Ikea Case Study Problem Statement

Page 1: Introduction

IKEA is an internationally known home furnishing retailer. It has grown rapidly since it was founded in 1943. Today it is the world's largest furniture retailer, recognised for its Scandinavian style. The majority of IKEA's furniture is flat-pack, ready to be assembled by the consumer. This allows a reduction in costs and packaging. IKEA carries a range of 9,500 products, including home...
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Page 2: SWOT analysis

IKEA's goals of sustainability and environmental design are central to its business strategy. It has launched a new sustainability plan to take the company through to 2015. This will combine social, environmental and economic issues. IKEA uses SWOT analysis to help it reach its objectives. This is a strategic planning tool. It helps the business to focus on key issues. SWOT is the first stage...
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Page 3: Strengths

Strengths could include a company's specialist marketing expertise or its location. They are any aspect of the business that adds value to its product or service. IKEA's strengths include: a strong global brand which attracts key consumer groups. It promises the same quality and range worldwide its vision 'to create a better everyday life for many people' a strong concept based on offering...
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Page 4: Opportunities

A business uses its strengths to take advantage of the opportunities that arise. IKEA believes that its environmentally focused business conduct will result in good returns even in a price sensitive market. As the company states: 'There is a true business potential for IKEA in providing solutions that enable customers to live a more sustainable life at home. IKEA is developing effective solutions...
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Page 5: Weaknesses and threats

Weaknesses IKEA has to acknowledge its weaknesses in order to improve and manage them. This can play a key role in helping it to set objectives and develop new strategies. IKEA's weaknesses may include: The size and scale of its global business. This could make it hard to control standards and quality. Some countries where IKEA products are made do not implement the legislation to control...
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Page 6: Conclusion

IKEA is a well-known global brand with hundreds of stores across the world. In order to improve performance, it must assess its external and competitive environment. This will reveal the key opportunities it can take advantage of and the threats it must deal with. IKEA responds to both internal and external issues in a proactive and dynamic manner by using its strengths and reducing its...
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suppliers in 54 countries. IKEA always maintain a good relation with its suppliers and insistthem to buy new technology so that the production cost could decline.In common with some other retailers, IKEA has launched a loyalty card in its stores in Sweden,Denmark, Finland, Turkey, the UK, Australia, Netherlands, Belgium, Germany, Austria, Russia,China, Japan, Switzerland, Czech Republic, Slovakia, Ireland, Poland, Italy, Hungary, France,Dominican Republic, Portugal and Spain called "IKEA Family." The distinctive orange card isfree of charge and can be used to obtain discounts on a special range of products found in eachIKEA store. In particular, it gives 25% off the price of commissioned ranges of IKEA productson presentation of the card. The card also gives discounts on food purchased in the restaurant andthe Swedish Food Market. In the Netherlands, Australia, Denmark, Finland, Germany, Austria,Russia, Japan, UK, Switzerland, Slovakia, Czech Republic, Italy and Poland it also entitles theholder to free coffee in the restaurant. In Spain, France, Hungary, Czech Republic, Belgium,Ireland and Poland, this offer is only available on working days.Despite its Swedish roots, IKEA is owned and operated by a complicated array of not-for-profitand for-profit corporations. The corporate structure is divided into two main parts: operationsand franchising. Most of IKEA's operations, including the management of the majority of itsstores, the design and manufacture of its furniture, and purchasing and supply functions areoverseen by INGKA Holding, a private, for-profit Dutch company. Of the IKEA stores in 36countries, 235 are run by the INGKA Holding. The remaining 30 stores are run by franchiseesoutside of the INGKA Holding. INGKA Holding is not an independent company, but is whollyowned by the Stichting Ingka Foundation, which Kamprad established in 1982 in theNetherlands as a tax-exempt, not-for-profit foundation. The Ingka Foundation is controlled by afive-member executive committee that is chaired by Kamprad and includes his wife and attorney.While most IKEA stores operate under the direct purview of Ingka Holding and the IngkaFoundation, the IKEA trademark and concept is owned by an entirely separate Dutch company,Inter IKEA Systems

.

Every IKEA store, including those run by Ingka Holding, pays a franchisefee of 3% of the revenue to Inter IKEA Systems. The ownership of Inter IKEA Systems isexceedingly complicated and, ultimately, uncertain. Inter IKEA Systems is owned by Inter IKEAHolding, a company registered in Luxembourg. Inter IKEA Holding, in turn, belongs to anidentically named company in the former Netherlands Antilles that is run by a trust companybased in Curaçao. In 2009, the company in Curaçao was liquidated. The company responsible forthis liquidation traces back to the Interogo Foundation in LiechtensteinIngvarKamprad hasconfirmed that this foundation owns Inter IKEA Holding S.A. in Luxembourg and is controlledby the Kamprad family.In 1986, Kamprad gave up day to day control to Andres Moberg, a 36 year old Swedish who had

dropped out of college to join IKEA’s mail order department. Despite relinquishing management

control, Kamprad continued to exert influence over the company as an advisor to seniormanagement and as an ambassador for IKEA.

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