...Case Study – IKEA 1. History (Explain) IKEA was founded in 1943 by 17-years old Ingvar Kamprad in Sweden. First two letters IK of IKEA were taken out of the founders name and last two letters EA symbolise the name of Kamprads parents farm ‚Elmtaryd’ and the village ‚Agunnaryd’ where the farm has been located. First the company sold various consume good such as pens, watches and wallets. In 1947 Kamprad started also selling furniture via distribution, especially to the poorer farmers in Sweden. 1951 the first IKEA catalogue ever was published just offering furniture. In the catalogues the furniture produced by IKEA was pictured as part of a complete furnished room, a thing that was unusual for the time then. In the 1950s Kamprad started hiring designers who designed furniture especially for IKEA. These were sold and shipped first in 1955 as building kits in order to keep the costs of assembly and shipping as low as possible. Three years later in 1958 the first IKEA store was opened in Sweden, followed 1963 by the second store in Norway. In the following 40 years ‚Ikea’ started building stores all over the world, mainly in European and Asian Countries and developed itself to a company with about 150.000 workers and sales about €25 billion in 2014 and 315 stores in 27 countries. 2. IKEA is considered one of the success stories. How have they achieved this success? What barriers have they overcome? They decided to side with the many. That means responding to the home furnishing...
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...Background IKEA, an international brand selling own well-designed ready-to-assemble home furnishing products and other merchandises, was founded in Sweden and registered in Netherlands in 1943 by Ingvar Kamprad. It became the world’s largest furniture retailer in year 2008. Today, there are more than 300 IKEA stores in 30 over countries in the world. Currently, the company hires up to 123,000 workers worldwide.The staff works in various departments in IKEA from communication and interior design, customer relations, design and product development, finance and business navigation, human resources, IT, logistics, marketing and communication, purchasing, restaurant, sales and sustainability and in TQE. (Inter IKEA Systems B.V., 1999 – 2013) 2.0Roles and responsibility of IKEA Human Resource Department The Human Resource (HR) department plays a huge role in the company. In IKEA, the department is responsible to allow and give down-to-earth straight-forward people the possibility to grow as individuals and in their professional roles (IKEA, 2013). They also handle recruitment and training, succession planning and benefits management. The HR team also needs to attract and inspire co-workers. Strengthening and safeguarding the IKEA culture is also one of their jobs(IKEA 2013). In this report, the recruitment and selection process undertaken by the IKEA’s HR team will be covered in this report. Figure 1 is the organization plan in IKEA. Figure 1: IKEA Organization Plan ...
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...ANALYSIS OF IKEA BUSINESS by Student’s Name Code + Course Name Professor’s Name University Name City, State Date Analysis Competitive advantage In modern economies finding the best unique business idea is hard since nearly everything someone is doing to make money. Furniture business is quite competitive and expensive especially when one considers quality and low price over everything. Considering the case of IKEA, making right choices matters and that’s why Kamprad knew exactly the power of high quality, low price, and quick delivery. This paper analyzes IKEA success strategy as well as weaknesses to give a clearer overview of its operation. The cost of the product in comparison with that of a competitor in any market matters. IKEA knew exactly how to balance the cost to be ahead in the competition. Kamprad, the founder of IKEA, concentrated on cost minimization in every aspect of his trading. That’s why he considered buying fabric directly from the textile manufacturer in large quantities. This ensured that there was enough material for a long time manufacturing at past price. This was advantageous since it helped him mitigate the effect of inflations and other production hazards like a strike. The result of such strategy was continuity in production and supply of furniture at a predictable and fair price. This contributed to the fact that IKEA products were 30-50% less than those of competitors. This clearly shows the importance of using high volume...
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...Ingvar Kamprad and IKEA Our group will illustrate IKEA’s general development in chronological order. We analyze its’ different strategy in corresponding stage, and look into IKEA’s future development. Part 1：IKEA’s initial development 1. Sources of IKEA’s successful entry in Sweden: Ingvar Kamprad saw a great opportunity when the furniture prices increased 41% faster than household goods between 1935 and 1946, and started selling low price, good quality and simpler design furniture primarily to the younger generation of customers who wanted to buy furniture for their first apartment. The tradition in Sweden was to sell expensive, long lasting (family heirloom) furniture, which after the war was too expensive for people. Instead of locating small stores in the central –more expensive part- of the city, he positioned his warehouses in the suburbs, which was a more cost efficient location which also allowed customers to park their cars. Also, because the furniture cartel banned Kamprad to sell directly to customers at shows and persuaded the manufacturing cartel to stop supplying furniture, IKEA started to sell with the help of catalog and started to supply from a different supplier, which allowed him to reduce his prices even more. He also introduced less expensive raw materials and a less-formal working environment. 2. Management process in the Europe-wide operation: In the Europe-wide operation process, we think the most challenging task for IKEA is to find a most effective...
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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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...IKEA Task 1 Boru Zhao Examine approaches to strategy evaluation and selection P7 Analyse possible alternative strategies relating to substantive growth, limited growth, Market entry strategies, and disinvestment strategies 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: Substantive growth: In any business strategy growth is the most important factor. To achieve substantive growth the firm needs to go through a lot of planning. Some of the key advantages of substantive growth are: • Exponential Growth: Once IKEA achieves substantive growth in their business then they can be confident that it will lead to more growth in the future. There is a tendency of the growth of wealth at an exponential rate and the company can use these funds for other project to generate gains in future. While an organization achieves substantial growth the main benefit is that it helps in investing them for future benefits and achieving potential wealth gains. This is always a welcome consideration. • Competition: Substantive growth of IKEA will help them to understand the strength of the competition and developing the business strategy accordingly. The faster a company achieves substantive growth the easier it is for them to beat the competition. The added wealth...
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...Sweden early on (50s and 60s)? In 1943, IKEA was founded by Ingvar Kamprad at his home town, selling mainly pencils, postcards and other merchandise. From late 40s to early 50s, manufacturing furniture was introduced as a complement to general merchandise. This enabled Kamprad to step in the furniture business and exploring situation and finding new opportunities. The business had gain massive success in the domestic market for the since opening and the key to its achievements is Kamprad’s leadership. He not only had the vision for the furniture industry, market’s situation, and enthusiasm for business, but Kamprad also played an important role in managing the company’s resources, turned it into capabilities and prove IKEA’s distinctive core competencies. Example for that can be IKEA’s leap on the furniture retail industry: more affordable products to target the large amount of customer, showroom and store’s concept, better customer experience… IKEA’s strategy and business model was also the company’s source of success. IKEA’s prioritize the need of customer, in which price and product range rank the first when it comes to satisfy customer demand, following by IKEA store, catalogue… Marketing strategy was also totally different from other market player at that time, with free and comprehensive catalogues, IKEA was able to introduced customer with a new shopping experience. IKEA’s simple objectives were also needed for its growth. IKEA stated that low costs in all operations are...
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...This article was downloaded by: [Hong Kong Polytechnic University] On: 3 June 2010 Access details: Access Details: [subscription number 738313287] Publisher Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 3741 Mortimer Street, London W1T 3JH, UK The International Review of Retail, Distribution and Consumer Research Publication details, including instructions for authors and subscription information: http://www.informaworld.com/smpp/title~content=t713735234 Knowledge and knowledge sharing in retail internationalization: IKEA's entry into Russia Anna Jonssona; Ulf Elga a Department of Business Administration, School of Economics and Management, Lund University, Sweden To cite this Article Jonsson, Anna and Elg, Ulf(2006) 'Knowledge and knowledge sharing in retail internationalization: IKEA's entry into Russia', The International Review of Retail, Distribution and Consumer Research, 16: 2, 239 — 256 To link to this Article: DOI: 10.1080/09593960600572316 URL: http://dx.doi.org/10.1080/09593960600572316 PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf This article may be used for research, teaching and private study purposes. Any substantial or systematic reproduction, re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does...
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...CASE STUDY IKEA: Furniture Retailer to the World In a study some factors that have accounted for the success of IKEA are the prices they put on the furniture, the cost efficiency in the way the furniture was composed of their form of transportation. The article states that IKEA would look at the competition’s price in each category, and then set their on low prices. IKEA utilized cost efficiency with their building material so they can turn profit. Inexpensive materials that are not very aesthetically appealing are used in places that people can’t see very easily. IKEA cut down on their costs exponentially by shipping the products directly to the customers or they can go directly to the outlet stores to pick up the furniture. Finally, the atmosphere of IKEA the stores play a role in the overall success of the furniture store. In the global business I think the company product strategy and the range of the great ideas. This is different than anything that the customers didn’t even know it existed. Legal, Cultural and Ethical Challenges The product including Scandinavian, Modern and the young European look of styles. IKEA was hoping for in the U. S., should the company change their strategy. I my opinion I feel that some of the matrix of the products should change, with the different roles governments for the business. I thinks that IKEA wants to achieve the revenue in the U.S. they have to have more floor plans that fit our way of life and culture. The business...
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...Today, IKEA is the world’s largest furniture retailer and it is also internationally known as home furnishing retailer. IKEA always concern for people and the environment. Besides that, it also responds to the public and customer’s rising concern for sustainability in its choice of product range, suppliers, stores and communication. However, there are still problems faced by IKEA from the aspect of organization development that requires changes to take place in order for the organization to improve efficiency and effectiveness of its existing operations and also to ensure that goals and objectives of the organization can be achieved. The first problem encountered by IKEA is the size and scale of its global business. IKEA is known as the world’s largest furniture retailer and carries a range of 9,500 products, including home furniture and accessories. It also means that IKEA’S outlet is widely establish in many other countries. Thus, this could make it extremely hard to control in terms of its standards and quality. So they must figure out some solutions to deal with the problem which will bring benefits to whole organization. Also, the quality of the products in each country may be slightly varied from others. For example, some countries where IKEA products are manufactured do not implement the legislation to control working conditions. Hence, this could represent a weak link in IKEA’S supply chain and also affecting consumer’s view towards IKEA’S products. In terms of that...
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...IKEA Case Study IKEA Case Study The founder of IKEA, Ingvar Kamprad, established the IKEA brand in Sweden when he was only 17 years old. It was 1943, and the IKEA brand started its enterprise journey by selling items such as seeds from Kamprad’s family’s farm and Christmas magazines. By 1948, the IKEA furniture line came to life. Kamprad’s concept was “good furniture could be priced so that the man with that flat wallet would make a place for it in his spending and could afford it” (Hill, 2013). Today, IKEA is one of the world’s largest furniture retailers. This essay will discuss the legal, cultural, and ethical challenges that confront IKEA; determine the various roles that the host governments played in IKEA’s business operation; and will summarize the strategic and operational challenges facing global managers illustrated in IKEA: “Furniture Retailer to the World.” Legal, Cultural, and Ethical Challenges IKEA faced obstacles with a culture of disjointed, established Swedish furniture retailers that sold an expensive line of furniture that was to be passed down in families as heirlooms. IKEA’s self-assembly, less expensive furniture concept led to ethical and legal implications for them. Kamprad was able to undercut prices of the established retail outlets by cutting retailers out of his process (Hill, 2013). Because Kamprad cut the retailers out, they countered by coercing furniture manufacturers to not make sales to IKEA...
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...BRIEF MARKETINGPLAN 2/26/2013 Ikea as an example – Pooneh Tabei “The IKEA business idea is to offer a wide range of home furnishings with good design and function at prices so low that as many people as possible will be able to afford them.” is strategic planning tool and is placed as the first stage in marketing plan. The goal is to help the company focus on key terms and ultimately reach its objectives. Strengths & Weaknesses – internal aspects and is under the company’s internal control. Opportunities & Threats – external factors and is outside of the company’s internal control. 1) Strong global brand, which promises quality. 2) Strong concept offering design, quality & functionality at low prices. 3) Strong attractive vision statement. 1) Growing demand to eviromentaly friendly products. 2) Growing demand for low-price products with regard to current global financial trends. 1) Size & scale of global business, which makes the controling aspect difficult. 2) Employment working conditions not the same in all countries. 1) New entries to the low-price home furnished industry. 2) Global economic recession affecting comsumer purchase behaviour. Values creating factors & partners 1) Very costumer centered 2) Strong network & Ikeas as a hub company of network 1) Co-creator of value Strong involvement in value creation Well-informed about their role 2) Highly efficient logistics Central role in the network chain –...
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...Case for Analysis How IKEA Manages the Global Environment Summary: IKEA is the largest furniture chain in the world found by the Swedish entrepreneur Ingvar Kamprad. It has more than 270 stores operating in 25 countries, and its still growing. IKEA was able to expand globally due to its ability to meet the average needs of its customers by providing them with a well designed and well made furniture at an affordable price. Its global approach focused on simplicity, attention to details, cost consciousness and responsiveness in every aspect of its behavior and operations. Kamprad had values and beliefs about how should companies treat Employees and customers, and he taught stores’ managers and employees his values so that they can all work “together” in IKEA (as a global empire). In IKEA, every employee plays a role in the company and has obligation to everyone else. They all -including Kampard himself- use minimum expenses. Every employee start at the bottom of the ladder, get the required training to perform all activities of a store and if enthusiastic enough he/she can get a rapid promotion. Employees are rotated among different departments and sometimes between stores. They all cooperate and take initiatives and responsibility for solving a problem and focusing on customers. IKEA’s atmosphere is simple with an informal dress code and no marks of status. “breaking the bureaucracy week” in which managers are required to work in stores and warehouses for a week makes...
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... Advertising play an essential role in terms of the economy, culture and social fields. The definition of advertising can refer to Yeshin, Tony (2006) who demonstrated that “Advertising is one of a variety of marketing communications tools that companies can use to achieve their defined objectives.” This statement also illustrate that an effective communications activity in the business field need to advertising support and widespread application as well. Besides, as the media technology continual innovation and development in recent years, the forms of advertising and communication code have been changed a lot which from unicity forms become more diversity. So, the concept of multimedia advertising has been widely applied in the modern age. “Multimedia advertising is the process by which a company conducts an advertising campaign for its products or services over multiple media outlets.” (wiseGeek) This method make the product of an enterprise can be presented in a new way in order to attract more customer’s attention and obtain profits. This essay focuses on analysis the current multimedia advertising campaign based on a furniture store named IKEA and the mainly structure of this essay can be divided into four parts which are Creative Brief, Analysis of target audience, Assessment of how the advertising works and media strategy. Background of IKEA IKEA is a Swedish furniture company which was founded in 1943. In addition, IKEA is a values-driven company with...
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...Supply Chain Management – Assignment (Wal-Mart & IKEA) Are they involved in strategic alliances with major trading partners? If so, how and for what purpose? Strategic Alliances Definition of Strategic Alliance: Strategic alliances are inter-firm collaborative business models that allow firms to create value by sharing resources, obtaining market influence or access novel markets. Simply put, strategic alliance allows for projects where companies can share their resources and risks for an agreed period or project. Resources such as distribution chains, development of products, technologies or services become communal amongst alliances. In recent times, the potential positive effects of alliances are highly regarded by firms, thus, leading to an increasing trend in entering into strategic alliances with the aim of constructing stable collaborations. While the successes of alliances are plentiful, there is also evidence of many undesirable business outcomes. This section of the research paper will discuss and analyze the applications of strategic alliance for global giants in the retail business: IKEA and Wal-Mart. IKEA’s Strategic Alliances: IKEA aims to provide consumers with low-price products through fostering long-lasting business relationships and networks with its main suppliers. These relationships are a pivotal part of the development of IKEA’s products and technologies. IKEA tends to push interactions with their suppliers as far upstream as...
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