25th IMP conference Jens Hultman1, Susanne Hertz1, Rhona Johnsen2, Thomas Johnsen2 1: Jönköping International Business School, P.O Box 1026, SE-551 11 SWEDEN E-mail: jens.hultman@ihh.hj.se, susanne.hertz@ihh.hj.se Tel: +46 0(36) 10 10 00 2: Audencia Nantes School of Management, 8 Route de la Joneliere, BP 31222 – 44312 Nantes Cedex 3, France. E-mail: tjohnsen@audencia.com; rjohnsen@audencia.com Tel: + 33 (0)240 37 46 25 Abstract This study explores the dynamic process of global sourcing development through a case study of the Swedish home furnishing giant IKEA and its supply network concerning the PAX wardrobe system. The paper provides a synthesis of the existing global sourcing literature by dividing this growing body of research into three major themes: globalization processes and stages, motives/drivers, and organizational design and management. Moreover, the paper integrates the global sourcing literature with the established literature on the internationalization process of firms. Comparing the existing research on global sourcing and internationalization, we propose two research questions focused on: (1) the ways in which the IKEA global sourcing and supply chain development process resembles a linear stages process, and (2) the principal drivers of the development of global sourcing within IKEA. Relating the findings of the global sourcing process in the case of IKEA, the paper suggests that the...
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...CONTENT Introduction – IKEA’s background……………3 IKEA’s Supply Chain Analysis……………….3-4 IKEA’s Logistics Activities……………………4-6 IKEA’s Internal Environment…………………6-7 IKEA’s External Environment…………………8 Problems and Solutions……………………….8-10 Conclusion…………………………………….11 References…………………………………….12 Introduction Since first founded in 1940s, with its mission statements to “create a better everyday life for the many people”, IKEA’s business idea has achieved great success. In this report, we would mainly focus on IKEA’s logistics function, We begin by analyzing IKEA’s supply chain, adopted strategy, the internal and external environment. Second, we investigate into IKEA’s logistics operations. At the last part, we discuss the problems of business and logistics aspect IKEA faces, and give our advices to solve them. IKEA’s Supply Chain Analysis For the IKEA’s supply chain, it includes suppliers, manufacturers, retailers and customers. Firstly, IKEA has thousand amounts of suppliers provide raw materials and components for the manufacturing acticities globally. It also has cooperation with a number of suppliers as joint owners or financiers in Poland, Slovakia, Russia and China such as Konakovo factory (Russia) providing four different items for IKEA’s Moscow store, Priozersk factory (Russia) providing five different chair models, RPOFIm (Poland) providing three different types of office chairs etc. This can ensure the continuous flow of manufacturing services...
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...ABSTRACT Distribution logistic plays an important role in international companies or in Multinational Corporation. It is because most company preferred more competence in the complex and global market. Nowadays customers more concern about how long their ordered product reach to them rather than worrying how the company will deliver the products. As a consequence, time can be used as an indicator in distribution logistic. This research is conducted to explain the consequences of distribution logistic and the way IKEA will gain competitive advantage by utilizing it. We will identify the key elements in distribution logistics and find the competitive advantages of IKEA through analyzing the case study of IKEA and they are: speed, dependability and last but not least is flexibility. Keyword: IKEA, Distribution logistic, Competitive advantage. INTRODUCTION 1.1 BACKGROUND Logistics management is the governance of supply chain functions. Logistics management is important not solely to producing and assembly industries, that are goods-oriented, however conjointly to selling, transport and alternative distribution or service- oriented industries. Daskin (1985) defined logistics as “the design and operation of the physical, managerial and informational systems needed to allow goods to overcome time and space”. Another definition promulgated by the Council of Logistics Management Ballou (1992) is: the process of planning, implementing and controlling the efficient, cost-effective...
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...IKEA ANALYSIS REPORT Dan Pinzon Argosy University Abstract This report explores the notion of values-based service, and how a company like IKEA creates value for customers and other stakeholders. In order to better understand the IKEA environment we will look at IKEA’s marketing strategy, beginning with its products, services, and other attributes that contribute to its value proposition. Following, exploring how IKEA creates a well-defined market position, and how they differentiate their offerings from competitor offerings. Included in this report is an assessment of IKEA’s strategy by analyzing its sources of value in its value chain, an explanation of its intangible products and benefits, and why IKEA considers its customers to be critical stakeholders. This report concludes with an establishment of several key performance measures that enables management to integrate IKEA’s values in its operations. Introduction In 1943 Swedish entrepreneur Ingvar Kamprad founded the now furniture giant IKEA. He began by going door to door selling pens, wallets, and watches. When he began selling his low priced furniture, his competitors immediately tried everything to stop him. The local suppliers were banned from selling him raw materials, and he was not allowed to showcase his furniture in industry expeditions. So Ingvar began to innovate, building his own furniture and buying raw materials from other countries. As the company grew globally, IKEA realized the need to adapt to...
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...A systems perspective on supply chain measurements Stefan Holmberg The Authors | Stefan Holmberg, Division of Logistics, Lund University, Sweden Abstract | Both practitioners and research scientists have noted a number of problems regarding measurement activities during the past decade. The problems reported suggest that measurement activities are fragmented both within and across organizations. Expands on a systems perspective on supply chain measurements and describes how problems can be communicated, understood and managed by developing methods and tools for describing interrelationships within supply chains. Empirical evidence from a case study of a Swedish home furnishing business supply chain provides data suggesting that firms within a supply chain cannot simply be categorized as either having adopted systems thinking or not. Rather, both structured models indicating a high degree of systems thinking, and problems showing fragmentation, are present. A performance model, which is used to reflect the systemic structure of an underlying supply chain and a potential integrator, is introduced and suggested as the focus of future research initiatives within supply chain measurements. Article type: case study. Keywords: Supply chain, Measurement, Systems integration, Performance measurement. Content Indicators: Research Implications** Practice Implications** Originality** Readability** International Journal of Physical Distribution & Logistics Management Volume...
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...IKEA’s Marketing The vision of IKEA is “to create a better everyday life for the many people.” IKEA’s vision goes far outside of just providing home furnishings, but to “create a better everyday for all people impacted by our business.” The company’s goal and mission is “to offer a wide range of well-designed, functional home furnishing of products at prices so low that as many people as possible will be able to afford them.” (IKEA website, 2015). IKEA’s products, services and attributes bring value proposition by providing products and services at a low cost then its competitors as its highest priority, well-designed modern furniture to a mass group of consumers through a distinctive shopping experience then its competitors. Not only do they provide affordable home furnishings, they make consumers shopping experiences in their retail warehouse a unique experience. They showcase and market their products by having consumers walk through a path in their retail store displaying all their products in realistic home setups first before they go to their warehouse to pick up their products for purchase. IKEA provides a one stop shop for consumers by providing daycare services while consumers shop and they provide a cafeteria with a select variety of food options at a low cost. (IKEA website, 2015). IKEA’s marketing communication strategy...
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...directly at IKEA and one of its suppliers. The best defense is to take this opportunity to fight back. • Since IKEA already signed agreement on not using child labor, they can’t ignore the challenge this program may bring. • IKEA has gained some positive accomplishments to the child labor issue and took actions to eradicate child labor. It is a good chance to further publicize their efforts. • Marianne should prepare herself well by analyzing the situation of that year (May 1995) before going to the program; Rangan Exports should be investigated by both independent 3rd party auditors and IKEA before the program. • It is the opportunity to communicate with the public regarding Ikea’s long-term strategy with accurate milestones to prevent child labor, in response to their social responsibility. • If Marianne is not outspoken, an eloquent person from the senior management who is familiar with IKEA’s child labor issue and company’s stand should go to the program. 2. Should IKEA continue to deal with Rangan Exports? • No. Rangan Exports apparently violated the contractual commitment it had made not to use child labor. Legally speaking, IKEA should terminate the contact right away. • In 1994 after the Pakistan child labor issue, IKEA already had a clause to all supply contracts, stating that if the supplier employed children under legal working age, the contract would be cancelled (a “black-and-white” clause). • By halting the contract with Rangan Exports, IKEA sends a clear...
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