Ikea And Its Effect On Business Management Essay

Ikea And Its Effect On Business Management Essay

Length: 1114 words (3.2 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

IKEA is a multinational company that sells furnishings and furniture. It is founded in 1943 in Sweden by Ingvar Kamprad. The company focused on furniture retailing at the early stage of the business and started to design its own product in 1955. The first IKEA store was opened in Almhult (Sweden) in 1958 (Woodham, 2004). The company has experienced growth ever since, by 2016 IKEA had 390 stores in 48 countries (IKEA, 2016). Since the company was founded its pricing strategy has mainly been low cost. IKEA is known for providing a wide range of low-cost, functional and well-designed products. However, because of the scale and size of the business, maintaining the standards and quality of the products has the potential to become a challenge. For example, some countries where IKEA’s manufacturing sites are located do not have the legislation to control working conditions. This could result in a weak supply chain which could then affect customers’ views of IKEA’s products (Anonymous, 2009). The purpose of this paper is to identify a strategic issue of IKEA and examine how has the company reacted to the issue.
Strategies to response to the issue
The organisation has implemented a number of strategies to respond to the challenges in the competitive market space. Firstly, to respond to some societal and environmental challenges, IKEA has started to work with organisations that can provide expertise in environmental and social issues. For instance, regarding social issues IKEA has built a strong relationship with UNICEF and ‘‘Save the Children’’ which are two very credible organisations that focus on combating child labour issues (Strand, 2008). With regard to environmental responsibility, since founded the company has alw...

... middle of paper ...

...ires a huge amount of financial investment and expertise (Dudovskiy, 2015).
Threat of substitutes: Threat of substitutes is low because the range of products and services IKEA provides still remains attractive to its target customers.
All strategies seek to achieve higher competitive advantage. Competitive advantage is important to almost every business, it allows the frim to be in the position to make more profit (Amason, 2011). One of the keys to the IKEA’s success is its communications with materials’ suppliers and manufactures. The other key is that it believes a strong environmental policy is good business practice ("SWOT analysis and sustainable business planning - An IKEA case study", n.d.). The scale of the company is still expanding. It would be fair to say that IKEA has successfully implemented a set of well-structured business strategies.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

An Examination Of The Ikea Case Study Essay

- The accompanying is an examination of the IKEA case study. This study examines the methodologies utilized by IKEA to increase upper hand in business sectors outside its unique territory. The report starts by giving a background into IKEA. The case study goes into educating the three issues identified with delivery warehousing and transportation of the products from the processing plant to the retail outlets. Some of the business strategies used by IKEA are as per the following: • Cost Savings in Furniture Design IKEA outlines one of kind items that bring about low assembling costs while meeting strict necessities for capacity, proficient distribution, quality, and effect on nature....   [tags: IKEA, Ingvar Kamprad, Furniture, Småland]

Better Essays
1849 words (5.3 pages)

Essay about IKEA Branding Strategy

- Brand is something to be created by deep understanding of culture, traditions, fashion updates, trend in market and demand in market. An organization or firm, which fulfills the requirements of all the qualities of the market by using branding strategies, will stand first and will have good name in the society. IKEA will stand as a good example, as it fills all the requirements of a perfect retail brand strategy. Ethical branding and ethical market make the brand famous and increases the reputation of the company brand choices are done by keeping various specifications in mind and there are traditional large scale retailers or modern apparels producers, all of them contribute to the growt...   [tags: IKEA Case Study]

Better Essays
1800 words (5.1 pages)

The Effect of Culture on People Essay

- The Effect of Culture on People Management today is all about getting things done through people (Hofstede, 1980). In order to do this effectively one has to understand and know the people who have to do them. And here the notion of culture has its significance. Culture here is seen as the predicted behaviour and the shared ways of thinking of an individual in a group. Here culture is not a property of individual, but of group. This group can be a nation, region, ethnic group or a work organisation....   [tags: Papers]

Better Essays
2187 words (6.2 pages)

Essay Ikea Of The Ikea Distribution Chain

- The IKEA distribution chain uses a business model that involves exclusive outsourcing for product manufacture. Due to this type of sourcing, the fact of the matter is that IKEA itself does not involve in manufacturing or production but instead relies exclusively on contractors. This means that they have only limited control of how such facilities operate and generate product. As a result of the above strategy, IKEA had recently come under fire through media and public awareness campaigns for employing Child Labor in countries like India, Pakistan and Nepal by their suppliers (One in Specific, Rangan Exports)....   [tags: Term, Employment, IKEA Catalogue, IKEA]

Better Essays
1335 words (3.8 pages)

Ikea 's Organization On The Planet Essay

- IKEA is one of the greatest furniture organizations, on the planet. The organization is the biggest organization on the planet; it had an incredible group of partners. The organization 's development from 1954 was zero, in 1994 of 114 organizations. The author of the IKEA Company, Ingvar Kamprad puts stock in an extraordinary group. As indicated by Bartlett, Dessain And Sjoman, 2006 pg., Ingvar Kamprad established the name IKEA from "his initials (Ingvar Kamprad), his home homestead (Elmtaryd), and its ward (Agunnaryd)....   [tags: Ingvar Kamprad, IKEA]

Better Essays
1592 words (4.5 pages)

Essay about Ikea 's Supply Chain Management

- 2. Introduction Companies are finding ways to improve its flexibility and competitiveness by changing its operation strategy, technologies that have implementation of Supply Chain Management (SCM) paradigm. For example, IKEA. It is the world’s largest home furnishing retailer having 298 stores in 37 countries with huge competitors around the world. However, it has a unique supply chain and inventory management techniques that makes it different and unique from others. 3. Section 1: Open ended discussion on IKEA 3.1 Suppliers IKEA’s success is mainly to its communication and relationship with its suppliers....   [tags: Supply chain management, Logistics, Inventory]

Better Essays
827 words (2.4 pages)

Ingvar Kamprad And Ikea 's Story Essay

- Ingvar Kamprad and IKEA IKEA’s story really began in 1943 when its founder Ingvar Kampard began his career by selling fish, Christmas magazines, and seeds at the age of 17. A few years after that, he established a mail order business that featured diverse products that included furniture (Bartlett & Nanda, 1990). The economy in Sweden was changing (thanks to the war) and the traditional practice of handing down custom made furniture was being replaced with purchasing new inexpensive furniture. Demand was growing but complex business associations between Swedish manufacturers and retailers kept prices high and prevented entry into the industry (Bartlett & Nanda, 1990)....   [tags: IKEA, Ingvar Kamprad, Småland]

Better Essays
1416 words (4 pages)

The Art Of Self Service At Ikea Essay

- The art of self-service at IKEA According to Senge (2006), service innovation includes services, technology, and new organizational models, different form of leadership, new procedures and business models. IKEA used service innovation and its processes to increase its sales, operation, which promote a steady growth. However, IKEA innovative services not only create new and better service for consumers who needs a good impression, but also focus on how to allocate available resources in particular ways for consumers to use in order to co-create value with seller....   [tags: Ingvar Kamprad, IKEA, Marketing, Service system]

Better Essays
1195 words (3.4 pages)

The Branding of IKEA Essay

- The Branding of IKEA Company background The first catalogue was introduced in 1951 and with this the founder saw his chance to expand his business on a larger scale, and this was the year he decided to completely focus on low-price furniture, as from the beginning IKEA sold mainly matches, watches, Christmas decorations, picture frames and jewellery. In 1956 the company came up with the concept of 'flat-pack' self-assembly furniture. The first international IKEA store was introduced in Norway in 1963, and was soon followed by the opening of stores in Denmark, Germany, Australia, Canada, and Austria....   [tags: Business Management Studies Essays Papers]

Better Essays
1797 words (5.1 pages)

Essay IKEA

- IKEA still operates under the same vision and business idea: “To create a better everyday life for the many people. Our business 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” (IKEA, 2014). Currently, they are focusing on sustainable growth through three growth areas: quality products at low prices, having a positive impact on both people and the planet, and personal growth of their employees (IKEA, 2014)....   [tags: Case Study]

Better Essays
1024 words (2.9 pages)