Virginia International University
Global Sourcing and Logistics - MBA 628
September 15, 2012
Dr. Stephen Onu
IKEA was founded in 1943by Ingvar Kamprad aged 17 in a small farming village in Sweden. The name IKEA was formed from the founder’s initials I.K. plus the first letters of Elmtaryd and Agunnaryd, the farm and village where Kamprad grew up. Originally IKEA sold everything from pens and wallets to picture frame, watched and even ladies stockings.
IKEA headquarters are located in Delft, Netherlands, as of August 2011, there are 287 IKEA stores in more than 38 countries. IKEA group has expanded globally to become a global retail brand with over 130,000 co-workers in 38 countries generating a net income of €23.5 billion (2010) and an annual sale of more than 24.7 billion EURO.
IKEA’s mission is to offer a wide range of home furnishing items of good design and function, excellent quality and durability, at prices so low that the majority of people can afford to buy. IKEA’s vision statement is Affordable solutions for better living.
* Strong brand name. – IKEA so far has maintained securing a great brand name. * Low cost.
* Fast delivery time.
* Great business model. – highly effective operation management. * Good quality.
* Low level of customer service.
* A very large supply chain that led to quality control issues. * Too much dependence on EU zone. - 82% of the overall sales and 67% of total purchases * Overcrowding in many IKEA stores.
* Greater revenues from Asian-Pacific sales – At the moment Asian-Pacific region only accounts for 3% of the overall sales (IKEA Group in figures, 2008). * Greater flexibility from online transactions – If the launch of online transactions proves to be successful it will enable IKEA to reach greater operations flexibility in terms speed of operations, accessibility...