IKEA and Loyalty Cards

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Introduction

IKEA is a privately held, international home products company that designs and sells ready to assemble furniture such as beds and desks, appliances and home accessories. The company is the world's largest furniture retailer. Founded in 1943 by 17 year old Ingvar Kamprad in Sweden, the company is named as an acronym comprising the initials of the founder's name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish. IKEA has 300 home furnishing superstores in 35 Countries and was visited by some 583 million shoppers. IKEA’s low priced elegantly designed merchandise displayed in large warehouse stores, generated sales of $21.2 billion in 2008, up from 4.4 billion in 1994. The fledgling company sold fish, charismas magazine, and seeds from his family farm. His first business hadbeen selling matches, the enterprise Kamprad purchased them wholesale in 100 box lots and thenresold individually at a higher mark up. Before long, Kamprad had added ballpoint pens to hislist and was selling his products via mail order.

History

In 1948, Kamprad added furniture to his product line. In 1949 he published his firstcatalog. Kamprad hired 22 years old designer, Gillis lundgren originally helped Kamprad to dophoto shoot for catalog but, later he became a designer of many furniture for IKEA. Its goal wasover time to provide stylish functional design that can be cost effective. Ultimately this led to

concept of what IKEA calls “democratic design”. In 1957, IKEA started to exhibit and sell its

products at home furnishing fairs in Sweden. By 1958, an expanded facility at the Almhult location became the first IKEA store. The original idea behind the store was to have a location where customer could come and see...

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...ness idea is “to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”.

We work hard to achieve quality at affordable prices for our customers through optimising our entire value chain, by building long-term supplier relationships, investing in highly automated production and producing large volumes. Our vision also goes beyond home furnishing. We want to create a better everyday for all people impacted by our business.

The furniture market of USA is very fragmented. But there are some well-established retailers who are selling functional furniture at a very low cost for example: Wal-Mart, Office Depot.These retailers will be in direct competition with IKEA. On top of this there are also some highend retailers who sell high-quality, well designed furniture.

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