Ikea Supply Chain

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IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories. The company is the world's largest furniture retailer. It was founded in 1943 by 17-year-old Ingvar Kamprad in Sweden. As of October 2010, the chain has 313 stores in 38 countries, most of them in Europe, North America, Asia and Australia. The word IKEA was an acronym of his name and address: Ingvar Kamprad and Elmtaryd, Agunnaryd--the name of his farm and the name of the village it was located within.

IKEA’s Business Model:
IKEA’s competitive advantage is its business model which strives on continuous improvement, best prices, quality products, self-service, production centric design, proactive partnership with suppliers (1500 suppliers in 46 countries) and an integrated global supply chain. IKEA was pioneer of designing and selling ready-to-assemble furniture and practicing flat-packaging. IKEA introduced the concept of flat pack furniture which is a form of furniture that is purchased in multiple pieces and requires assembly. IKEA’s furniture generally arrives in a box and contains instructions for the buyer to follow in order to assemble it after purchase. For that IKEA depends upon the wide array of suppliers who are skilled and have got good natural resources. IKEA also publishes an annual catalog in 55 editions, in 27 languages for 36 countries and is considered to be the main marketing tool of the retail giant, consuming 70% of the company's annual marketing budget. The IKEA stores are large and customers can pick their own purchases. Further services are provided through the IKEA catalogue and home delivery. When IKEA entered Russia, the company noticed that wherever a store was opened, the value of the nearby real estate increased dramatically. Hence IKEA explored two business models simultaneously: selling through stores and capturing the appreciation in real estate...
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