Ikea

IKEA´S STRATEGY

IKEA was founded in Sweden, in 1943 by Ingvar Kamprad. This man, inspired by the country he grew up in, had an innovative idea. He decided to establish a company that would sell typically Swedish furniture that would be stylish and high quality but at prices available to the majority of people. Kamprad was proud to be Swedish and decided to propagate his home country. You can see Sweden in every IKEA shop all around the world. The colours are typically Swedish, food served in restaurants is Swedish, and names of products are of Swedish origin.

Kamprad’s idea was to sell low-cost furniture while maintaining good quality. To enable this, the key is close cooperation between IKEA´s designers and outside suppliers. They try to make the production process as simple and cheap as possible. Suppliers get long-term contracts, IKEA’s know-how and support and for that IKEA demands exclusiveness and low-price. That encourages competition between companies willing to work for IKEA. It is very challenging to make deal with IKEA as it can secure their business for several years in advance, however there is very strong rivalry and to be a successful supplier you have to able to beat your competitors in terms of price and quality.??? http://www.handels.gu.se/epc/archive/00003669/

From the beginning of its existence, IKEA strongly follows its original idea. They offer the same range of products everywhere. You can find more than 10,000 items in huge stores that are usually located in outskirts of big cities to avoid high rents. From their store you would be able to fully equip the entire house as IKEA offers anything from beds to home decorations. The difference to other furniture retailers is that you buy your new piece of furniture packed in a box and you have to assemble it at home. This is one of IKEA´s ways how to reduce costs as they pass part of them to customers. (Dimitriadis, 2002)

IKEA in the North America

Initially, IKEA was very successful with...