 IKEA Trading Service Offices worldwide

 Longest supplier - Romania for 15 years

 Strict Code of Conduct
 Goals:
 Reduce cost, save raw materials & environment

Background

 Store setups
 Easy flow, daycare, and restaurants
 Laid out floor concepts to develop a vision
 High quality

1) Product development
Describe iKEA's process for developing a new pRODUCT.
What would be important criteria for selecting a site for an
iKEA store?
The Ikea pROCESS (cONTINUED)
4) SHIP IT
 Closer to distribution centers
 Larger cities (Chicago, New York, etc.)
 Closer to a mode of product transport
 Rail, road, sea

Design & Pricing

2) Choose a manufacturer
 Internal competition to find designer
 Brief is submitted
 Price, function, materials used, fabricator's capabilities
 Maximum functionality at minimum cost

3) Design the pRODUCT

5) Sell it
 Team: Designers, product developers, & purchasers
 Design, materials, suitable suppliers
 Main goal - Pick a price
  The low price begins at the drawing board.

additonal features of the ikea concept (beyond its design

process) that contribute to creating exceptional value for
the customer?
 Globally known
 Eco-friendly
 Strive for the lowest cost
 Established Supplier & Distribution Centers
 Lush store environment

What are IKEA's competitive priorities?

 Team development
 What works best for the customer
 The product size and shape play a crucial role
 Does the product fit the "Flat Concept?"

 110 million catalog copies printed

 34 different languages
 Visions of Wealth
 Plenty of easy credit available
 Selling smaller items helps to keep prices down on bigger items.
 260 Million Customers per year
 Some stores offer daycare and each

store has a restaurant at its core.

the ikea process

 Right number of goods, Right stores, Right time.
 Rail, Road, & Sea
 18 Distribution Centers Worldwide
 Handles 70% of IKEA's product line
 Flat Concept - Waste is a "Deadly Sin"

 Swedish retailer
 Dominates markets in 32 countries
 Corporate Mantra: "Low price with meaning"
 Good quality at a low price
 30-50% below competitors
 Last 4 years - Retail prices reduced by 20%