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IKEA CASE STUDY

COMPANY OVERVIEW:

COMPANY NAME: IKEA (Ingvar Kamprad Elmtaryd Agunnaryd)


YEAR OF FOUNDATION: 1943
PLACE OF FOUNDATION: Agunnaryd, SWEDEN
FOUNDER: Ingvar Kamprad (30 March1926 – 27 January 2018)
NUMBER OF STORES: 422 (as on 2018)
NUMBER OF VISITORS:

 STORE VISITS: 957 million visitors


 WEBSITE VISITORS:2.5 billion visitors
SALES: 38.8 billion Euros (retail sales as on 2018)
CO-WORKERS: 2,08,000 members (as of 2018)
PRODUCT RANGE: 9500 home furnishing articles
NUMBER OF SUPPLIERS: 1220 Suppliers in more than 55 countries
IKEA FAMILY MEMBERS: 100 Million
LARGEST PURCHASING CONTINENT: Europe
LARGEST PURCHASING COUNTRY: China

VISION:
“Create a better everyday life for the many people”

BUSINESS IDEA:

"To offer 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"
IKEA LIFE STORY:

1920s

IK stared selling matches,


flower seeds, greeting
cards, pencils, ball point
pens….in Stockholm

1940s-1950s

IKEA started – 1943


furniture design, self-
assembly, advertising…

1960s-1970s

IKEA restaurant, product


testing, largest store in
Sweden….

1980s

Formation of IKEA
group, expansion in
Europe…

1990s

IKEA and FSC, launched


website, wins
international award…

2000s

Expansion, social and


economic projects
HIGHLIGHT POINTS:

 LOW PRICING STRATEGY:

 Using inexpensive materials.


 Minimising overall cost of production without compromising on quality.
 Usage of flat packaging.
 Optimising production potentials.
 Large Economies of Scale.
 Large volume production.
 Long term contracts with suppliers.
 Good Engineering assistance.

 AIMS:

 Double the sales every year.


 Increase train transportation.
 Usage of complete forest wood.
 To find best suppliers who can produce and design better at low prices.

 THISABLES:
This is an IKEA project that designed products for cripples and says “THIS ABLES”.
This took a step ahead in reaching their vision of creating a better living to many people. Some
of the products are

 Easy handle
 Glass bumper
 Mega switch
 Insider
 Couch lift
 Snap cup
 Friendly zipper etc.,

 Usage of normal flat packaging instead of coloured or attractive ones.


 Representing and respecting their mother country by using the flag colours (blue and
gold) for the brand name and logo and even some products are named in Swedish
language.
 Designs are light and modern.
 Stress on patterns, colours and textiles used.
 Design of furniture that can be assembled by customers according to their tastes and
availability of space.
 Supply chain strategy: mostly make-to-sock (MTS).
 Handling 1000s of its suppliers.
 Partnerships: World Wildlife Foundation (WWF)
Rainforest Alliance
 Layout of the mall…which makes someone to walk through all the sections of the store.
 Designs as per the tastes and preferences of the country in which the store is established.
 Store facilitates:
 Friendly assistance
 Special facilities to disabled like wheelchairs etc
 Car charging points
 Baby food and food warming stations
 Restaurant
 Play areas and nursing areas
 Customer service
 In some cases, IKEA store opening became a national event where customers from
different far places visited the store.

CONCLUSION:

 Ingvar Kamprad began with empty hands and ended as one of the top richest persons
of the world. His story made a history from farm life to flat-packaging.
 IKEA when undergone a 360-degree appraisal it might get good feedback from its
customers, suppliers, employees, management, social welfare and environment
protective organisations and even government.
 IKEA is so particular about each and every aspect of it from the point of leasing
equipment to the end of the suppliers in order to elevate the standards and reduce the
costs.
 The assembly required products are shipped in small containers, allowing the company
to get more boxes in vehicles, thus reducing trips, energy usage and emission.
 As IKEA is providing a wide range of readily available and easy assembly products,
customers have an ample choice within the store than going to some other for a desired
design. Thus, it is retaining its customers from going away.
 It is adaptable and tried to exhibit it in terms of changing the designs of its products in
different countries according to the culture and civilizations prevailed.
 As IKEA is the first one to be of its kind it is free from all the expectations, set standards
etc., and is reaping its fruits of being the first.
 The scope of expansion for IKEA is the rest of the world where it did not step in.

Submitted to Submitted by
Dr.K.Raghu Sir Mercy Sailaja Dasari
(188W1E0011)