IKEA Analysis 01/05/2018, 7*33 PM

IKEA Analysis

Table of content.
Questio Content Page
n
Number
1 How would you characterize the evolution of strategy 2
at IKEA? To what extent was it planed, and to what
extent was it emergent?
2 How would you describe the structure of the Swedish 4
furniture industry in 1950s? What were the implications
for the cost structure and customer responsiveness of
the typical Swedish furniture manufacturer and retailer?
Was a similar structure evident in other countries as
well? How did IKEA try to exploit this?
3 What generic business level strategy is IKEA pursuing? 6
What actions has the company taken at the functional
level to support this strategy? How does IKEA’s
organization and culture support this strategy?
4 What drove the international expansion of IKEA’s 9
stores? How would you characterize the company’s
strategy for competing in different national markets
across Europe? What were the advantages of this
strategy? Were there any disadvantages?
5 Why was IKEA’s initial entry into the United States not 12
as successful as its expansion across Europe? What
step did the company take to turnaround its American
business? What lessons can be learned from this?
6 How important are suppliers relationships to IKEA’s 14
success? How does IKEA manage its supply chain to
deliver on its strategic mission.

IKEA Analysis
Question 1: How would you characterize the evolution of strategy at IKEA?
To what extent was it planed, and to what extent was it emergent?

IKEA is one of the most successful global retailers in the world, which is enough to
talk about IKEA’s success. Behind every success business is a good strategy. What
is IKEA’s business strategy is such an interesting question, which was answered by
many researches and critical of many professionals. Overall, it can be seen that IKEA
have their own strategy: low-priced, elegantly design merchandise, good
quality. After entering furniture industry, IKEA recognized that they need change
themselves to meet customer needs. By displaying products in large warehouse that
located in wide area and far away from city center, finding out more suppliers, which
have cheap labor and good quality, IKEA enhances their competitive advantages
with competitors. Some of characterizes evidence that IKEA’s strategy was planned,
some others evidence that was emergent strategy.
First of all, understanding about planned strategy and emergent strategy is a key
point for characterize IKEA’s strategy. It also answers two questions which strategies

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are planned strategy and which strategies are emergent strategy. Henry Mintzberg’s
model about strategy development provides more encompassing views of what actually
is strategy. Planned str gies are intended activities before running a business.
“Emergent strategy are the unplanned responses to unforeseen circumstances.” (Hill,
C., W., L. and Jones, G., R. :2008).

Picture 1: Planned strategy and Emergent

strategy
(Sources: http://www.web-books.com/eLibrary/ON/B0/B58/031MB58.html
[http://www.web-books.com/eLibrary/ON/B0/B58/031MB58.html] )

Overall, it can be seen that many characterizes prove the evolution of strategy at
IKEA. Started by planned strategy, IKEA try to implements and faced with many
exceptions lead to unplanned strategy. All of planned strategies and unplanned
strategies join together help IKEA become one of the most successful global retailers
with very good vision.

Planned strategy + Realizing strategy = Vision

(Sources:http://www.emeraldinsight.com/journals.htm?
articleid=850943&show=html [http://www.emeraldinsight.com/journals.htm?
articleid=850943&show=html] )

Every company was born with a reason and target. IKEA had their own planned
strategies. Their first goal over time was to provide stylish functional designs with
minimalist lines that could be cost-efficiently manufactured under contract by
suppliers and priced low enough to allow most of people to afford buy their
products. (Hill, C., W., L. and Jones, G., R. :2008). According to Kamprad's theory,
IKEA try to make products with cheap price, flexible for everyone. On the way try to
cut cost of products, IKEA started exhibited and sold their products at their furniture
store in Sweden, cutting down retailers out of the equation and using their new
concept is self assembly, they also successes in cutting down the price by cutting
down the establish retailers outlets. Third, they expended Almhult warehouse
become their first store.
Turning to IKEA’s emergent strategy, they are very flexibility and creatively on the way
they fix problems. IKEA faced with damaged products problem during shipping
process in 1950s, which they realized it and reaction with problems by implement
flat-packed their products. It helped company reduce damaged products, it also
helped customers could customize their cost based on customize products. That is
the reason why self-assembly was integral into the IKEA's concept in 1956. By
1957, while tried to self-assembly their products and cut down the price, because of
established outlets claimed that IKEA try to copies their design to IKEA’s products,
they faced with their retailers tried to pressure furniture manufacturers not to sold
products to IKEA.

They solved these problems by trying to design more products in-house and looking
for manufacturers that could produce their design. After that, they expanded Almhult
warehouse became a first store where their customers could come and see how
IKEA setup their furniture. One of manufacturers they found was Poland
manufacturers with more than 50% cheaper compared with produce price in
Sweden. But they also faced with problem was that Almhult quite far away from city
center, so they solved it by opening a restaurant inside IKEA Almhult help people
could relax and refresh themselves while shopping. That solution became a good
strategy, which IKEA used to apply with every store. Another emergent plan was
self-service pick up solution. When IKEA faced with many lines of orders, which was

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unable to control, they accepted their customers access warehouse, pick up what
they want and assembly its. It become a culture of IKEA today.

Question 2: How would you describe the structure of the Swedish furniture
industry in 1950s? What were the implications for the cost structure and
customer responsiveness of the typical Swedish furniture manufacturer and
retailer? Was a similar structure evident in other countries as well? How did
IKEA try to exploit this?

First of all, understanding about fragmented industry and consolidated industry

is key to recognize which kind of Swedish furniture industry belongs. According to
Hill and Jones (2008) that fragmented industry is one managed by a large numbers
of small and medium companies. Its characterized by low barriers to entry, low entry
barriers permit constant entry by new companies, specialize customer needs require
small job lots and diseconomies of scale.

By 1950s, Swedish furniture was very expensive and liked a fragmented industry,
which dominated by small retailers (Hill, C., W., L. and Jones, G., R. :2008). That
means Swedish furniture industry didn’t have any big retailer which dominated
furniture industry. Small retailers ordered products from manufacturers, exhibited it
and sold it to customers with quite expensive price. With high power in Swedish
furniture industry, retailers together decided the market share, decided the priced for
the market. Basically, Swedish furniture market were low barriers to entry because
every company have products with good designs, high quality and attractive design
can enter market and gain market share and gain profit, increase competitive
advantages with competitors. Moreover, because potential needs was very high
while retailers can not provide enough good products for customers, means market
was huge and enough place for every company enter Swedish furniture industry.

Because of Swedish furniture industry was fragmented industry dominated by small

retailers lead to every companies and manufacturers in Swedish furniture industry
was lack of competitive advantages with competitors outside Sweden, it also
demotivate developments and evolution themselves. That was the reasons why
Swedish furniture was expensive in price, poor in design and low quality. Beside that,
Instead of evolution themselves, Swedish small retailers together fix high price, get
higher profit, while customers did not have much choice in furniture. In other words,
Western culture was inherited furniture from parents or relatives in the past. It was
the same every where on Europe. That made potential competitors also thought that
Swedish furniture industry was un attractive because very difficult for competition
with competitors that had already high powers with furniture industry. Even if enter
market success, profit might be low. Overall, it can be seen that Europe furniture
industry dominated by small retailers, lack of fair competition in 1950s. Small retailers
decide the market, the price while customers did not have much choice in design,
price and quality.

When Kamprad recognized the situations, he wanted to change Swedish and

Europe furniture industry by made modest furniture for everyone can choose their
own modest products. IKEA from potential competitor became new retailer in
Swedish furniture industry. IKEA concept was that their products not only good
quality, it also easily produce by machine which help reduce the price of assemble.
By followed that concept was motivate IKEA produce their products with high
quality, good design, cheap in price, easily for assembly. Specially, every customers
can buy everything relations furniture at IKEA store. For implemented that concept,
IKEA try to looking for manufactures with cheaper price, good skills in Europe
furniture suppliers by gone to many countries, used manufactures located in every
countries with supplier’s own competitive to gain their competitive advantages with
competitors. In 1950s, Poland manufactures produce many IKEA’s products with
good quality products, the price just less than 50% produce price in Sweden is a
typical things they did in the past and still continues until today. In other words, they
also always tried to design more products with many product lines for customers by

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designer team, build their own warehouse where customers can come, enter their
warehouse and choose what customers want for assembly.

With all things considered, before IKEA entered Swedish furniture industry,
customers did not have much choice when buy furniture because Swedish furniture
industry had just some retailers with poor design, low quality and expensive
dominated the market. After that, Swedish furniture industry got big steps with lower
cost, figured out attractive designs, improvements quality and so on. It was motivate
Swedish furniture increased their competitive advantages with others.

Question 3: What generic business level strategy is IKEA pursuing? What

actions has the company taken at the functional level to support this
strategy? How does IKEA’s organization and culture support this strategy?

Four generic business strategy including os t le ad e s ip s tr at eg y, f oc us ed

c os t le ad er sh ip s tr at eg y, d ifffeeren onn sttrateg y , focussedd
d i f f e r en tia
atiio n s trategy. A company follows cost leadership strategy means try to
do everything to reduce products cost by choosing low to moderate level
differentiation of product compares with their competitors, also ignores the large
numbers of market segments which company follows. The more number of market
segments, the more expensive for research, analysis, implements and manage
business. The more differentiation, the more increases cost structure. Focused cost
leadership strategy means try combine cost leadership strategy and focused
business level strategies in narrow products segments give customers cheap
products in narrow products segments. Differentiation strategy means pursues
business level strategy to make unique products, increase their distinctive with rivalry
products, bring new felling for customers. Focused differentiation strategy means try
combine differentiation strategy and focused business level strategies in narrow
products segments give customers distinctive products.

Following this theory, it can be seen that IKEA products are differentiated because
their products are different in design (good, nice and simple in design), convenience
in use and customization ability. But the level of differentiation is moderate because
IKEA concentrate on young design, good quality products, cheap price and
customizable. Specially, IKEA most concentrate in cost leadership. IKEA prices
always cheaper than their competitor’s because they always try to find the cheaper
suppliers with good skill for make good products all over the world, restructure their
form and find the convenience for customer’s customizable in limits way IKEA
supports help reduce the cost of warehouse, cost of inventory, cost of management
and so on. Beside that, IKEA also develop wide products lines for customers can
buy everything relations with furniture. Moreover, they make people not only buy
something they want with a little money, customers also pay more when shopping at
IKEA by diversification of IKEA’s products and customers can buy everything
relations with furniture at IKEA stores. Overall, IKEA follows cost leadership strategy.

Supporting for cost leadership strategy, IKEA do a lot of actions at functional level,
try to get all things: efficiency, quality, innovation and customer
responsiveness.

First of all, IKEA try to achieve superior efficiency by increasing their effective of
economic scale, learning effects, experience curve, flexible productions systems and
mass customization. By outsourcing good products from all over the world, it not
only helps IKEA reduce products cost because of cheap labor and inexpensive
materials from many other countries, also helps them study and adapts new
technology into their business. Moreover, they invested heavily in Swedwood plans,
equipping them with the most modern technology for help themselves and their
suppliers adapt new technology in business. For example, they trying to find
suppliers in Vietnam with cheap labor and inexpensive raw materials, they also help
Vietnamese suppliers IKEA’s technology and knowledge for enhance Vietnamese
supplier’s quality and cheap raw materials. Beside that, by always try bring to

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11 dấu hiệu cho thấy mộ…
Mải nhìn Hy Lạp, thế giới…
customers cheap products with good quality, IKEA always try to find out more
suppliers for increase their competitive advantages and power with their suppliers. It
pressure to supplier always try to reduce cost, increase competitive with their
competitors. As the result, this strategy support IKEA reduce products price, also try
maximize their customization ability, support customers more choices.

Vietnam Property Views …
How To Become … 2
How to spot a fake Tag …
Secondly, because of IKEA strategy is that always try provide for customers good
products with high quality and cheap prices, so IKEA always invest money in
research and develop new technology, finding out better suppliers, help suppliers
adapt new technology in business, redesign IKEA products every year for more
convenience, IKEA gain their mission is that products with high quality, cheap price,
nice design.

Vietnam macroec… 1 Third, by spend more money and time on research, design and marketing, IKEA
always try to find out customers requirements, try to understand what is customers
Review the financial healt… needs, what is the trends. Every time, they always try to introduced new designs in
every product lines, bring the innovation to their customers.
Learning Journal
Fourth, by do all things above, understand customer needs, IKEA supply for their
customers customization ability by come to IKEA warehouse, collect the materials
Tien Nguyen's
Global Financial C… 1
Blog
which is customer needs to adapt its together become a product. Moreover, IKEA
search

also send messages to their customers that IKEA serve their customers with highest
1
ClassicMoney market an…
Flipcard Magazine Mosaic
ability Sidebar
by alwaysSnapshot
try reduceTimeslide
cost, provide attractive design, design stores layout
reasonable, try located their stores near public transportation help customers easier
Private Equity Investment…
transport and so on. IKEA really got the loyal customers by make them happy in
everything.
Black-Scholes model for …

Everything happens for a reasons including IKEA’s actions. It is undeniable that

UWA plc and Zombie an… IKEA’s organization and culture are support their strategy to get success in business.
By using informal style, non hierarchy and team based, IKEA motivate their
Compass Record… 3 employees more creatively, dynamic and self-confident on their own business and
company’s business. In addition, every employee and their family as are members in
Nike Inc., analysis… 5 IKEA family, they have been able to do everything together such as picnic at
weekend, hang out together in vacation and so on. In other words, because of
Financial and non-… 1 Kamprad worried about what would happens to IKEA when his die, so he didn’t
want his sons inherit the business. He worry that they may be unable to control

1 company, may lead to be unable to serve customers, bankrupt or sell IKEA to

IKEA Analysis
Analysis Wynn Re… 1
Employee Motivati… 1
CASE STUDY: GLENGA…
Something about charity.
others, so Kamprad find two foundation to supports for company’s business. With
this two foundation, its together with Kamprad manage IKEA’s business and manage
company when he died. Moreover, IKEA’s culture is that not only a IKEA business, it
is also about serving people by their products and service. Profit is not a first priority
for run their business, their first priority when run business is to serve people, so they
know customers are everything they have, they love their customers. That is the
reason why IKEA always try to supports more for their customers including lower
price, good design, high quality products.

Charity trips Question 4: What drove the international expansion of IKEA’s stores? How
would you characterize the company’s strategy for competing in different
Hanoi, Vietnam national markets across Europe? What were the advantages of this
strategy? Were there any disadvantages?

Robbie Williams g… 3 Following theory about increasing profitability and profit growth through global
expansion of Hill and Jones (2008), at the most basic level, the popular way to gain
Attitude Is Everything! profit is global expansion, increase the market size of a company by: (1) expanding
the market: leveraging products, (2) realizing cost economies from global
Welcome and Policy volume, (3) realizing location economies and (4) leveraging the skill of global
subsidiaries. Moreover, by using maximum national competitive advantages from
each nations by analysis and using Michael Porter’s Diamond: factor endowments,
local demand conditions, responsiveness of supporting and related industry,
intensity rivalry, companies can increase their profit by using maximum resources

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with highest competitive advantages from many countries.

Understand the meaning and opportunities, at the beginning of started business,

Kamprad recognized is that not only Sweden market, Europe also had the same
problems that were: poor in design, expensive in price, dominated by small retailers.
It motivated Kamprad started IKEA's business. The more he developed the more he
knew that everywhere on the world had the same furniture situations with Sweden.
That really was a big opportunity for Kamprad to expand IKEA's market share and
gain profit, drove IKEA expansion their number of stores around the world.

IKEA map world

(Source: http://www.platform21.nl/page/3568/en
[http://www.platform21.nl/page/3568/en] )

According to Jones and Hill (2008): “By 1973, IKEA was the largest furniture retailer
in Scandinavia with nine stores. The company enjoyed a market share of 15% in
Sweden. Kamprad, however,Dynamic
felt thatViews theme.
growth Powered by Blogger.
opportunities were limited. Starting with
single store in Switzerland over the next 15 years, the company expanded rapidly in
Western Europe”. It can be seen that IKEA development their stores rapidly after
they recognized the reasons and opportunities when expanded stores on over the
world. The reason IKEA enter Western Europe market because the same in
Scandinavia, furniture market were largely fragmented and served by several
retailers, retailers dominated the market and decide the price, high cost structure
because high cost of manufacturing, serving, suppliers charge high fee, the number
of products not always ready for any orders and so on. That the reason why
products here were very expensive, poor in design, low in quality. This is big
opportunities for increased market share and gain higher profit by expanding the
number of stores in Western Europe. Because structure of Scandinavia and Western
Europe furniture are the same, customers responsiveness are the same, customers
needs are the same, IKEA match the same business model in Scandinavia into
Western Europe. With the rapidly developments in Scandinavia and Western Europe,
IKEA enhanced their profit.

UK and America is two others market with very specific and special properties. Even
enter these market means to increase market share and gain profit, but the different
belong to customer responsiveness, customer needs. IKEA still success by using
clever strategy for enter new specific market including UK and American. Overall, it
can be seen that IKEA following globalization strategy for gain huge profit by
increases their market share.

Even expanded rapidly the number of stores on over the world, IKEA still use very
clever strategy to enter in different market. Each market they have own strategy to fix
the problems about customer responsiveness in that market. For example,
Scandinavia and Western Europe had the same properties so they used the same
strategy to enter these markets. But when enter UK and American, they recognized
that not easy to come these market as they though, so they enter slowly step by
step and get successes by changing their design to adapt with customer
responsiveness here: bed were measured in centimeters, not the king, queen, and
twin sizes which are familiar with Americans. Sofas were not big enough, glasses to
small, curtains too short, and kitchen did not fit American-sized appliances and so
on. IKEA redesign their products for fit it with local demand, immediately, they got
success. Changed their self and get success in all over Europe is perfect evidence
that IKEA using different strategy in different national market across Europe.

By learned valuable experience when enter new market from enter United States
market, IKEA continued to expand internationally in the 1990s and 2000s. Because
Britain have Habitat did the same business as IKEA so IKEA used Mergers and
Acquisitions strategy to buy Habitat and use that brand for produce IKEA’s
products for Britain. Finally, by 2008, IKEA had 17 stores in United Kingdom.

Following globalization strategy, beside have many advantages but also have some

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disadvantages. First of all, following globalization strategy, IKEA can reduce cost by
using the same resources such as design, same structure, same business and so on
in many countries on the world. Usually, design always spend huge amount on this,
but when IKEA use one design for every countries, they increase consumption of
their products, reduce design price for each product, reduce price for products and
gain higher profit. In addition, using the same structure, same business, save a lot of
money for run new business with new structure by using their own experience in set
up, management, marketing, R&D and so on. Moreover, using globalization strategy
also help IKEA become international brand with very strong branding value. In other
words, its also can reduce the risk when one of the market have problems because
other market can support general IKEA business.

Beside many advantages when following globalization strategy, IKEA also have some
disadvantages. It is undeniable that following globalization strategy have huge risk if
have any problems even small problems with inside IKEA of environment. If IKEA
made any mistake even small inside company, it may lead to many important
mistake all over the world. For example, if IKEA do wrong research and design, they
lose their profit, and maybe lose all the customer over the world. In other words, if
environment have any change such as face with many strong rivalry, they may
bankrupt by unmanageable their business. In other words, because each of nation
have their own culture and customer responsiveness, so IKEA must spend more
money for customize and adapt with local customer responsiveness. Means spend
more money. Moreover, each country have their own competitive advantages, so the
more following globalization strategy, the more cost pressure from customers
because in some countries, IKEA products still more expensive than local brands
such as Vietnam, Indonesia, China.

Question 5: Why was IKEA’s initial entry into the United States not as
successful as its expansion across Europe? What step did the company
take to turnaround its American business? What lessons can be learned
from this?

In 1980s, IKEA recognized that expanding the number of stores over the world was
the best way to increase their market share and get higher profit by increased the
number of consumers. They decided opened store in Scandinavia, Western Europe
and American (United States). At Scandinavia, Western Europe, IKEA got wonderful
success but in United States they got big troubles and failed in first time entering this
market. It can be seen that IKEA had some mistakes when enter this market make
their business did not as successful as its expansion across Europe. These mistakes
was lack of analysis before enter U.S. market, specially about local demand
conditions and customer responsiveness.

By 1985, IKEA first time enter United States(US) market in Philadelphia, they decided
their first store must located in the coast because their research suggest that IKEA’s
customer in US more likely people who love travelled abroad, like fine food and wine,
these people concentrate on the coast. Even IKEA tried using their model which
success in Europe, they still not really going well in US. The company found that US
people have different customer responsiveness, culture and thinking from European:
Beds were measured in centimeters, not the king, queen or twin size which are
familiar with American. American sheets did not fit on IKEA beds. Sofas were not to
big enough, wardrobe drawer not deep enough, glasses too small, curtains too
short, and kitchens did not fit American-size appliances (Hill, C., W., L. and Jones,
G., R. :2008). In addition, IKEA didn’t know that U.S. people’s habit is that using big
glasses while they design small glasses. In other words, because of outsourcing
overseas too much with good products made IKEA faced with prices situations
when Sweden currency was strengthen U.S. dollar. That make IKEA less in cost
competitive advantages by high cost. Moreover, using smaller stores located in poor
address make U.S. IKEA less familiar with company’s stores in Europe, decreased
the attractive of customers with company’s products.

Facing with many problems, specially in design made IKEA must have emergent

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strategy take them turnaround its American market and with experience, knowledge,
company recognized some main problems need fix immediately. First of all, almost
products of company in U.S. were redesigned to fit with Americans needs. To
reduce cost, IKEA try to used lower cost sourced and dependency product’s value
by using dollar. It really interesting U.S. customers. Beside that, IKEA also started to
sources some products line in U.S for reduce transport cost.
Sensitively, IKEA know that American’s habit and hobby changing by the time, that
U.S. citizens more concentrate on design, changing their dinning room table about
1.5
times in lifetime, but something are shifting in American culture. Young generations
ready to spend more risk and get new experience in products (Hill and Jones: 2008).
Adapt with that changed, IKEA more concentrate in young generations and willing to
take risk such as students, single people over 20 and under 40, young married
couple with interesting and attractive advertising etc. Step by step, IKEA turnaround
their business success in American.
With all things considered, it can be seen that IKEA has been able to learn very
expensive lessons from their experience in the U.S market that are always remember
to spend more time and resources on researching, analyzing the local demand,
customer’s habit and customizing their business strategy and products for adapting
with local demand, local responsiveness to get success when enter new market.

Question 6: How important are suppliers relationships to IKEA’s success?

How does IKEA manage its supply chain to deliver on its strategic mission.

Appling Michael Porter’s Five Force model, we know that bargaining power of
suppliers are very important to success of a company, doesn’t matter that company
follows cost leadership or differentiation strategy. Company’s profit based on ability
to reduce cost, the differentiation in their products, the number of products was
sold. Specially, suppliers are very important with a company which follow cost
leadership strategy. Suppliers provide inputs for the company in the industry, which
have most powerful when industry have few substitutes, industry not important to
suppliers, buyer purchase large percentage of orders, buyers experience significant
switching costs, suppliers can threaten to enter industry (produce, supply own
products or buyers can’t threaten to make own inputs). Beside that, IKEA following
cost leadership strategy by always trying to reduce product’s price by trying to find
cheaper suppliers every time, adapt new technology to reduce cost, design and
redesign products as soon as possible etc. So it can see that suppliers is one of the
most important things supports IKEA reduce cost and gain huge profit. Illustration
that if suppliers are most powerful in perfect conditions, IKEA strategy is very difficult
to implements because they depend on suppliers, supplier decide the price of
services and inputs for industry. In other words, because the number of suppliers in
furniture industry are very much, suppliers always try increase their competitive by
cost and quality with their competitors, which motivate suppliers serve with highest
ability and quality, which lead to reduce the price for products or services. So, even
suppliers are very important, IKEA still have their own competitive advantage and
interdependent with suppliers. Beside that, analysis in furniture industry given that
industry have a lot of substitutes, industry really important with suppliers, buyer
purchase large percentage of orders. So in term of powers of supplier in this case
quite normal. In contrast, because people today have good experience in using
products, including experience significant switching costs. IKEA follow cost
leadership strategy means price for switching cost quite low, means suppliers
increase their power significant when their partner follows cost leadership. Overall, it
can be seen that suppliers are very important supports IKEA’s success.
Manage its supply chain to deliver on its strategic is one of many things which IKEA
need to do for gain profit. Manage its supply chain including manage locations,
transportation, inventory, information, production and supply.

Manage chain supply

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IKEA needs to manage supply chain for keep low-cost strategy and inventory in
warehouse. In term of manage its locations, IKEA always choose warehouse located
in good place (not located in center areas, wide areas) its never makes company and
customers worry about lack of place to introduce their products, never worry about
car park place. Turning to manage production and suppliers, because IKEA just
produce about 10% their products and approximately 90% is outsourcing, it may
contained risk inside because of unable manage change their products as soon as
possible if have any unexpected demands from market while they had already
contract with their suppliers and they can’t forcing their suppliers works faster. In
contrast, IKEA also have their own advantages when using this strategy in manage
their production and suppliers such as reduce risk in production by outsourcing.
Beside that, IKEA invested more in research in new technology, supports for their
suppliers adapt new technology. It’s not only help IKEA reduce cost, its also help
their suppliers increase competitive with supplier’s competitors and gain profit.
Because of outsourcing many good products from many countries on the world and
always try find suppliers in that location, IKEA really save a lot of cost in
transportations and reduce cost in manage transportation. IKEA manage their
inventory by predict ability the consumption of each market, so they try to provide
limits number of products for each market. But these strategy also have problems
because maybe some of market have unexpected demand, and some others
excessive but they can’t transport their products from this area to other areas
because the price of transportation is to high. To solve this problems, IKEA also try
produce limits products and put it in their stores by customers needs and they will
use dynamic planning for produce their products depends on local demands in
specific conditions by using analyze and research each specific market. By using all
of manage supply chain solutions, IKEA really get their success and gain their profit
increases every year.

Bibliography
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Posted 25th February 2012 by Tien Nguyen

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IKEA Analysis 01/05/2018, 7*33 PM

1 View comments

Unknown February 21, 2017 at 9:52 PM

Com foco na qualidade, inovação e atendimento ao cliente, o móvel
planejado df é uma empresa séria com total interação com seus clientes.
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