In 2007, the IKEA Group continued it strong growth. Sales rose by 14 percent and the company opened 21 stores in 11 countries.
IKEA sells relatively inexpensive contemporary, Scandinavian style furniture and home furnishings. IKEA’s targets market is young, primarily white collar customer. The geographic scope is worldwide, or at least all countries where socioeconomic and infrastructure conditions support the concept. IKEA is not only retailer but also maintains control of product design to ensure the integrity of its unique image and to accumulate unrivaled expertise in designing for efficient manufacturing. The company however, does not manufacture, relying instead on a host of long term suppliers who ensure efficient, geographically dispersed production.
IKEA offers a wide range of well designed functional home furnishing products, at prices so, low that as many people as possible can afford them. This is the idea at the idea of everything IKEA does, from product development and purchase to how we sell our products in IKEA tiers globally.
THE IKEA RANGE comprises 9,500 home furnishings products around on their of which are renewed each year, IKEA of Sweden develops the range based on life at home, in particular the needs of the large number of people with limited incomes and limited living space.
The company vision’s is to create a better everyday life for the many people. The business idea is to offer wide range of well designed, functional home furnishing products, at prices so low that as many people as possible will be able to afford them. Given below are some snippets on how the company goes about achieving its mission.
Challenging the Status quo:
Anybody can make a good quality product for a high price, or a poor quality product for a low price. But to make good products at low prices, you need to develop methods that are both cost efficient and innovative.
The following are just a few examples of how thinking outside the box has resulted in surprising outcomes.
See things differently:
One IKEA product developer decided to use a door as a tabletop when he toured a door factory that used board on frame constructions – a layering of sheets of wood over a honeycomb core that gives a strong, lightweight structure, with a minimal wood content. This type of construction is cost effective and environmentally friendly and is used today in IKEA products.
Flat Packing saves shipping cost:
The flat packs and customer willingness to assemble products themselves enable them to reduce labor shipping and strong costs. IKEA furniture so that it can be packed unassembled. Ultimately this means that we are able to offer our customers products at low prices.
Quality home furnishings products at affordable prices:
Low prices are the cornerstone of the IKEA vision, business idea and concept. The basic thinking behind all IKEA products is that low prices make well designed, functional home furnishings available to everyone. After all, the vision is to create a better everyday life for many people.
The company is constantly trying to do everything a little better a little simpler more efficiently and always cost effectively. All IKEA units play an important part in creating low prices which it is then able to offer to its customers.
Design the Price tag first:
The LAMPAN was created from the fundamental idea that it is possible to combine extreme low price beautiful design and high quality. With low price in mind, the designers began by reviewing the whole production process, for example materials used, logistics labor and transport costs. The outcome was a new successful packing where the lampshade could be used as a bucker for the lamp foot.
IKEA product developers and designers work directly with suppliers to ensure that creating the low prices starts on the factory floor. They consider maximizing production equipment using raw materials efficiently and applying technical innovations and the best possible design. It is all about making the most of our production process, keeping waste to an absolute minimum and considering flat pack transportation and self assembly. IKEA of Sweden develops the IKEA range which consists of about 9,500 products.
Distribution and Purchasing:
The IKEA Group has 31 distribution centers in 16 countries, supplying goods to IKEA stores, and 45 trading service offices in 31 countries. This enables it to develop close relationships with 1,350 suppliers in 50 countries.
Expert and Supporting Functions:
An organization such as the IKEA group requires internal support functions to operate smoothly. IKEA IT provides cost effective IT solutions to all IKEA units. IKEA Food Services is responsible for cost efficiency in food purchases, development and deliveries to IKEA restaurants, bistros and Swedish Food Markets. IKEA Indirect Materials & Services provide IKEA with products and services used by IKEA co-workers excluding home furnishings products.