OVERVIEW OF IKEA
Ingvar Kamprad: The founder of IKEA, Ingvar Kamprad, began his business career as a young boy selling matches purchased in bulk individually for a profit to his neighbors near Agunnaryd. As his business grew, he expanded to selling fish, seeds, Christmas decorations and eventually, pencils and ball-point pens which were a new phenomenon in 1935. He was very clever in utilizing his resources - he delivered his goods by bicycle, and later used the local milk delivery vehicle to make deliveries.
IKEA: In 1943, with a gift from his father, Ingvar established his business, using his initials, Ingvar Kamprad, the name of the farm on which he was born, Elmtaryd and the ...view middle of the document...
IKEA US opened its first store in 1985, and IKEA UK first opened in 1987. In 2008, IKEA boasts 285 stores in 36 countries, with an additional 26 stores to be opened in 2009 and is the world's largest furniture manufacturer. |
IKEA’s mission is to offer a wide range of home furnishing items of goods design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy them (IKEA 1994). The company targets the customer who is looking for value and is willing to do a little bit of work serving themselves, transporting the items home and assembling the furniture for a better price. The typical IKEA customer is young and low middle income family.
Swedish Company IKEA was the world’s largest furniture retailer since the early 1990s. It sold inexpensive furniture of Scandinavian design. The company operated in 55 counties with a workforce of 76,0000. IKEA offered nearly 12,000 items to the home furnishings market worldwide. It sold a wide range of products including furniture, accessories, bathrooms and kitchens at 186 retail stores in 30 countries across Europe, North America, Southeast Asia, Middle East and Australia. IKEA is well known for its unique concept, low price, wide range of product and flat packing.
Price: low price, low cost logistics, large quantity purchasing, flat packed method reduce transportation cost
Product: offer>12,000 items; design: light and modern, many selections; multi functional
Ikea have a strong internationally known brand attracting key demographic customer groups.
The IKEA business model is unique in its construction and execution with little direct completion on a like for like basis.
Success has been driven from the price architecture offering value to the customer in innovative but functional products
Despite the large shed operations IKEA operate there is a degree of specialist knowledge within key product areas where purchases are more considered and require assistance such as kitchen installations.
While an international brand there is a level of reliance on European markets with 90% of the stores based in Europe and the balance across America, Middle East and Asia.
Although the model promotes low prices it has been identified there is an associated low level of customer service which couples this suggesting there is a need to work on service to ensure a complete shopping experience and ensure repeat business within the existing customer base.
As a reaction to marketplace movement the development of E-commerce has been necessary to compete in a modern technological world. However, there is also a consideration this movement into multi-channel retailing moves away from the fundamental vision of the customer being able to see and touch the product.
IKEA are moving from international to global status through the development of Asia and Eastern European...