Strengths Of IKEA

* IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring

”The IKEA Concept starts with the idea of providing a range of home furnishing products that are affordable to the many people, not just the few.” *http://www.ikea.com/ms/en_GB/this-is-ikea/the-ikea-concept/index.html

The fourth part of the democratic design strategy is sustainability. IKEA’s products must be produced in a durable way with eco-friendly energy sources and materials. An example: IKEA will always choose the supplier that is better for the environment over the less expensive supplier. The PS pendant lamp is very sustainable, its size is adjusted, so that more lamps fit on a pallet, which saves a lot of space in the containers, thus less ships have to be used to transport the lamp. We all know this is really beneficial for our environment. Furthermore, the lamp is very easy to recycle.

IKEA is the world’s largest furniture retailer, specialising in selling stylish, inexpensive, self assembly Scandinavian design furniture, home accessories, kitchens and bathrooms in their retail stores around the world. Delivering good quality contemporary design furniture to the middle class consumer is not the only focus of the IKEA group; it also sells a lifestyle that customers around the world recognise and embrace. IKEA is a global company that has invested and is present in many countries; it promotes its products and services using the same brand in all markets coordinated from its one main corporate office in Sweden which is responsible

IKEA pursues sustainability in a big way which is why competitors could learn from their company. IKEA has a wide variety of products under its label. Today, 71% of all IKEA products are recyclable, made from recycled materials, and or both (A.Jefferies, 2009). In addition to this, Ikea recycles 84% of waste generated in its stores. IKEAs sustainability focuses on four components: products and materials, suppliers, climate change, and community involvement. IKEA bases

Also known for product innovation, use of renewable materials (75%) and “smart” use of raw materials (90% recycled/reclaimed waste products in energy production) IKEA has promoted its growth and popularity primarily related to branded image. (http://businesscasestudies.co.uk)

IKEA is using a different operation strategy from their competitors. The operation of IKEA has to cope with large volume because their products are highly repeatability and specialised. The variety of products the operation needs to create is low to medium as they offer

Ikea has established strong branding with wide range of stylish products. It focus on offering low-priced and affordable furniture. The furniture is easy to assemble and ship. It offers one-stop shopping and featured the amenities as playrooms for children and Swedish cafes, bank and enough parking spaces. It creates a friendly atmosphere and services to shop and design the store layout for a nice journey of shopping. It has strong global sourcing capabilities.

IKEA also based on low cost to achieve hybrid strategy. Big items are all flat-packed that the customers transported and assembled themselves. This saves IKEA with shipping costs from suppliers and delivery costs to customers so that they can pass this benefit to customers through low price. In the stores, there are no armies of sales staffs. Customers are providing with tape measures and pencils so that they can self-served. This reducing the number of sales staff required. IKEA encourages customers to create value for themselves by taking on certain tasks traditionally done by the retailers and their low expectation on service levels keeps costs down. Additionally, IKEA choose most economical suppliers over traditional suppliers around the world. The company buys great volume of materials from suppliers to get the economies of scale. Since the labour in UK is expensive, their products are produced in

This low price strategy is coupled with a wide range of well designed, functional products. IKEA 's products cater for every lifestyle and life stage of its customers, who come from all age groups and types of households. This is vital in times when the retail sector is depressed, as it increases IKEA 's potential market. The customer knowledge. Constantly using innovations to drive costs down.

As pointed out in Ikea's mission statement, the company is in business to produce high quality products at a low cost. This would support a

IKEA is a manufacturer of home and business furnishings who offer interior furnishing products to consumers in several countries across the globe. Before IKEA plans on expanding and entering any new market, they are required to obtain a clear understanding of what consumer behaviour and requirements are in that particular market. There are basically two types of Markets which include Consumer Market and Business Market.

Marketing Chief, Bill Agee, some of the largest segments of shoppers are young families and individuals who are just starting to live on their own (Manners, 2009). IKEA (2011) strives to offer quality furniture at exceptionally reasonable prices for these consumers. IKEA (2011) customers must also be willing to assemble their furniture as most of the products come unassembled in order to lower prices and ease transportation.

At the outset, it may be useful to characterise IKEA in terms of the characteristics of demand (also known as the four Vs, see Slack et al. p 20). First, IKEA is clearly a high volume operation – as indeed most international retailers are – which lends to systematising operations but which implies capital intensive processes and therefore cost considerations will be crucial. Second, IKEA offers a large number of products (up to 14000 depending on the country/store) so there is high variety in the

IKEA’s strategy towards its suppliers is that of a low production costs strategy. IKEA wants to sell its products at the lowest possible price therefore their