Value Chain Management of Ikea

Topics: Porter generic strategies, Retailing, IKEA Pages: 17 (4508 words) Published: May 5, 2013
Purchasing Strategy

Jerry, Yeung Siu Hang



2. INTRODUCTION …………………………………………………………………………………………………… 1. Company Background & History
2. Company overview
3. Vision and Mission
4. Key Objective to build an efficient purchasing system to maximize the profit margin

3. Related Background…………………………………………………………………………………………….

1. What is the definition of purchasing Management
2. What is the definition of Purchasing Management in retail industry 3. What is Purchasing Strategy in IKEA
a) Global Sourcing
b) IWAY Concept
3.2.1 .Analysis of Generic competitive strategies In IKEA 3.2.2. Cost Leadership
3.2.3. Differentiation
3.2.4. Focus
3.3 Value that IKEA creates to Customers
3.4 Competitors Analysis
3.4.1. Cost Control
3.4.2. Quality Management
3.4.3. Purchasing Strategy
3.4.4. Comfortable shopping Environment

4. Customer impact on IKEA purchasing strategy (PEST)------------------------------------------------------------ 1. Political
2. Economical
3. Social
4. Technological

5. Business progress impact on purchasing strategy-------------------------------------------------------------------- 5.1.1 Definition of Business process
5.1.2. Business process of IKEA – Set up of IKEA retail stores – Business process impact on purchasing strategy a) Retail store Level
b) Purchasing level

6. Conclusion---------------------------------------------------------------------------------------------------------------------------------


This report is to analysis IKEA purchasing Strategy that through the study of its business model, Analyze of its Global sourcing strategy, Generic competitive Strategy, competitor analysis. It attempts to find out what are the keynotes of its successful as well the challenges that IKEA is encountering. IKEA low-cost strategy is world-famous successful business model that makes Its become the most biggest furniture retailer in globally. Our study is to figure out if there are any factors to drive its success other than cost issue.

Meantime, Since IKEA already so success in Euro area but obviously the next step for IKEA to look at is to develop its business in some other new marketplaces especially the up-and-coming developing countries. China is one of the rapidly growing new markets but the Characteristic cultural, unique concept of spending, challenges from domestic suppliers, understanding of its political and local law are all a new world for IKEA. Our Study through PEST that indicate some criteria that IKEA needs to encounter in order to entry this up-and-coming market successfully.

2. Introduction
2.1 Company Background and history
IKEA is a Swedish based company, the first IKEA store was opened in Sweden in 1958 and now this is one of the most famous and largest home products and furniture retailers in the world, It is founded in 1943 by Ingvar Kamprad in Sweden, who began to start his business to sell matches to his neighborhoods when he was 17 years old.

The first IKEA store was opened in Sweden in 1958, […]. IKEA further expanded in the 1980s, Germany, with 44 stores, is IKEA's biggest market, followed by the United States, with 37. (1) 2.2 Company Overview

IKEA, a Sweden based household retails, being identified as the world’s biggest household retailer, which focus on stylish but comparatively low-priced furniture.

Up to October 2010, the IKEA had more than 310 stores in over 38 countries, which most of the stores located at North America, Europe, Australia and Asia pacific regions. (2)

In the year of 2010, the company has over 620 million visitors to the stores and more than 700 million visited on its websites. Meantime, 61 editions of catalogue was printed in more than 197 million copies in 29 languages. IKEA...

References: 2) (Swedish)". 2008-03-09. Retrieved 2010-12-26
3) IKEA Sustainability Report 2010
6) Lieven Quintens a, Pieter Pauwels a, Paul Matthyssens b,c 2006, Journal of purchasing & supply Management 12 (2006) 170-181, Global purchasing : State of the art and research directions, viewed May 30, 2011.
7) John Fernie, Leigh Sparks, (2004) Logistics and Retail Management, 2nd edition, London : Kogan page, viewed May 30, 2011 page 48-9
8) Johanson and Vahlne, 1977
11) Leif Enarsson, (2006) Future Logistics Challenges, Demark : Copenhagen Business School Press, viewed May 30, 2011 page 80
12) R
15) view May 15
16) Michael Porter, (1985) Competitive Advantage : creating and sustaining superior performance, New York : Simon & Schuster, viewed May 30, 2011 page 15
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