Ikea strategies in the marketplace

Résumé du document

IKEA was founded in the late 1940s by Ingvar Kamprad, an entrepreneur from Sweden, who hit upon the idea to offer home furnishing products of good function and design at much lower prices than competitors by using simple cost-cutting solutions that did not affect the quality of products.

With a total of 300 stores in more than 35 countries, more than 130,000 employees and figures reaching 21.5 billion Euros in 2009, IKEA is clearly the leader in the home furnishings industry in the world.

The brand has realized great success across the world due to:

 Relatively low prices with regard to its competitors.
 The relocation of its factories to countries where the cost of labor is low (For example, India and China).
 A wide range of products adapted to each customer.
 Good relationship with its customers
 Privileged relations with its suppliers
 Capacity to adapt its product to each customer's need and to innovate.

IKEA offers 100% natural furnishings in keeping with the current global outlook of protecting the environment. As a result of its collaboration with respected designers, IKEA innovates by offering furniture of quality and new designs.

Extraits

[...] How does Ikea choose its suppliers? In order to become an IKEA supplier, a company must respect the Code of Conduct settled down by IKEA way on purchasing marketing products and services”. It is IKEA minimum requirements on social and working conditions as well as the environment. This document aims to make IKEA position clear to suppliers and its co workers. Fulfilling legal requirements such as complying with national laws and international conventions is needed to become an IKEA supplier. [...]

[...] IKEA has 1800 suppliers in 50 countries. IKEA suppliers must provide suitable raw materials at low prices so that the company may offer right product at the right price”. It implies that IKEA needs to develop close partnerships with its suppliers. How can IKEA obtain low prices from its suppliers? According to IKEA, long terms agreements and bigger volumes give low prices. The aim is also for the already low prices to become even lower. Long terms contracts enable IKEA to make necessary investments and to ensure the supply of raw materials over a long period of time. [...]

[...] For example, the CEO of IKEA France developed the idea that, lifestyles have changed, it is necessary to modify the furniture from a patrimonial value to a product of consumption Besides, one of their other strength is that they have an integrated organization. IKEA checks all the stages, from the conception to the selling of products. Market studies and study of customers' behaviors will drive the central laboratory of IKEA in Sweden to conceive products. The sale price is set according to the competition, to the degree of innovation of the product, etc. and then make a deal with the suppliers. Finally, IKEA plays its distributor's central role. [...]

[...] Weaknesses: IKEA is a global company, so product standards may be difficult to maintain. Opportunities: IKEA can further capitalize on the "green" movement and IKEA customers' desire to have less of an impact on the environment. Threats: The regulatory environments across the globe vary and can affect how IKEA does business and its product costs, especially the use of natural resources. [...]

[...] To reduce their stocks, IKEA dims the price of its products. It also employs few employees on its stores and uses its own employees as models for their catalog. Furthermore, his employees are asked to travel in second class even in cost” companies for much economy. IKEA also set up a said strategy of the "flat parcel" to reduce the cost of transport of these goods and use only light materials for his furniture to optimize his costs. The customer will have to assemble himself the furniture he just bought. [...]