Overview Of IKEA

Introduction

IKEA is one of the largest successful international home products retailer in the world, and it is a private held company. In 2008, it had around 285 home furnishing superstores in 36 countries and 1,380 suppliers in 54 countries. The range of products was and still is 9,500. The number of coworkers is 127,800 in 39 countries. IKEA sales were € 21.2 billion.

IKEA Background

IKEA was founded by Lngvar Kamprad in 1943 when he was 17 years old. He was selling fish, Christmas magazines, and ballpoint pens from his family farm. Then, in 1948, he added furniture to his product line, and he was using the local milk truck to deliver the products. After that the milk truck had changed its route in 1953. He bought an idle factory near to Almhult village to be the first warehouse. Kamprad’s goal is to make it possible for all people to buy their own furniture at a low price. The IKEA name comes from his initial, the first letter of the family farm and the village where he grew up in Sweden. In 1956, the designer Gillis Lundgren came up with the self-assembly concept, which means that the customers assemble their furniture at home, to reduce their products prices by reducing transportation and warehouse costs. As a result, Sweden’s competitors had fought the IKEA success, and they work hard to stop Kamprad’s activities. That led him to go outside the country to look for a manufacturer. This was the golden opportunity for him because he found one in Poland that could produce furniture 50% cheaper, and that helps to reduce the prices more. Moreover, IKEA has added some facilities such as a restaurant, child day care, and self-service to be as IKEA’s features.

IKEA Company Timeline

Expansion Internationally

IKEA in Europe

In W...

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... to gain more popularity and competitive advantage in global markets:

IKEA must carefully identify the cities in which to operate. It is recommend that locations ikea choses are located near colleges, as the college students are the target consumers of Ikea.

Find more local suppliers with very low costs to maintain low price specially when its enter new market.

Design furniture closure to customers’ desire based on their demographics.

Conduct extensive market research to understand local culture and consumer behavior pattern Make use of local expertise to gain knowledge about culture, history, market potential, social and political trends of the country.

Looking into venturing out to countries with poor populations. Since Ikea prices are generally set a low cost, it is highly likely that countries with poor residents become a good source of business for Ikea.