Ikea Case Study

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The IKEA case
Management and organizations
IBMS 1st year


This assignment had to be written for the class of Management and Organizations at Stenden University, course IBMS, first year. We had a group of 6 and had to work it out together. We were enjoying getting into the world of IKEA, the world’s most furniture store on the market.

Executive summary

IKEA is an abbreviation of Ingvar Kamprad Elmtaryd Agunnaryd. The initials come from the name of the founder, the farm where he grew up and his home parish. The firm has grown rapidly since it was founded in 1948.

There are stores not only in Europe but also in North America, Middle East, and Caribbean and Asia- all are 253 stores in 24 countries, but 32 from all are owned and run by franchising. IKEA stores include restaurants and cafés, serving typical Swedish food. At the moment, this is the largest furniture generator in the world, recognized for its Scandinavian style.

IKEA’s mission is to offer a wide range of products with a high degree of quality and offer them for a low price to reach as many potential customers as possible. The goals of IKEA is to be as sustainable and environmentally conscious as possible. They have a number of ways to do this.

IKEA’s core competence is their production costs as low as possible. This is brings them to a cost leadership position which the competitors can’t match. IKEA’s synergy is between their product designers, customers and IKEA. The product designers design furniture for IKEA to sell, with a budget limit, entailing to customer needs. IKEA receives those ideas and the parts are being produced and sold by IKEA. IKEA creates value for their customers by producing products that entails to customer’s needs.

As for the strengths of the company, IKEA have a strong internationally known brand with loyal customers. IKEA offers high quality products for a low price. The IKEA business model is unique because it absorbs its customers in working together with IKEA to finalize a product.

What the weaknesses concerns ,whilst an international brand there is a level of reliance on European markets with at least 90% of its locations are based in Europe. Although IKEA products have low prices, research have shown that people have the idea that customer service in IKEA is low and could be improved. (IKEAFans)

Opportunities :IKEA is expanding as a brand, now it’s known as an international brand, but because of expanding into American and Asian markets, this could lead to a global brand recognition.

Threats : They most countries suffer of economic decline. Ilva can expand the next couple years and grow into a new international.

The most people who live in a country without an IKEA don’t even know IKEA. This is a big gap because IKEA wants to be an fully international well known brand. And is now more focusing on only Europe. IKEA is successful in the countries who have an IKEA store. They sell good quality goods to the customers and the most are satisfied about their purchases. But it is known that IKEA has a low service level. The main goals are to open an IKEA store in 2 other countries within 1 year and to improve the service.

As a strategic choice, IKEA will make full use of the opportunity to attain a global status, because they are already well known in big parts of Europe. IKEA will need to expand their business slowly, every time just outside the region, they are already firmly known. So potential customers in the new area already know about IKEA, but don’t have the possibility yet to make use of it.

Table of content

Executive summary3


1.0 Introduction of the company7

1.1. History of the company:7

1.2 IKEA nowadays:7

2.0 Analysis of the current situation:8

2.1. Mission, goals and strategies:8

2.2. Internal environment:9

2.3. External environment:10

2.4. The five forces according to porter...
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