Ikea

I. Facts of the Case

• IKEA is a Swedish retailer dominating markets in more than 32 countries.

• The IKEA battle plan – keep making its offering less expensive, without making them cheap.

• IKEA’s corporate mantra is “Low price with meaning.” The goal is to make things less expensive without ever making customers feel cheap.

• At IKEA the process of driving down costs starts the moment a new item is conceived and continues relentlessly throughout its production run.

• The product development process of IKEA includes the following steps:

o Pick a price

o Choose a manufacturer

o Design the Product

o Shipping

o Sell it

• The team behind each product consists of designers, product developers, and purchasers who get together to discuss design, materials and suitable suppliers.

• IKEA’s long-term relationships with suppliers help both parties to build up a huge fund of knowledge about demands and expectations.

• IKEA has introduced a code of conduct governing working conditions and environmental awareness among suppliers.

• IKEA works non-stop to reduce cost. For IKEA, it is also a question of saving raw materials, ultimately, the environment.

• IKEA strives to deliver the right number of goods to the right stores at the right time. They calculate good requirements and make sure that deliveries are efficient.

• IKEA pioneered the concept of flat. This, in return, is also an excellent way of lowering shipping costs by maximizing the use of space inside shipping containers.

• To keep prices low, IKEA needs to sell items without salespeople. Customers contribute to the low prices at IKEA by selecting and collecting the products from the self-serve areas.

• IKEA has 260 million customers a year

II. Statement of the Problem

What would be important criteria for selecting a site for an IKEA store?

III. Key Objectives

The objectives of this case are:...