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Business strategy of IKEA
The introduction of ikea
Business strategy of IKEA
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Brief background of Ikea and its environment
A young Sweden entrepreneur Ingvar Kamprad founded IKEA in 1943. With the age of 17, Kamprad turned his business into a mail order operation selling a variety of household products, particularly furniture. Kamprad with his strong entrepreneurship started the first IKEA showroom/store in 1953 in Sweden.
IKEA main strategy was to design functional furniture that was easy and inexpensive to build, receive it disassembled at stores, and display it on the show room floor with detailed explanation ticket to abolish traditional salesperson assistance. Staffs were available for enquiries, but the customers could freely select between orders, pick up, transport and assemble their own selections. In fact, this strategy creates a mutual beneficial between Ikea and customer. Ikea
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He was once quoted as saying that “maintaining a strong IKEA culture is one of the most crucial factors behind the continued success of the IKEA concept (Ikea, n.d.).” In this level, Ikea’s culture can be understand from what people can see, hear and feel.
According to Smith (2012), IKEA was featured in Fortune for the awards of “100 best company to work for” and “100 best companies for working mothers”. In fact, being listed in the award indicated IKEA’s is a very ideal place to work. The result of the awards was actually generated from the questionnaire distributed to more than 252,000 employees within 257 firms (PwC, 2014). At the same time, the award of “100 best companies for working mothers” shows IKEA’s concerns about the employees’ commitment to family. As a result, many “co-worker” have expressed positive feedback regarding to the work culture in Ikea (Smith,
Lowe’s tries to foster collaboration and strength in a variety of methods; many are through leadership training tracks and supporting employees and their families. During times economic uncertainty, it is important that individuals know that they an organization that cares and supports them. In a comprehensive report released by Lowes, the company detailed improvements Lowe’s achieved in important focus areas, including the health, safety and engagement of employees, the company’s advancement towards its 2020 goals and its partnership with suppliers to maintain the highest ethical standards and improve the products it sells (Lowe’s Companies, 2015a). According to Lowe’s Companies (2015a), “For the first time in Lowe’s annual Employee Opinion Survey, all of its U.S. stores, distribution centers and customer support centers all reached the company’s benchmark engagement goal of 65 percent, indicating a highly engaged and satisfied staff” (para 4).. “Career Bliss recognized Lowe’s as one of the 10 happiest retailers to work for in 2014” (Lowe’s Companies, 2015, para 5). To keep an organization running efficiently and effectively, you need a good customer base; you cannot achieve this without helpful, courteous and willing employees. Lowe’s understand that to keep up in the industry, they need to ensure they employees are taken care of
The 3 percent decline in sales causing a 21 percent decline in profits can be attributed to the identification of the accounting concept of operating leverage. Operating leverage is what business managers apply to boost small changes in revenue into sizable changes in profitability. Fixed cost is the force managers use to attain disproportionate changes between revenue and profitability. Therefore, when all costs are fixed every sales dollar contributes one dollar toward the potential profitability of a project. Once sales dollars cover fixed costs, each additional sales dollar represents pure profit. A small change in sales volume can significantly affect profitability (Edmonds, Tsay, & Olds, 2011). So, therefore, if sales volume increases,
14. Chapter 9: Corporate Stock 15. Chapter 10: Competitor strategy 16. Chapter 11: Corporate Strategy 17. Chapter 12: The corporate culture of Home Depot 18.
Ingvar Feodor Kamprad, as we know him the owner the giant home furnishing retail chain IKEA was born in march 30, 1926 on a farm which called near a small village of Agunnaryd, Smaland Sweden. In his teen ages he used to peddled matches, fish, pens, Christmas cards and other items by bicycle as a teenager. He bought matches in bulk from Stockholm and sold them in his town with reasonable prices but he still could make good money.
First, in relation to the organization’s most important asset, people, Sears has failed to recognize the distinctive competences that lie in the skills and abilities of their own employees. Sears once was a very successful organization in relation to how they treat their employees. Sears was one of the pioneers of measuring employee engagement in the retail industry by creating a set of measures known as Total Performance Indicators. People who enjoy going to work every day, as a result of a high-performing company culture, increases their productivity, giving them a higher return on salary. This model of employee engagement worked very well for Sears in the past, however, in recent years, Sears has strayed away from this core competency.
Originally, the postwar boom helped drive the furniture industry’s change. World War II drained the life out of many households, and newer innovative changes were sought by many. The tradition of handing down furniture from generation to generation was quickly disappearing in most households. IKEA helped shape the postwar household by offering new furniture styles at a very reasonable price. With low costs came a new innovative style and a comfortable atmosphere to shop in.
and will work their best to achieve them. With this management style, IKEA can use various methods of communications (see E5). However this type of management style could make decision-making slow and is not appropriate to some businesses such as, manufacturing industries. The organisational structure, culture and the management style of IKEA have to perform successfully so that, together they can achieve the company’s objectives. For example, to increase profitability: the communication within the organisation have to be clear so that, staff can understand what jobs have to be carried out; staff have to be motivated to perform the job; the relationship between managers and staff have to be strong and committing; the organisation have to encourage staff to create new ideas and share them amongst others; democratic managers have to listen and act on the opinions of workforce, democratic managers have to make sure that the workforce is well aware of the objectives of IKEA, etc.
Bowell states that IKEA is establishing themselves “...as a leader in creating and running innovative sustainable places.” This means that IKEA is taking their job seriously. They want to be the ones to help and inspire their customers into following the methods of sustainability. The “People & Planet Positive Strategy” allows the customers individuals to learn about how they can make a change in their own lives by the implementation of products from the company. IKEA is in the process of adapting to the lifestyle of being environmentally friendly. It is necessary for them to become net-positive. Most appliance retailers do not maintain this type of
Another example of IKEA’s international strategy in building good relationships with suppliers is in Asia, especially in Vietnam, where IKEA expanded its own supply base. Vietnam manufacturers offers low cost labor force and not expensive raw materials, while IKEA provides the view of creating a long-term, high-volume business relationship, and advice on finding the best according to the price raw materials, setting up and bulding factories, choosing what machines, equipments
Environmental analysis is integral to understanding how the organization operates within the organization itself, with in the industry and within the macroeconomic environment. For this analysis the subject organization will be IKEA. “IKEA Group is one of the world’s largest privately owned companies, engaged in the retail of flat-packed home furniture and other house wares. Operating over 150 large-scale stores in over 30 countries, and with a mail order division, IKEA sells a range of furniture, which is made by over 2,000 suppliers in more than 55 countries. The company is headquartered in Helsingborg, Sweden”. (DataMonitor, 2007). IKEA major retail competition in the US are: Furniture Brands International Inc , Office Depot Inc , Sauder Woodworking Co., Stanley Furniture Company, Inc. , and Staples, Inc. This paper will identify the key macroeconomic variables which affect IKEA and the retail industry as a whole. To better understand the effects of such variables upon the industry, two specific variables will be developed further. Once an understanding of how the industry is affected by these variables, the challenges and opportunities will be identified for IKEA, which operates in the retail industry.
IKEA is more than a furniture store they are a company driven by values (IKEA, 2014). The company seeks to make their consumers lives easier by providing them with modern, innovative, inexpensive products which they use to tackle daily home activities. IKEA Group has 298 stores in 26 different countries (IKEA, 2014). The company’s vision is “to create a better everyday life for the many people” (IKEA, 2014, para 1). Using innovative techniques for creating, producing, and marketing their products IKEA can provide consumers with durable products for reason...
The world is developing every day and we continue to discover new and innovative ways to better our quality of life. A trend that everyone seems to be focused on is saving the environment, which is also known as sustainable living. Not only does this apply to our lifestyle and environment, but it also translates into design. Sustainable living is becoming more popular around the world and is a lifestyle using skillful and sensitive design. It eliminates negative environmental impact and requires renewable resources. We each have decided to research different furniture companies to broaden our knowledge of the innovative practices used in each company. Throughout our paper we will introduce each of our companies and the products and practices they use to produce sustainable furniture. Our research will show that sustainable furniture design is beneficial to consumers by allowing them to live a more environmentally friendly lifestyle as their manufacturers develop innovative ways to make renewable furniture.
The purpose of this essay is analyze the case of IKEA, which has involved in the HR management. Meanwhile, choose two topics to identify the IKEA current situation, including training and development and cross-cultural management. From those two points, give some forward suggestions on the IKEA HR management practice.
E-commerce is available on Ikea’s website to selected countries, and they provide an e-mail address to customers who have queries about their business.
The website that has been chosen to be evaluated by me is IKEA’s website. IKEA website is actually one of the profit-making website. The website enables people to choose for their items and make a list before they make a real purchase at the real IKEA store. Basically, IKEA store is a store that provides home furnishing products such as sofas, beds, kitchen stuff, toiletries and some others. And even more, they had a showroom to inspire people to decorate their own house. So, in the website, there is also a preview of the showroom as it will helps for those that did not get a chance to go to the IKEA store.