Ikea Case

2 February 2017

This paper aims to demonstrate a detailed description of the elements of ‘IKEA’ company based on its famous name in the furniture industry. In the first part you can read about the background of IKEA. In the second part the report gives an overview over the analysis of the current situation by describing its positive and negative points. Its opportunities & treats and strengths & weaknesses. In the third and the fourth parts, it takes a look through the strategic gap between de current situation and the desired situation and strategic choice.

And the last part of the report contains an implementation plan with recommendations for IKEA. 1. 0 Introduction of the company 1. 1. History of the company: IKEA is an abbreviation of Ingvar Kamprad Elmtaryd Agunnaryd. The initials come from the name of the founder, the farm where he grew up and his home parish. The firm has grown rapidly since it was founded in 1948.

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From a very young age, Kamprad started selling furniture and he always kept his low costs – so low that other furniture stores pressured the National Association of Furniture Dealers in Sweden to stop providing Kamprad with products.

The first store of IKEA was opened in Almhult, Sweden. The next stores are in Norway, Denmark, Switzerland, Germany and etc. 1. 2 IKEA nowadays: There are stores not only in Europe but also in North America, Middle East, and Caribbean and Asia- all are 253 stores in 24 countries, but 32 from all are owned and run by franchising. IKEA stores include restaurants and cafes, serving typical Swedish food. At the moment, this is the largest furniture generator in the world, recognized for its Scandinavian style. The company transports the goods purchased to address which the customer desires which option make the firm more successful.

It welcomes around 565 million visitors to the stores during a year and a further 450 million people visit the IKEA website where the customers can see a catalogue in 27 languages. The company offers more than 9500 products which can be found in all stores or the shopper can order much of the range online. Today the prizes in IKEA stores are between 15 and 30 percent less with comparison to other furniture producers. This is why because IKEA designers make their part pretty good, of course sometimes they use inexpensive materials. IKEA stores have minimal few staff which helps to the lowest prizes too.

In IKEA can be found not only furniture, but also can be found all 2. 0 Analysis of the current situation: 2. 1. Mission, goals and strategies: IKEA’s mission is to offer a wide range of products with a high degree of quality and offer them for a low price to reach as many potential customers as possible. They apply this mission in all their departments; in Research & Development, purchases and sales of products in all their stores. IKEA believes that their challenge is to make a quality product and sell it at a low price. They feel that it is easy to sell an inferior product for a low price or a high quality product for a high price.

They overcome this difficulty by doing research about the different resources and by thinking fresh and “out of the box” . The use of natural resources is highly optimized and thus lowering the costs and lowering the price of the final product. The goals of IKEA is to be as sustainable and environmentally conscious as possible. They have a number of ways to do this. Firstly, they try to get as much dangerous chemicals out of their products and their packaging as possible. Formaldehyde is a chemical that is harmful for your health and they have minimized the use of this chemical in their products.

Also they have replaced PVC in all their products and packaging because of the harm this chemical cause. Secondly, IKEA stopped handing plastic bags out to customers and offers recycle bags. IKEA does not only spend money within the company, but they also gave about €50 million fund to companies who develop sustainable products for example; alternative ways of energy, alternative light sources and water saving. IKEA’s strategy is to combine their mission and goals and try to make a strategy that fits both. The first and most important aspect of IKEA is their low costs of producing products.

The second aspect is that IKEA has a strong and unique brand identity. Everybody knows the distinctive blue and yellow buildings. IKEA has a high brand awareness for example when people are moving to a new place and they need new furniture then much people go to IKEA because they all know what type brand it is. IKEA also tries to make it pleasant for every customer who is shopping in one of their stores, they try to achieve this by large parking space, a children play area, customer services and by having a large range of products to choose from (Wikipedia,n. d). 2. 2.

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