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VALUE CHAIN ANALYSIS

AND HISTORY
OF

BYMANJEET SINGH(12214013)
VINEET (12214042)
UPNEET SINGH (12214040)

CONTENT

CONTENT

Page no.

1.SUMMARY

1.1.

PURPOSE OF REPORT

1.2.

INTRODUCTION

2.VALUES

3.BRAND IDENTITY

4.VALUE CHAIN ANALYSIS

4.1

PRIMARY ACTIVITIES

4.2

SUPPORT ACTIVITIES

14

5.HISTORY OF IKEA

16

6.CONCLUSION

33

1. SUMMARY
1.1 PURPOSE OF REPORT
The objective of this report is to perform a value chain analyses of IKEA and
chart the history of the organisation focusing on strategic important
decisions taken. This report will help us understand how IKEA became
market leader in furniture. The report will enlighten us upon the strategies
that IKEA have taken throughout the journey to provide continuous value in
through their primary and secondary activities of business.

1.2 INTRODUCTION
IKEA, a global furniture retailer, is established on the concept of offering
wide range of functional, well-designed and low-cost home furnishing
products. The IKEA concept journey continues with its global operations in
40 countries, with 330 stores and 154,000 workers.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. It is achieved by combining
function, quality, design and value - always with sustainability in mind.
The IKEA Concept exists in every part of their home company, from design,
sourcing, packing and distributing through to business model. IKEAs aim is
to help more people live a better life at home.IKEA was founded by Ingvar
Kamprad in Sweden in 1943. Since that time, IKEA has grown into 40
countries where IKEA Group has 330 stores. IKEA Group also owns its own
sawmills and production factories Swedwood from 1990's.
In the Czech Republic, IKEA is almost 25 years on the market and runs 4
stores where almost 1,500 co-workers contribute to IKEA success and
fulfilling of vision and business idea.
'A key factor to our strong performance is that we have a long-term view,
and dont aim to maximise short-term profits. We strive to continuously
create better products at lower prices to our customers and to make
2

substantial investments in our future ', says Peter Agnefjll, President and
IKEA Group CEO.

The sales turnover is recorded as 27.5 billion for the year 2012. Inter IKEA
Systems B.V. owns IKEA retail system, IKEA concept and IKEA franchisor.
The business model closely embraces franchising it as means of rapid
growth. Initiated its operations as a seller of home furnishing products, IKEA
today diversifies its products into pre-fabricated housing and food.

2. VALUES

IKEA has been following these values starting right from their inception, and
these has been the building blocks of its unmatched success. IKEA believes
that every individual has something valuable to offer. At IKEA, they respect
each other, their differences and are open to everyone making a
contribution.
Leadership with Examples:
At IKEA their managers act according to IKEA values, create an atmosphere
of well-being and expect the same from co-workers. They believe No
method is more better than a good example.
Togetherness with Enthusiasm:
IKEA believes Together, we have the power to solve seemingly unsolvable
problems. We do it all the time.The true IKEA spirit is still built on our
enthusiasm, from our constant striving for renewal, from our
cost-consciousness, from our readiness to take responsibility and help out,
from our humbleness in approaching our task and from the simplicity of our
way of doing things.
Constant Desire to renewal:
IKEA knows that adapting to customer needs with innovative solutions
contributes to a better everyday life at home.
Cost Consciousness:
Low prices are impossible without low costs, so IKEA proudly achieve good
results with small resources.That is an old IKEA idea that is more relevant
than ever. Time after time IKEA have proved that they can get good results
with small means or very limited resources. Wasting resources is a mortal
sin at IKEA. It is not all that difficult to reach set targets if you do not have
to count the cost.It forces IKEA to develop products more economically, to
purchase more efficiently and to be constantly stubborn in cost savings of all
kinds. That is the foundation of their success.

Striving to meet Reality:


IKEA stays true to practical solutions to develop, improve and make
decisions based on reality.
Humbleness and willpower:
We respect each other, our customers and our suppliers. Using our
willpower means we get things done.Simplicity is a fine tradition among us.
Simple routines mean greater impact. Simplicity in our behavior gives us
strength.Simplicity and humbleness characterize us in our relations with
each other, with our suppliers and with our customers. It is not just to cut
costs that we avoid luxury hotels. We do not need fancy cars, posh titles,
tailor-made uniforms or other status symbols.
We rely on our own strength and our own will!
Daring to be different:
IKEA believes in questioning old solutions and, if they have a better idea,
they boost they are willing to change.
By refusing to accept a pattern simply because it is well established, we
make progress. We dare to do things differently; not just in large matters,
but in solving small everyday problems too.
Accept and delegate responsibility:
We promote co-workers with potential and stimulate them to surpass their
expectations.In IKEA family we want to keep the focus on the individual and
support each other. We all have our rights, but we also have our duties,
freedom with responsibility.
Only while sleeping one makes no mistakes. Making mistakes is the privilege
of the active of those who can correct their mistakes and put them right..
The fear of making mistakes is the root of bureaucracy and the enemy of
development.
Constantly being on the way:
IKEA reviews whats done today and ask what can be done better tomorrow,
so they can find new ideas and inspiration.
The feeling of having finished something is an effective sleeping pill. A
person who retires feeling that he has done his bit will quickly wither away.
A company which feels that it has reached its goal will quickly stagnate and
lose its vitality.
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3. Brand Identity
IKEA slogan
Home is the most important place in the world.
A better everyday life at home.

IKEAs mission and vision are the same statements

Vision Statement
At IKEA our vision is to create a better everyday life for the many people.
Our business idea supports this 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 vision also goes
beyond home furnishing. We want to create a better every day for all people
impacted by our business.

The statement lacks 5 components: markets, technology, and concern for


survival, public image and employees. It doesnt mention any values that
are used in our evaluation and doesnt address any stakeholders except
customers. IKEAs mission is customer-oriented, which means that the
company is focused on satisfying customers and solving their problems. The
biggest problem with companys mission is that its also used as a vision,
which is a different statement having its own purpose. Therefore, IKEA
should create a separate mission statement, which should address many
more stakeholders and provide information about all 9 components in it.

Currently, the statement poorly communicates IKEAs core purpose or


reason for being to its stakeholders.

Business Highlights

31.9 billion total sales in FY15, an increase of 11.2% over last


year.
3.5 billion net profit in FY15 an increase of 5.5%.
9500 products across the IKEA range
Operation in 43 countries with 330 stores through 978 suppliers.
Work force of 155,000 steered by 48% female managers
Invested 1 billion for renewable energy and climate actions

4. Value Chain Analysis


Value chain is a tool developed by Michael Porter. Porters definition includes
all

activities

to design,

produce, market, deliver,

and support

the

product/service. The value chain is concentrating on the activities starting


with raw materials till the conversion into final goods or services.

Value chain is divided into two categories:


Primary Activities (operations, distribution, sales)
Support Activities (R&D, Human Resources)

According to the type of organization Value Chain is categorized into 2


types;
Manufacturing Based
Service Based

Here, we are talking about IKEA so we keep our focus on its Manufacturing
based value chain only.

4.1 Primary Activities


Primary Activities of IKEA are those that are involved in the creation, sale
and transfer of products (including after-sales service). This includes
following process:
1. Inbound Logistics
IKEA is associated with purchasing raw materials from 1002 suppliers
located in 51 countries globally and relationships with supplier are
maintained via 42 trading offices around the world. IKEAs supply chain
management is one of its solid sources of competitive advantage. Each IKEA
store is massive and has more than 9,500 product range and about 20-25%
of employees in each store deal with logistics.
Do-It-Yourself assembly principle for many IKEA products lowers the cost of
packaging and makes inbound logistics easier to facilitate.

Value created
Respond to store-level inventory reorder points and reorder stocks.
Ensures that IKEA is ready to meet customers demand, lowering the
cost of lost sales.
It ensures an efficient flow of stocks.

2. Operations
There are 315 IKEA Group stores located in 27 countries and IKEA Group
operates in more than 40 countries globally. 59% of manufacturing takes
place in Europe. The table below, illustrates the numbers of stores,
purchasing value, the numbers of distribution centres and production units in
each region the company operates.

Europe

Number of

Asia

Russia

North

South

America

America

Australia

222

23

14

51

59%

35%

3%

3%

1%

20

36

stores

Purchasing
value

Distributio
n centres

IKEA
Industry
production
units

IKEA global retail, distribution and production


Table adapted from Yearly Summary 2014, IKEA Group

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IKEA business is divided into three Franchise, Property and Finance


divisions, with Franchise Division being the core of the business. IKEA
follows de-centralization business strategy in running its global operations.
According to this strategy, regional managers are granted decision-making
autonomy taking into account unique aspects of their markets, local culture,
patterns of local consumer behaviour and other region-specific factors.
Value created
Combine retail and warehouse process
Customers browse items at showroom floor and then obtain product
from lower rack at pallet location.
Product refilled from higher/ reserve rack after shopping hours.
Cost per touch inventory tactic
IKEA minimizes touches by reducing process of shipping moving and
loading of product.
Customers select the furniture, retrieve the packages themselves and
take it home --> cost saved.
Employs automatic storage and retrieval systems to drive down costs
per touch.

3. Outbound Logistics
IKEA operates 34 distribution centers and 13 customer distribution centers
in 17 countries. Customers are responsible for costs associated with the
transportation of goods purchased from IKEA stores. The company offers
two types of delivery services. Parcel delivery is a service to delivery small
items weighting up to 25kg and the company charges around $ 12
depending on the location of the specific store. Truck delivery, on the other
hand, is made for purchases exceeding 25kg and IKEA charges starting from
approximately $ 50 for truck delivery. The delivery for goods purchased
online is done free of charge.

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Value created
Do-it-yourself concept
Most IKEA furniture is made and sold in pieces for the customer to
assemble.
It takes up less space in warehouse allowing for more room to stock
additional items.
It takes up less room in trucks, maximizing the no. of items that can
be shipped low cost transport.
Using such techniques in saves in fuel and stocking cost, so it can
deliver products at low cost to customers.

4. Marketing and sales


IKEA relies in its catalogues extensively for marketing and sales, as more
than 200 million catalogues are printed each year globally. Online sales
channel is also extensively utilized by the company and IKEA catalogue app
was opened 46 million times during FY2014. IKEA online sales is established
in 13 out of 27 markets and during the FY2014 IKEA.com had more than 1.5
billion visits. Additionally, IKEA uses print and media advertising, sales
promotion, events and experiences, public relations and direct marketing
techniques in an integrated manner.

Value created
Market Hall Concept
Market hall comprises of lots of inspiring ideas and furnishing in
realistic room settings where customers can try out furniture.
Market hall gather items according to categories and enables
customers to easily compare and choose.

5. Service
Service as one of the primary activities in the value chain is addressed by
IKEA via a standard set of techniques and practices such as the provision of
online and telephone customer services, offering refunds and exchanges of
goods whenever relevant and encouraging customers to provide feedback.
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IKEA is not famous for the provision of a superior customer services and this
situation may have resulted from the aggressive pursuit of cost-cutting
initiatives according to cost leadership business strategy. An open letter
addressed to IKEA CEO Peter Agnefjll titled
Dear IKEA: Your Customer Service Is Terrible written by best-selling
author and keynote speaker Bernard Marr on March 2014 sheds a light into a
range of customer services issues the author had to deal with when
purchasing white BIRKELAND bed for his eight-year old daughter. These
issues include late delivery, the delivery of wrong parts, failure to collect
parts that do not belong to the purchase and communication issues. The
open letter has attracted 718 Facebook likes and 378 comments, thus
causing a substantial damage to the brand image.
Value created
IKEA provides range of services to provide to their customers. Some are:
IKEA family loyalty card.
Financial Services like 0% Instalment Payment Plan
100 day return Policy
Delivery, Assembly and Installation Services
Planning tools and consultation etc.

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4.2 IKEA SUPPORT ACTIVITIES


FIRM INFRASTRUCTURE
Hierarchical organizational structure
Public Affairs Press Releases, Product Recalls
IKEA Supplier Quality Assurance
IKEA of Sweden lmhult, Test laboratory
Product testing during product development to assure safe and healthy
IKEA products (Jobett, 2015)
Finance Division to manage financial assets and group liquidity
(Inter-IKEA, 2012)

HUMAN RESOURCE MANAGEMENT

High level of commitment to HR practices


Effective staff training and development programs
Concerned with gender balance in leadership positions
Bonus incentives for employees to reach goals
Recruitment in every country where IKEA has markets

TECHNOLOGY DEVELOPMENT
Research and development activities are initiated in Sweden
Extensive use of information technology in business processes
IKEA is a global company that is constantly developing. IKEA IT
supports this development by providing solutions that keep the flow of
information efficient.
In order to make products saleable and right for the IKEA identity,
IKEA co-workers in product design and product development focus on
price and quality, design and function, environment and health.
They scrutinise every product idea with regard to the best use of raw
materials and manufacturing opportunities. This is why elements of the
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design are often decided on the factory floor, where designers and
manufacturers work together

PROCUREMENT
IKEA suppliers and good relationships with them are among our greatest
assets.
Purchasing teams are located around the world and work with suppliers in
more than 50 countries. They finding new suppliers and evaluate and
develop existing ones.

Together, purchasing teams ensure optimal production conditions,


capacity, product quality and availability.
They also actively support suppliers in their work to improve working
conditions and minimise negative environmental impact.

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5. HISTORY OF IKEA
1943 -IKEA is founded by Ingvar Kamprad
When Ingvar Kamprad is 17, his father gives him
money as a reward for succeeding in his studies. He
uses it to establish his own business. The name IKEA
is formed from the founder's initials (I.K.) plus the
first letters of Elmtaryd (E) and Agunnaryd (A), the
farm and village where he grew up. IKEA originally
sells pens, wallets, picture frames, table runners,
watches, jewellery and nylon stockings - meeting needs with products at
reduced prices.
1945-The first IKEA advertisements appear
Ingvar Kamprad's business outgrows his ability to
make individual sales calls, so he begins
advertising in local newspapers and operating a
makeshift mail-order service. He uses the local
milk van to deliver products to the nearby train
station.
1948-Furniture is introduced into the IKEA range
The furniture is produced by local manufacturers in the
forests close to Ingvar Kamprad's home. The response is
positive and the line expands.
1951-The first IKEA catalogue is published
IKEA founder sees the opportunity to sell furniture on a larger scale using a
catalogue. The IKEA catalogue that we know today is born.
1953-Furniture showroom opens in lmhult, Sweden
This is an important moment in the development of the IKEA
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concept - for the first time customers can see and touch IKEA home
furnishings before ordering them. The showroom is born out of a price war
with a main competitor of IKEA. As both companies lowered prices, quality
was threatened. By opening the showroom, IKEA clearly demonstrates the
function and quality of its low-price products. The innovation is a success;
people wisely choose the products with the best value for money.
1956-Designing
furniture
for
flat
packs
and
self-assembly
The decision for IKEA to design its own furniture stems,
ironically from competitors pressure for suppliers to boycott
IKEA. Exploration of flat packaging begins when one of the
first IKEA co-workers removes the legs of the LVET table so
that it will fit into a car and avoid damage during transit.
After this discovery flat packs and self assembly become part of the concept.
1958
The first IKEA store opens in Sweden
The first IKEA store in lmhult has 6,700 square metres of
home furnishings! At the time, it is the largest furniture
display in Scandinavia.
Gillis Lundgren designs the TORE drawer unit
While visiting an IKEA kitchen manufacturer, one of the earliest co-workers
at IKEA, Gillis Lundgren, notes the simple, practical storage ideas being used
in IKEA kitchens and is inspired to apply the same thinking throughout the
home. As soon as he gets back to lmhult he sits down and designs the
TORE drawer unit.
1960-The first IKEA restaurant
The first IKEA restaurant opens in the IKEA store in lmhult, Sweden.

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1961GLA chair on sale


The GLA cafe chair is launched with the IKEA concepts of form, function
and price in mind. Today it is made of composite plastic for a modern look.
Product testing begins
IKEA begins quality testing its products using Swedish testing standards. To
read more, please visit Products and materials.

1962-Marian Grabinski designs the MTP bookcase


The MTP bookcase is a contemporary classic and will see numerous
imitations over the years. Developing this and other wooden products
develops strong relationships between IKEA and Polish suppliers during the
1960s. These relationships continue today and are an important reason for
IKEA maintaining low prices so that the many people can afford them.
1963-IKEA arrives in Norway
The first IKEA store outside Sweden opens in Oslo.

1965-Largest IKEA store opens in Stockholm, Sweden


Thousands of people queue for the opening of the 31,000 square metres
flagship store, IKEA Kungens Kurva. The store has a circular design, inspired
by New York's Guggenheim Museum. The store's success leads to the
opening of a self-serve warehouse - an important part of the IKEA concept is
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born. Additionally, Accenten is opened, where customers can buy quality


cooking items at a low price.

1968-Particleboard makes its mark


This inexpensive, hard-wearing and easy-to-process material is a natural fit
for IKEA. In 1969, the PRIVAT sofa is designed by architect ke Fribryter. It
has a particleboard base with a white lacquer finish and brown floral
cretonne covers by textile artist Sven Fristedt. The straight lines,
no-nonsense practicality and unbeatable low price are a tremendously
successful combination.

1969-IKEA arrives in Denmark


The first IKEA store opens in Copenhagen.

1973IKEA arrives in Switzerland


The first IKEA store outside Scandinavia opens in Zurich.
Denim used for furniture
TAJT, a multifunctional seat/recliner, is one of many good examples of how
IKEA sometimes does things differently. By using a low-cost raw material
from another industry, in this case denim, a hard-wearing and low-priced
product is created.
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1974SKOPA chair raises eyebrows


Choosing a manufacturer for the SKOPA chair, designed by Olle
Gjerlv-Knudsen and Torben Lind, is wonderfully simple, even if it raises a
few eyebrows. SKOPA is developed by a supplier that usually makes plastic
buckets and bowls, creating a chair in which form and function are not
compromised by an unorthodox solution.
IKEA arrives in Germany
The first IKEA store opens in Munich. The success in Switzerland paves the
way for a rapid expansion into Germany, which today is IKEA's largest
market.

1975-IKEA arrives in Australia


The first IKEA store opens in Sydney.

1976POEM is launched (later known as PONG)


Another IKEA classic is born, the comfortable armchair POEM made of
laminated wood, which will later evolve into PONG.
he Testament of a Furniture Dealer
T
Ingvar Kamprad writes The Testament of a Furniture Dealer and in 1976 it is
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published - it documents IKEA's vision and business idea and has a strong
influence on the development and vitality of IKEA's culture.
IKEA arrives in Canada
The first IKEA store opens in Vancouver.
1977-IKEA arrives in Austria
The first IKEA store opens in Vienna.

1978-BILLY bookcase is born


The BILLY bookcase is introduced into the range - an IKEA classic.
1979-IKEA arrives in the Netherlands
The first IKEA store opens in Rotterdam.
1980KLIPPAN sofa - another IKEA classic
The KLIPPAN evolves into a sofa tough enough to stand up to the kind of
punishment only children know how to dish out, yet soft enough to fall
asleep on during long bedtime stories. The entire cover can be removed for
machine washing.

LACK table arrives


This low-priced, functional coffee table is made with a technique that is
normally used for interior doors, making the table very strong and light. This
sandwich technique is called board-on-frame and will be used in many IKEA
products in years to come.

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1981-IKEA arrives in France


The first IKEA store opens in Paris.

1982LACK range is extended


To complement the LACK table, LACK shelves are designed.
IKEA Group is formed
The IKEA Group is formed and its owner is a foundation, the Stitchting
INGKA Foundation, which is based in the Netherlands.

1984IKEA FAMILY is launched


IKEA FAMILY, the new customer club, is launched. Today, IKEA FAMILY is in
16 countries (over 167 stores) and has about 15 million members.
KEA arrives in Belgium
I
The first IKEA store opens in Brussels.
STOCKHOLM range of furnishings appears
IKEA designs a series of high-quality furnishings using some well-loved
materials - birch wood, leather and cretonne. The range has everything you
22

would expect of high-quality classics, except the high price tag. STOCKHOLM
is a winner of the Excellent Swedish Design award.

IKEA catalogue numbers increase


The IKEA catalogue print run expands to 45 million copies, in nine
languages.

1985IKEA arrives in the USA


The first IKEA store opens in Philadelphia.
Our co-workers
IKEA now has 10,000 co-workers and 60 stores in the IKEA Group.
MOMENT sofa is designed by Niels Gammelgaard
When IKEA looks for a suitable manufacturer, visits to a supermarket-trolley
factory prove successful in utilising knowledge of strength and stability. IKEA
takes this as a starting point to create a stylish, comfortable and low-priced
sofa with a modern look. The matching table, designed in 1987, wins the
Excellent Swedish Design award - something few supermarket trolleys can
boast of.

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1986-New president and CEO


Ingvar Kamprad retires from Group Management to become an advisor to
the parent company INGKA Holding B.V. Anders Moberg becomes President
and CEO of the IKEA Group.
1987-IKEA arrives in the UK
The first IKEA store opens in Manchester.
1989-IKEA arrives in Italy
The first IKEA store opens in Milan.
1990The first environmental policy at IKEA
The IKEA Group develops an environmental policy to ensure that the
company and its co-workers take environmental responsibility for all
activities conducted within its business.

IKEA arrives in Hungary


The first IKEA store opens in Budapest.

1991IKEA arrives in the Czech Republic and Poland


The first IKEA store in former Czechoslovakia opens in Prague. The first
Polish IKEA store opens in Poznan.

Swedwood the industrial group of IKEA


IKEA acquires its own sawmills and production plants and establishes the
industrial group Swedwood to produce wood-based furniture and wooden
components.

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1993-IKEA and FSC


The IKEA Group becomes a member of the global forest certification
organisation Forest Stewardship Council (FSC).
1994-MAMMUT
Daring to be different. A whole furniture series for children is introduced that
not only meets the demands of wild childish imaginations, but also stands up
to the wildest of children's games. All the products are made of tough,
resilient materials and have rounded corners for safety.

1995-The first IKEA PS collection is launched


Launched at the same time as the Furniture Fair in Milan, PS stands for
POST SCRIPTUM, or the latest additions to the world of IKEA design. The
IKEA PS collection is one way of sharing the design values IKEA has form
and function at a low price. IKEA PS gives designers free rein to shape the
latest creations, where the aim is to create products that are emotional, fun
and less predictable, appealing to those who prefer an individual taste to a
common style.
1996-IKEA arrives in Spain
The first IKEA store opens in Madrid.
DAGIS kids chair by Richard Clack is born
Richard Clack obviously takes a long, hard look at kids before he designs this
chair. Children do not have sharp corners, they are fairly soft but can stand
up to a little rough and tumble now and again. So he designs his chair to suit
the needs of children with one little improvement - the chairs come in
stackable versions to save space and make moving them easier.
1997IKEA on the web
The IKEA web site www.IKEA.com is launched.
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Children's IKEA is launched


IKEA offers furnishings for the entire family, but because kids are the most
important people in the world, IKEA decides to develop a range specifically
for them. We work with many experts to develop products that are good for
the development of kids' co-ordination skills, social skills and creativity. The
products we launch in 1997, and continue to sell today are chosen by the
most important experts: kids themselves. Even our stores take care of
children's needs by providing play areas, children's room settings, baby
areas and special meals in the restaurant.
Children's IKEA

IKEA 365+ for all the days of the year


The IKEA 365+ range is launched - a range of functional, attractive everyday
products for preparing, cooking, serving and eating food. The products are
designed to make kitchen work easier and more enjoyable, at the same time
bringing a little more beauty into everyday life with their form and colours.

1998IKEA arrives in China


The first IKEA store opens in Beijing.

The first forestry manager is employed at the IKEA Group


IKEA employs its first forestry manager to work fulltime with securing
sustainable use of forestry resources. To read more, please visit Forestry.

1999
Our co-workers and stores
The IKEA group grows to 50,000 co-workers and has 158 stores in 29
countries. For current figures, please visit Facts & figures.
26

A new President and CEO


Anders Dahlvig becomes President and CEO of the IKEA Group, taking over
from Anders Moberg.
The Big Thank You event
The unique Big Thank You event on 9 October 1999 is a millennium reward
for the many co-workers within the IKEA Group. The total of all sales on this
special day, worldwide, is divided among all co-workers - in total about
84.85 million euros. It is a great way to thank hard-working IKEA
co-workers for contributing to the company's ongoing success.
Improving education in Kosovo
The IKEA Group donates funds to UNICEF and Save the Children to assist in
the re-building of schools, the provision of educational materials for children
and the special training of teachers in war-torn Kosovo.
IKEA wins international award for VRDE kitchen
VRDE is a new way of thinking about kitchens. Its unique modular design
allows customers to create an entire kitchen from scratch or simply add a
piece here or there. The innovative design, functionality, ergonomics,
ecological compatibility and durability combined with attractive design, helps
VRDE win the Red Dot Award for Highest Design Quality, which is organised
by Design Zentrum Nordrhein Westfalen in Germany.
2000IKEA arrives in Russia
The first IKEA store opens in Moscow.

A code of conduct is launched


The code of conduct called The IKEA Way on Purchasing Home Furnishing
Products (IWAY) is launched. It defines what suppliers can expect from IKEA
and specifies what IKEA expects from its suppliers in terms of legal
requirements, working conditions, active prevention of child labour, external
environment and forestry management. In addition to this, IKEA also
introduces The IKEA Way on Preventing Child Labour to ensure that no child
labour is used by our suppliers or their sub-contractors.
Child rights project in India
The IKEA Group, in co-operation with UNICEF, initiates a broad community
27

programme in northern India to address the root causes of child labour. The
project includes 500 villages and will benefit more than 1 million people,
providing more than 80,000 children with an opportunity for an education.
At, present, the project covers a range of initiatives, such as providing
alternative learning centres, health and nutrition, education, empowering
women and forming women's self-help groups.
IKEA customers can shop online
E-shopping is launched in Sweden and Denmark. Since then many other
markets have started offering online shopping at IKEA.

2001IKEA Rail begins


The IKEA Group trials running its own rail operations through IKEA Rail AB.
The train runs five round trips a week between lmhult, in Sweden, and
Duisburg, in Germany. In 2004 rail operations are taken over by an external
company, with IKEA continuing to use this route. The use of rail continues to
be an important part of the IKEA strategy to promote sustainable
transportation of IKEA material and products.

Another innovative product


IKEA becomes one of the first manufacturers to produce furniture with
patterns produced directly on fibreboard and particleboard, in a factory in
Poland. This technique is called print-on-board.
Anders Dahlvig speaks at a Greenpeace conference in London
IKEA has a long tradition of co-operating with different NGOs such as
Greenpeace, a co-operation which started in 1991. Over the years, this has
helped IKEA phase out the use of bleach for printed materials, the use of
PVC in products, as well as working towards protecting natural intact
forests.
A new head office for the IKEA Group
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The IKEA Group moves its head office from Humlebaek in Denmark to Leiden
in the Netherlands.

2002IKEA recovery is launched


A new product-recovery concept is implemented in more than 100 IKEA
stores in Europe to ensure that returned products are, where possible,
repaired instead of being wasted.
The IKEA and WWF Co-operation on Forest Projects
In 2002, the global conservation organisation WWF and the IKEA Group join
forces to promote responsible forestry in priority regions around the world.
The two organisations initiate a series of global and regional forest projects
to support the development of responsible forestry.
2003-The fourth IKEA PS collection is launched
The focus is on innovative products with the specific ambition to inspire
children to play and enjoy physical activity. The range also includes the
successful IKEA PS BRUM soft toy. During 2003-2004 customers help to
raise more than 2.1 million euros by purchasing a PS BRUM soft toy at an
IKEA Group store. These funds are donated to UNICEF projects for children
in Angola and Uganda.
2004IKEA arrives in Portugal
The first IKEA store in Lisbon.

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First environment report


The IKEA Group publishes its first Social & Environmental Responsibility
Report. It is launched on the web and gives information as well as facts and
figures.
The 200th IKEA store opens
The IKEA New Haven store in the US is the 200th IKEA Group store
worldwide.
2005Everything for the bedroom under one roof
A complete and co-ordinated collection of bedroom furnishings is launched,
including everything from mattresses to smart storage solutions and textiles
for all tastes.
IKEA expands its focus to kitchen solutions
IKEA wants to make life in the kitchen easier, after all it is one of the
most-used rooms in the house. So IKEA looks into all the ways life in the
kitchen can be more fun. The result is a wide range of co-ordinated kitchens
and dining furnishings that make kitchen life easier.
IKEA customers help children in need
Customer purchases of IKEA soft toys help raise funds for UNICEF and Save
the Children projects focussing on children and their welfare. This yearly
campaign has to date raised a total of 4.8 million euros.
The fifth IKEA PS collection is launched
What if the wildest ideas become the wisest solutions? The fifth IKEA PS
collection is launched under the headline 'What If...?' Twenty-eight designers
develop a range in which innovation is the key word for materials, design,
function and techniques. The range includes everything from rugs with
hinges and pillows for your feet, to t-shirt-shaped cushions and rocking
dining chairs made from wooden plastic.

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IKEA and WWF co-operate on cotton cultivation


IKEA is working together with WWF to promote better methods of cotton
cultivation. About 2,000 farmers in Pakistan are being trained in Farmer
Field Schools. In 2006, the cotton cultivation project expands to India,
where 500 farmers are being trained. The discovery-based learning process
encourages the farmers, some of them illiterate, to adopt more sustainable
cultivation practices that serve as a good example to others in the region..

IKEA gives in-kind donations


Schools in Liberia and Burundi receive 9,000 tables each for a UNICEF school
project. After the tsunami, IKEA gives UNICEF an in-kind donation of
125,000 bed sheets, 100,000 quilts, 18,000 blankets, 145,000 toys and 300
mattresses to help victims in Indonesia, Sri Lanka and India.
IKEA Social Initiative
An organisation called IKEA Social Initiative is formed to handle global
community involvement through its partnerships with Save the Children and
UNICEF.
2006IKEA arrives in Japan
After previous explorations of Japan with a joint venture in the 70s, the IKEA
Group opens its first fully-owned store in Tokyo.
co-workers
The IKEA Group exceeds 100,000 co-workers and operates in 44 countries.
Preventing illegal logging
The IKEA Group and WWF join forces to curb illegal logging in Russia and
reward legal forestry in Russia and China. WWF Russia is actively
participating in government working groups to find solutions to illegal
logging on the national and regional level. For example, regional anti-illegal
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logging brigades receive technical assistance to conduct monitoring and gain


control over logging activities.
IKEA Group donates quilts to Pakistan earthquake victims
The Pakistan earthquake in October 2005 leaves many people in a desperate
situation. Over 335,000 IKEA quilts are donated to UNICEF and their efforts
to help improve the living conditions of the survivors.
IKEA Food is launched
IKEA launches its own food label covering about 30 percent of the 150
products in its food range. The range focuses on high-quality food products
based on Swedish recipes and tradition, for a low price. The products have
an IKEA label and are sold in Swedish Food Markets in IKEA stores and are
also served in IKEA restaurants.

2007IKEA and WWF Co-operation on climate change


The IKEA Group and WWF start to co-operate on projects aimed at reducing
emissions of greenhouse gases generated by IKEA operations. The
agreement covers improving energy efficiency and the use of renewable
energy at IKEA suppliers, and developing sustainable customer
transportation to and from IKEA stores.
The most international IKEA store
IKEA Haparanda opens the most international IKEA store yet. It is uniquely
placed on the border between Sweden and Finland and a catchment area
that also includes Russia and Norway.
2016IKEA Group,announces its plans to open 25 stores over next 10 years in
India.

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6. CONCLUSION
Given the success of IKEA as a global brand, improved performance levels
can be achieved through closely examining it's external and competitive
environment that in turn enables the firm to make most out of available
opportunities. The analysis identifies that a proactive and dynamic approach
is adopted by IKEA to maintain its competitive edge however transforming
its weaknesses into strengths can further strengthen the brand. With an aim
to add further value to its value chain, IKEA has immense opportunity to
establish a stronger relationship with its customers. IKEAs focus on VALUES
and SOCIAL RESPONSIBILITIES has made it one of the most respected
brands in the world. IKEAs foray into emerging markets like India is bound
to be success where demand is cost driven.

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