IKEA, the world’s biggest furnishing retail chain achieved sales of Euro 14.8 billion in 2005 with 237 IKEA stores in 34 countries/territories. The IKEA Group itself owns 210 stores in 24 countries (September 2006). The other 27 stores are owned and run by franchisees in 15 countries/ territories. IKEA originated as a mail order company in Sweden in 1943. The founder of the company, Ingvar Kamprad, defined the company’s mission to: “offer a wide variety of home furnishings of good design and function at prices so low that the majority of people can afford to buy them”.
IKEA follows a fairly standardized product strategy with a universally accepted assortment around the world. Still, the company adapts some of its products to the specific needs of countries and regions. IKEA designs most of its products but produces less than 10%. More than 90% of IKEA’s products are produced by subcontractors who often work exclusively for the company in more than 50 countries. These manufactures are responsible for shipping the components to one of IKEA’s large distribution centers that supply the various stores, which are in effect minni warehouses.
IKEA defines its global target market as “Young people of all ages”. That is, the company focuses mainly on younger people with higher education, medium income, who are not very status conscientious. IKEA’s main advertising is its sales catalogue whose basic design is similar in all countries. IKEA has built its own distribution network. Outlets are outside of the city limits of major metropolitan areas. Products are not delivered but IKEA cooperates with rental car companies that offer small trucks. Customers have to assemble the products at home. The furniture design...
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