Type Private
Industry Retail
Founded Älmhult, Sweden (1943)
Founder Ingvar Kamprad
Headquarters Delft Netherlands
Area served Europe
Asia
North America
Oceania
Africa
Key people Peter Agnefjäll
(Chairman and CEO)
Products Self-assembly furniture
Revenue €29.293 billion (2014)
Operating income €3.793 billion (2014)
Net income €3.329 billion (2014)
Total assets €44.667 billion (2014)
Total equity €31.608 billion (2014)
Owner Stichting INGKA Foundation
Number of employees 147,000
HISTORY:
IKEA is a multinational group of companies that designs and sells ready-to-assemble furniture (such as
beds, chairs and desks), appliances, small motor vehicles and home accessories. Founded in Sweden in
1943.
As of August 2015, IKEA owns and operates 373 stores in 47 countries.The IKEA website contains about
12,000 products.
Products and Services:
Furniture.
Houses and flats.
Solar PV systems.
Retail.
Family Mobile
Manufacturing.
Product names:
Upholstered furniture, coffee tables, rattan furniture, bookshelves, media storage,
doorknobs: Swedish place names (for example: Klippan)
Beds, wardrobes, hall furniture: Norwegian place names
Dining tables and chairs: Finnish place names
Bookcase ranges: Occupations
Bathroom articles: Scandinavian lakes, rivers and bays
Kitchens: grammatical terms, sometimes also other names
Chairs, desks: men's names
Fabrics, curtains: women's names
Garden furniture: Swedish islands
Carpets: Danish place names
Lighting: terms from music, chemistry, meteorology, measures, weights, seasons, months, days,
boats, nautical terms
Bed linen, bed covers, pillows/cushions: flowers, plants, precious stones
Children's items: mammals, birds, adjectives
Curtain accessories: mathematical and geometrical terms
Kitchen utensils: foreign words, spices, herbs, fish, mushrooms, fruits or berries, functional
descriptions
Boxes, wall decoration, pictures and frames, clocks: colloquial expressions, also Swedish place
names
IKEA Family loyalty card
CORPORATE STRUCTURE
IKEA STORES IN THE WORLD
IKEA in Athens, Greece
IKEA Anagnina in Rome, Italy
IKEA in Dhahran, Saudi Arabia
IKEA Twin Cities in Bloomington, Minnesota, USA
Mission Statement:
“Offering 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.”
Development of Strategy:
How organization provide affordable goods to their consumers.
1 Differentiation
Ikea offers a number of extra services that its competitors do not.
Ikea in-store environment and purchasing processes promote greater consumer interest and
facilitate the buying behavior of customers.
2 Cost Leadership
The company operates 43 local trading offices in 33 countries to manage relationship with
suppliers
Instead of having sales people attending customers, Ikea uses a self-service model based on
clear in store displays.
Rather than relying on third party manufacturers, Ikea designs its own low-cost, modular, ready-
to-assemble furniture.
Items are provided to customers in flat-packed form, which results in a wide range of supply
chain contributions.
3 Response
Ikea focuses on generating design creativity by internal competition among a huge network of
freelancer and 9 staff designers. This leads them to positive response from consumer
Issues in Operation Management
High product quality at low price
Duplicate products by others corp.
High operational efficiency
Strategic Operation Management Decision
Goods and services design
Giving value to customers
Giving best quality in market
Strategic Development and Implementation
For implementing strategy SWOT analysis is needy.
Strengths
Powerful brand image
Cheap & affordable
Strong global resourcing capabilities
Weaknesses
Relatively few locations
No lifetime products
Advertisement not according to target market
Opportunities
Untapped market
Increase online selling
Increase user awareness by advertisement
Threats
Global economic crises
More competitors with low price product
Unable to store for longtime period
FORECASTING
Accounting Dept. :
new products or process
cost estimates
cash management
profit estimation
Finance Dept. :
Amount of funding
Timing of funding
Borrowing
Equipment replacement
HR Dept. :
See how many employees are:
Needed
Going to retire
Achieved bonus
Need to promote
Marketing Dept. :
When to launch new product
Demand and supply rate
Targeting and reaching customer
Operation Dept. :
How to get raw material
How to innovate
How to increase production
Getting products to the doorstep
FORECASTING TECHNIQUES
Sales force opinions is best for my company
We will ask our sales staff about the new demand
We will forecast to produce according to the demand
MODELS OF FORECASTING
Seasonal cannot be adopted because it is not a seasonal business
Exponential smoothing method is not suitable because it has fixed raw material
Trend method:
It can be applied because this nature of business is operating according to the trend of the market which
is changed after decades not monthly or yearly
DESIGN
Structure: last longing, unbreakable, predicted from pests.
Uniqueness: different from others, ease to access and understand
Color: according to the trend, innovative
Logo: attractive and unique
Packing: ability to stop scratches, unbreakable, easy to move
Weight: light weight, easy to carry
Area : least possible
PDS
Idea generation: R&D expenses should be made regularly
Competitors: through them we can generate ideas
Comparison: compare results with previous experience
Demands: complete the demand and get their loyalty
Satisfaction: get their loyalty
Functional specifications:
high quality raw material
Attractive design
Design review: have a sample and get its remarks
Quality:
ISO registration:
ISO 17 025
ISO 9000
Quality standard award:
Duane Lye Dun Wei from Nanyang Technological University of Singapore for winning the 1st
prize of 2015 IKEA Singapore
Reputation of IKEA:
Positive inly in the field of furniture
There is no diversity in this group
Product liability:
Because furniture is lastlonging product so it will have more liability as compare to all other products
COST OF QUALITY:-
Prevention cost:
This cost is spend on regular basis by IKEA due to its reputation in the market
Appraisal cost:
After making, we evaluate the product that either it is of best quality possible or not
Internal and external cost:
Usually IKEA has to bear external cost when it is transported but otherwise internal cost is least possible
chance due to is the size of product
Continuous improvement:
It is a best method to improve the goodwill and the quality because it is endless:
Planning
Check Do/test
Act
Bench marking:
IKEA has set some standards and if they are not followed then that product is disposed off and that
worker is transferred to the training
Just in time:
The raw material of IKEA is space consuming so time is very important factor in this business
