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