Business Report IKEA v2

Business Report

IKEA

Prepared By,

Bhavya Basavaraj

Divya Hombalammanapet Nagaraja

Vijayalaxmi Venkatesan

Prepared for,

Jeff Newcomb

Instructor

Business Communication

Department of Marketing & Entrepreneurship

California State University, East Bay

Marketing 3495, Section 3

03/13/2013

IKEA

Organization’s Background

Start-up of the organization:

IKEA is a Swedish pronunciation, famous for home products company that designs and sells

ready to assemble furnitures, appliances and home accessories.Today, IKEA is one of the world's

largest furniture retailer, owning about 301 stores in 37 countries. IKEA is founded at Sweden in

1943 by 17-year-old Ingvar Kamprad. The company's name is an acronym comprising the

initials of Ingvar Kamprad (the founder's name), Elmtaryd (the farm where he grew up) and

Agunnaryd (his hometown in Småland, South Sweden). Today, the company is known for its

modern architectural designs on various types of appliances and furniture, often associated with a

simplified eco-friendly interior design.

Vision and Concept of IKEA:

The IKEA vision is to “create a better everyday life for the majority of people”.

The IKEA business idea is to offer a wide range of well-designed, functional home furnishing

products at low prices that as many people as possible will be able to afford them.

The IKEA market positioning statement is “your partner in better living. We do our part; you do

yours. Together we save money”.

The IKEA Concept guides the way IKEA products are designed, manufactured, transported, sold

and assembled. All of these factors contribute to transforming the IKEA Concept into the reality.

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Organization’s evolution from its founding to where it is now:

The IKEA story begins in 1926, when founder Ingvar Kamprad is born in Småland in southern

Sweden. He is raised by Elmtaryd, a farm near the small village of Agunnaryd. Even as a young

boy Ingvar knows he wants to develop a business.

In 1920s:

At the age of five Ingvar Kamprad starts selling matches to his nearby neighbors and by the time

he is seven, he starts selling further a field, using his bicycle. He finds that he can buy matches in

bulk cheaply in Stockholm and re-sell them individually at a very low price but still make a good

profit. From matches he expands to selling flower seeds, greeting cards, Christmas tree

decorations, and later pencils and ball-point pens.

1940s-1950s:

Ingvar Kamprad is entrepreneurial in developing IKEA into a furniture retailer. This period sees

the exploration of furniture design, self-assembly, advertising, the use of a catalog and a

showroom to reach many people.

1960s-1970s:

In this period, the IKEA concept starts to take shape. New IKEA stores open and hero products

are developed such as POÄNG and BILLY bookcase. It is a time where concept takes shape and

is documented in Ingvar Kamprad's.

1980s:

IKEA expands dramatically into new markets such as USA, Italy, France and the UK. More

IKEA classics arrive such as KLIPPAN, LACK and MOMENT. IKEA begins to take the form

of today's modern IKEA.

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In 2000s:

IKEA expands into even more markets such as Japan and Russia. Everything for the bedroom

and kitchen is explored and presented in coordinated furnishing solutions. This period also sees

the successes of several partnerships regarding social and environmental projects.

Current:

As of October 2011, IKEA has 332 stores in 38 countries. In the year 2010, it sold about $23.1

billion worth of goods. IKEA contains about 12,000 products. There were over 470 million

visitors to the IKEA websites in the year from September 2007 to September 2008.

Industry Information

Current industry environment:

Home Durables – Industry

IKEA is in the Household Durables industry. Household Durables includes the type of products

that are manufactured for last for a long life. These are products that people use in their everyday

life and the products are build endure regular usage. Every household has to have at least a few

of these products, if not more. Furniture would be the most common object found at home and

this falls into the Household Durables industry. IKEA is the biggest player in the furniture

industry. “It is the world’s largest furniture retailer with more than 301 stores and 30 franchised

units.”1 – according to Forbes. Other products that fall into the same category are appliances and

textiles. IKEA has a presence in all of these categories.

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Industry Profile:

The home durables industry is mostly dominated by big players, the primary reason being the

barrier of entry. This industry requires huge capital investment. IHS Global Insight Inc., an

economic research firm, and the Home Improvement Research Institute (HIRI), an industry trade

group; estimate that home improvement was a $263.4 billion industry in 2011. HIRI forecasted

that 2012 would see sales of $283 billion in home improvement products. IKEA is right in the

middle of this game, it’s a big opportunity for IKEA.

Industry Trends:

The Home Durables industry has seen a modest growth in 2012. Below is a table showing

prominent players in the industry with their 2011 fiscal year revenues.

Refer Appendix 1: Figure 1: Year-to-Year Percent change of sales

The slump in the housing industry in 2008 led to a 48% sales slump in the home improvement

retail industry. This has a direct impact on the home durables industry. Less people building and

renovating homes meant less people buying home improvement products. The industry has

shown better results in 2011 and 2012 due to consumer confidence and higher prices. Home

Depot, a top competitor to IKEA, saw a 29% increase in income in 2010 and 16% in 2011.

Furniture Today reported that total retail sales of furniture and bedding grew from $80.1 billion

in 2011 to $84.2 billion in 2012, a 5% increase year-over-year.

“According to the National Retail Federation, a retail trade association, the four-day

Thanksgiving holiday weekend in 2012 recorded 12.8% growth in retail sales over the prior-year

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period, and one-fifth of Black Friday shoppers bought home furnishings or home décor

products.”

The housing market seen a recovery in during the last quarter of 2012 and is expected to grow in

2013 based on articles published by Furniture Today in December 2012. The number of new

house constructions and home prices has been increasing. Improvements in job market and

consumer confidence will only push demand for home improvement products. IKEA should

expect to compete with retailers who are planning to expand operations and have a well planned

inventory to meet the increasing demand. The table below shows the $ sales performance and

forecast from 2012 to 2016.

Figure 2: Products Market Forecast

The US economy is a key indicator of the sales trend in the household durables industry. The

table below reflects IKEA’s performance over the past decade and shows a strong co-relation to

the US economy.

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Figure 3: IKEA's revenue

Major Players in the Retail industry

Listed are some of the major players in the retail industry which are considered competitive to

IKEA.

Figure 4: IKEA and its competitors position in the market

Top 2 dominant organizations in the industry

1. Bed Bath & Beyond Inc.

2. Williams-Sonoma

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1. Bed Bath & Beyond Inc

The first store selling specialty linens and bath products was opened by Warren Eisenberg and

Leonard Feinstein in 1971 in Springfield, New Jersey. Today its retail store brands also include

Christmas Tree Shop, Harmon Health and Beauty, and BuyBuy Baby. [10]

History:

Bed Bath & Beyond Inc. operates the largest houseware goods specialty stores in the United

States. The company has a chain of over 300 stores that sell such domestic merchandise as bed

linens, bath accessories, kitchen textiles, cookware, dinnerware, kitchen utensils, small electric

appliances, and basic home furnishings. Throughout the company's short history, bigger has

proven to be better. In the mid-1980s, Bed Bath & Beyond was a pioneer in the concept of

superstores: large, well-stocked specialty shops with prices allegedly comparable to, or lower

than, department store sale prices. Some Bed Bath & Beyond stores have over 80,000 square

feet--the average is 45,000 square feet--of selling floor and offer more than 300,000 different

items, stacked literally from floor to ceiling. The company expanded rapidly in the early 1990s

on the strength of the superstore concept. Store count continues to grow at a rapid clip and in

2000, the company recorded its eighth consecutive year of record earnings. The $1.8 billion

company has operations throughout the United States and plans to continue opening new stores

to support its goal of doubling its earnings every three years.[10]

Products and Services

Bed Bath & Beyond includes products such as Bath, Bedding, Kitchen, Home décor and

Furniture.[10]

Bed Bath and Beyond offers hundreds of products in the following categories.

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Bedding Kitchen Electronics Fine Dining/Gift ware Table Linens

Bath Cookware Casual Dining Rugs

Kitchen Cutlery Serve ware Wall Decor

Home Decor Furniture Vacuums Storage

Window Treatments Lighting Utility Cleaning

Services offered:

Shipping services to many items in the store

Provides and supports many local events

Committed to many social responsibility like

◦ Partnered with HealthyWomen.org (formerly the National Women’s Health Resource

Center) since 2004

◦ Offers local projects to preserve coastal and marine habitats and the life within them

Williams-Sonoma, Inc

Williams-Sonoma, Inc. is a high-end American consumer retail company that sells kitchenware,

furniture and linen, as well as other housewares and home furnishings, along with a variety of

specialty foods, soaps and lotions. Its international corporate headquarters is in San Francisco,

California, United States.[11]

History

Williams-Sonoma was founded in 1956 [4] by Charles E. (Chuck) Williams, selling professional

and restaurant-quality kitchenware for home use. Chuck Williams was one of the titans of the

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American food revolution. He had a tough childhood made even more so by the great depression.

By the time he was a teenager, he was on his own working his way through high school at a

California date farm. During World War II, he repaired war planes in East Africa and India. In

1953, he took his first trip to France. He quickly fell in love with French kitchenware such as

copper cookware, and is quoted as saying "I knew this was something that wasn't found in

America, but thought people would want." Soon after, he formulated a plan to import French

cookware into America. He settled in Sonoma, California in 1947 and taught himself how to

build houses before opening his first shop several blocks from the town square. The store quickly

became a destination. In 1971, along with—and at the suggestion of—regular customer Jackie

Mallorca, Williams began publishing a mail order catalog to expand his business beyond the San

Francisco Bay Area. By 1972 he was sending out thousands of catalogs, took on partners,

borrowed money and opened more stores.

Products and Services

Williams-Sonoma offers hundreds of products in the following categories.

Cookware Bake ware

Cooks' Tools Electrics

Cutlery Food

Home Keeping Outdoor

Table Top and Bar Serve Ware

Furnitures Grills

Services includes:

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Free Shipping for many items

Even offers recipes

Provides Top 10 for all categories in their website which are collected from customers

Separate link for Professional Chefs

Organization’s major Products and Services:

IKEA carries a range of 9,500 products, including home furniture and accessories. IKEA’s main

product is furniture, thus, wood products are its most important non-labor input. Currently, IKEA

is the third-largest purchaser of wood products in the world, behind Home Depot and Lowe’s.

IKEA provides the products and services based on the economy, society and environment.

Figure 5: IKEA's main focus

Some of the products are shown in table below:

Children's IKEA

Safety mattresses, changing table ,storage

furniture, children's highchairs, baby toys,

Cooking

Cooking accessories oven ware, knives &

chopping boards, mixing & measuring tools,

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children's beds, children's mirrors . food storage & organizing, dishwashing

accessories, Swedish food kitchen textiles,

frying pans & woks pots, sauce pans bake

ware kitchen utensils.

Bathroom storage

Sink cabinets, sinks Faucets, bathroom

storage furniture’s, bathroom accessories

Beds & mattresses

Full, queen and king beds single beds, guest

beds & daybeds, bunk beds, headboards

mattresses, sofa beds .

Chairs

Armchairs bar tables & chairs highchairs

Junior chairs stackable & folding chairs café

furniture, dining sets, step stools & step

ladders, office chairs, upholstered chairs

covers, dining chairs stools & benches .

Clothes storage

Hooks & hangers, wardrobes, chests of

drawers, clothes organizers, clothes storage,

systems racks & stands shoe, cabinets shoe,

coat & hat racks.

Decoration

Outdoor plant pots & plants candle holders

& candles clocks, frames & pictures, gift

wrapping, plant pots & plants vases, bowls

& flowers .

Lighting

Integrated lighting, ceiling lights, children's

lighting, work lamps, wall lamps, spotlights

LED lights, bathroom lighting, decorative

lighting, floor lamps light, bulbs &

accessories shades, bases & cords table

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lamps .

Sofas & armchairs

Modular sofas, armchairs, chaise lounges,

footstools , extra covers fabric sofas leather

sofas.

Tables

Bar tables & chairs, café furniture, dining

sets, nightstands, dressing tables, dining

tables, coffee & side tables

Textiles & rugs

Baby textiles, children's textiles, kitchen

textiles, curtain rods & rails, shower

curtains, bath mats, towels, bedspreads

blankets & throws, comforters, pillows

,place mats & dining textiles, curtains &

blinds cushions & cushions covers fabrics

Storage furniture

Pantry wardrobes, bed storage, headboards,

nightstands, dressing tables bookcases,

cabinets & sideboards, chests of drawers,

clothes storage systems ,drawer units, DVD

& CD furniture, filing cabinets, shelving

units, TV & media furniture, Wall shelves.

Some of the services that IKEA provides are:

Home delivery service:

IKEA charges the same delivery fee regardless of the weight or size of the order. They charge for

new products directly to the room of your choice starting at just $59!

Kitchen services:

IKEA kitchens were designed to be installed by the people, but IKEA knows sometimes a little

help makes the process go more smoothly. IKEA’s new menu of services gives the flexibility to

do as much as little work as customers likes to bring the dream kitchen.

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Measuring, individual kitchen planning and installation may not be available in all stores.

Customers have to get information with local IKEA store for available services.

Services includes in restaurants and play areas:

Customers are very satisfied with the food provided, especially the meat balls in the IKEA store.

IKEA store provides some free food with the purchase of 100 $ or more, which is a good

attraction for customers. They provide services of taking care of children while the customers are

shopping.

Organization’s Marketing Strategies

IKEA is an international home furnishings retailer. IKEA’s main vision is “to create a better

everyday life for the many people” according to their corporate website. IKEA’s furnishing

products cover a wide range of well designed, functional and low cost products making it

affordable to all. IKEA products are typically 30 to 50 percent below other competitors. IKEA

main goal is to provide low price. IKEA started out in Sweden and adapted its concept of “Do It

Yourself (DIY)” home furnishing in international markets. It standardized the process of

production, design and selling across all markets, but adapted to local culture when it came to

customer facing elements of retail selling.

IKEA’s motto of delivering high value at low cost guides its fundamental working principle of

operations in different as an international brand. It basically aims to operate similarly and to be

perceived similarly in every country when it has a retail presence. They keep their brand

messaging simple and that is reflected in their logo with the big blue letters in a yellow

background or vice versa.

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Product Strategies:

IKEA’s product range is similar with very little modifications across all its international retail

stores. IKEA makes minor adaptation to its products to specific needs of countries and region.

Their product lines are the same including the sub product lines and the prices are also similar,

just low enough to compete with the other competing stores. IKEA’s products concentrate on

people’s everyday need at home, especially the needs of majority of people, who have limited

income and limited space. IKEA provides functional products at low price such that most of

people can afford them.

IKEA has different design lines. Each IKEA factory concentrates in producing one design line.

One base raw material and a limited product range. This type of product manufacturing

optimizes efficiency and production volume. The Danville facility that opened in 2008

specializes in the manufacture of IKEA's LACK, EXPEDIT and BESTA lightweight panel

furniture and storage systems. All panels processing and finishing is done in house, including the

construction of the product lines' signature honeycomb panel.

IKEA’s uses product/price matrix as product strategy to evaluate product lineup. IKEAs product

development process starts with product-strategy council which consisted of a group of managers

who establish priorities for IKEA’s product lineup. Priorities are based on consumer trends.

Once a product priority is established, a product developer would set the product’s target retail

price using what the company referred to as “the matrix.” The matrix consisted of three basic

price ranges and four basic styles (see Figure B below). Based on each price range company

conducts survey, establishes benchmark, and then sets price lower than competitors. Matrix is

used to identify gaps in the company’s product line. By plotting the company’s current product

offerings on the grid and looking for empty spaces, product managers could readily identify

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market opportunities. Based on target retail price, the company selects manufacturer to produce

it.

Figure 6: IKEA's Product/Price Matrix

Pricing Strategies

The founder of IKEA Mr. Ingvar Kamprad started business when he was 17 years old. He came

up with idea of building elegant furniture at very low price. To produce furniture at low price

Mr. Kamprad came up with idea to preventing retailers and sold products directly to consumers

through large ware house and he also changed his furniture designs so that it is easy to assemble

and transport.

1. IKEA designers help in cost reduction by recycling left over material to create new

unique product example left over small pieces of wood is used to create photo frames,

wall decors etc.

2. IKEA’s Flat packing: Smart packing is used to reduce distribution, transportation and

warehouse storage cost. IKEAs flat pack allows seven times as many units transported

per shipping container than if the products were assembled. The result is reduced number

of freight shipments, emissions and transportations costs.

3. IKEA designers first set price range and work backward to achieve it. Designers look for

innovative material and manufacturing techniques to match price range.

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4. IKEA products are easy to handle and easy to assemble at home.

5. IKEA consumers pick up their own merchandise, get them billed and carry them to their

car, this helps cut down staff requirements and cost of selling.

Placement and distribution strategies

IKEA places its stores in the outskirts of major cities but keeps them close to freeways or major

road ways, making them accessible both for consumers and receiving their stocks. The other

added advantage of keeping stores away from the center of cities is cost, that helps IKEA stay

true to its mission of delivering high value at low cost. IKEA’s stores have a basic set of core

principles that are followed in all their stores internationally. They are layout and design, number

of departments, display and color, service levels to name a few key ones. Sticking to these set of

common principles helps IKEA to provide a similar shopping experience across all their stores.

Promotion strategies:

IKEA produces an annual catalogue of its product range; this dominates its in-market

communication strategy. It spends 70% of its annual marketing budget to produce 200 million

copies of this catalogue in 27 different languages. This booklet, full of pictures of its home

furnishing products is a key tool in IKEA’s marketing strategy. IKEA employs other tools to

capture the season shopping spikes. For example, here in the US, National Retail Federation

found that retail stores recorded a 12.8% growth in sales over prior-year period during

Thanksgiving holiday weekend in 2012. One in every five Black Friday shoppers bought home

furnishings or home décor products. IKEA offers price discounts and position’s its products for

seasonal sales by making it more attractive to shoppers. Another example to IKEA’s marketing

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ingenuity was its introduction of vanilla ice-cream to attract thrifty consumers into its stores in

china. Here’s the extract of the story from Wall Street Journal’s publication on March 3rd, 2006.

“When Ian Duffy was first put in charge of IKEA’s China stores four years ago, he spent hours

at the checkout line observing customers. He didn’t see many. Instead, he saw plenty of people

crowding the Beijing store for freebies – air conditioning, clean toilets and even decorating

ideas. Adding insult to injury: shops right outside were offering copies of IKEA’s designs at a

fraction of the cost. So, to lure shoppers, the Englishman launched what could be the cheapest

IKEA non-sale items in the world: a scoop of vanilla ice cream in a cone for 12 cents. Thus

began IKEA’s strategy to beguile the finicky Chinese consumer by slashing prices in China to

the lowest in the world – the opposite approach of many Western retailers.”

Organizational Leadership and Structure

The organization’s mission statement

The mission statement is reformed by a “business idea” which states

"Offering a 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."[12]

The IKEA mission statement is to create a better everyday life for as many people as possible -

with prices so low that many people will be able to afford them. Who could argue with that? It

means that IKEA can never stop expanding because that's how it will reach all the people it

wants to.[12]

IKEA's Vision: "Our vision is to create a better everyday life for the many people." [12]

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Profile of top leadership

Ingvar Kamprad – Founder of IKEA

Born in southern Sweden, Kamprad grew up on a village farm. In his teens, he discovered an

aptitude for business and began importing and selling anything he thought he could make a profit

on. Starting to trade in cigarette lighters, Christmas cards and pens, at the age of 17 Kamprad

formed a small company, which took its name from his initials and the first letters of his family

farm Elmtaryd and nearby village Agunnaryd. IKEA was born. [13]

IKEA has made Kamprad one of the world's wealthiest people with a fortune estimated at

$18.5bn. But instead of a chauffeur-driven limo, he drives a 10-year-old Volvo and whenever he

flies, even long haul, it's in economy. Rather than traveling by taxi, he's even been known to use

Stockholm's subway and public buses to take advantage of his pensioner's discount. Mr Kamprad

himself - charismatic, self-deprecating, reclusive. It is his ideas and values that have penetrated

IKEA to its core. [13]

Ingvar Kamprad is no ordinary multi-billionaire. The founder of the IKEA furniture empire

travels economy class, drives a 10-year old Volvo and buys his fruit and vegetables in the

afternoons, when prices are often cheaper. [13] Ask him about the luxuries in his life and he

says: "From time to time, I like to buy a nice shirt and cravat - and eat Swedish fish roe." [13]

Best known for his thrift and his spartan lifestyle, he washes plastic cups to recycle them. He has

just dumped his long-standing Swedish barber because he found one in Switzerland, where he

lives, who charges only SFr14 (£6) for a cut. "That's a reasonable amount," he chuckles.

His behavior could appear mean but somehow Mr Kamprad manages to carry it off. He has made

it part of the IKEA mythology and part of IKEA's covenant with its customers. Our low costs are

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your low prices, the group implies. And the image of Mr Kamprad carrying his own bags is at

one with the IKEA customer who lugs his new shelf units home. [13]. One of Mr Kamprad's

characteristics is his obsessive attention to detail. He is a remarkable, self-confessed flawed

character whose life and business philosophy is rooted in thrift, hard work and leading by

example -- with a heavy dose of humility and simplicity built in.[13]

Some of his amazing quotes are [18]

"It was our duty to expand. Those who cannot or will not join us are to be pitied. What

we want to do, we can do and will do, together. A glorious future! “

“Waste of resources is a mortal sin at IKEA.

Simplicity and common sense should characterize planning and strategic direction.

Pernille Sipers – Lopez – Ex President, IKEA North America

Pernille Spiers-Lopez, a former journalism student, traveling saleswoman and human resources

executive, embodies both the rewards and dangers of this idiosyncratic mixture. She is in her

mid-40s, married, with two children. After an "epiphany" at a women's conference in 1997 and

her appointment as IKEA's head of North American human resources in 1998, Spiers-Lopez

began radically changing the company's approach to benefits, corporate culture, chain of

command and work/life balance. [14]

On top of offering full benefits for domestic partners, in 2002 she initiated full medical and

dental benefits for part-time employees working a minimum of 20 hours a week. IKEA only

recently began deducting $5 to $ 10 a month from paychecks for individual coverage of full-time

workers ancl $140 a month for their families. Part-time workers who work less than 20 hours a

week pay $64 to $185. [14]

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Spiers-Lopez has substantially increased the number of women and minorities in management.

Forty-seven percent of the company's 75 top earners are female. The number of women on

IKEA North America's 14-member management board has increased from one-Spiers-Eopez-to

five, including Brody, IKEA's North America's marketing manager, its head of new business

development and the deputy CFO. [14]

How the organization is structured to accomplish its mission

IKEA is a large formal organization and it is best suited to a hierarchical organizational structure.

This is because; there are more employees as it goes downwards from each level. This type of

organizational structure has many levels of management. The organizational structure has been

structured according to its own function i.e. marketing, finance, human resources and sales. This

is known as a functional organization. [16]

The hierarchical organizational structure of IKEA is very similar to a tall organization structure.

Looking at IKEA’s organizational structure, the chain of command shows a clear line for

messages within functional departments, so therefore; it leads to good communication. For

example, looking at the organizational structure of IKEA, there is a clear communication

within a human resources department. The hierarchy that is followed and the value chain as

shown below helps to achieve mission of IKEA. [16]

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Figure 7: IKEA's value chain [16]

Employment Outlook for Graduates:

IKEA give down-to-earth, straight forward people the opportunity to grow as individuals and

professionals. Together they work to create a better life every day for themselves and to the

customers. The coworkers response for working at IKEA is to because for the people. So it is a

people based organization. More than 90% of IKEA co-workers know what they are here for?

Because company provides the vision and clear values that you can believe in.

IKEA is a global known home and interior retailer from Swedish origin that is still expanding

rapidly. This is the reason they're always looking for bright and talented people to come work in

their stores or start a career in a corporate function. This company wants to offer career paths that

are interesting, unique and rewarding. There are even possibilities to work abroad. IKEA offers

various opportunities to interns, recent graduates and ambitious professionals. On their career

page you will find out more about IKEA’s culture browse jobs on-line and decide if you want to

work here. This company offers great opportunities in Communication and interior design,

Customer relations, Finance, IT, etc. IKEA has a company has job opportunities in the areas of

administrative and secretarial, human resources management and recruitment, sales

representatives and purchases. For the most recent jobs, career possibilities, trainee jobs,

graduate jobs or internships, IKEA advise people to register for free or login and visit the career

page of IKEA. That page will provides you extensive information about their vacancies and will

help you decide if you would like to work for IKEA.

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Evaluate What You Have Learned

The story of IKEA and its founder Ingvar Kamprad is truly inspiring. Ingvar started out as a

young farm boy and turned around not only his fortunes but also created a company which made

annual revenue of 27.6 billion euros in 2012 alone. The success story of IKEA can be a great

role model for any enterprising individual. [15]

The success of IKEA can be attributed to their guiding vision of delivering high value at low

cost. Every step of the way in their growth story, IKEA designed its products, marketing strategy

and expansion to keep the design simple, costs lower and increase utility. The fact that IKEA

was able to build assets worth 44.7 billion euros, become the largest furniture retailer and still

manage to remain a private company speaks to be strength of the company. Not many private

companies here in the US can claim such financial health. [15]

There are many reasons that make IKEA so popular, for example, cooperating with the suppliers

from all over the world, high efficiency of logics, using “life system” to find what customer

need, and so on. Follow the concept, IKEA try their best to give the customers what they

promised: low price, well-design, creating a better everyday life for many people. [15]

As a world famous international company, IKEA is like fresh air in to new target markets such

as: Middle East Australia and China market. It not only brings new strategy and model to their

competitors, but also brings the new life style and service to the customers.

IKEA already understand Middle East, Australia and China markets more than before. By

accelerating the speeds of expansion, IKEA will get more customers; the success of IKEA in

these markets is only a matter of time. [15]

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References:

1. The IKEA growth and history. Retrieved from http://www.IKEA.com/ms/en_US/about_IKEA/the_IKEA_way

2. The IKEA home furnishing products catalog. Retrieved from http://www.IKEA.com/us/catalog/allproducts/alphabetical

3. The business case study on UK. Retrieved from http://businesscasestudies.co.uk/IKEA/swot-analysis-and-sustainable-business-planning/introduction.html#ixzz2MnK084zQ

4. Source: Retailing: Specialty, September 6, 2012 Michael Souers, Specialty Retail Equity Analyst, S&P Industry Survey

5. Source: Household Durables, FEBRUARY 2013, Jim C. Yin, S&P Industry Surveys

6. http://www.forbes.com/sites/walterloeb/2012/12/05/IKEA-is-a-world-wide-wonder/

7. https://dspace.stir.ac.uk/bitstream/1893/2579/1/Article%20for%28SB3%29%20NRWA %206-7%2011%20IKEA%20m-strategies%20%28SB%29.pdf

8. Standardized marketing strategies in retailing? IKEA’s marketing strategies in Sweden, the UK and China - Steve Burt, Ulf Johansson, Åsa Thelander

9. What kind of career will you build? Retrieved from, http://www.IKEA.com/ms/en_AU/the_IKEA_story/jobs_at_IKEA/index.html

10. Information about Bed Bath and Beyond http://www.bedbathandbeyond.com

11. Information about Williams-Sonoma http://www.williams-sonama.com

12. IKEA Mission statements, retrieved from http://www.samples-help.org.uk/mission-statements/IKEA-mission-statement.htm

13. Information about IKEA founder, retrieved from http://retailindustry.about.com/od/retailleaderquotes/a/IKEA-Founder-Ingvar-Kamprad-Quotations-About-IKEA-Retailing-And-Management.htm

14. Information about IKEA top profile leader, retrieved from http://search.proquest.com.proxylib.csueastbay.edu/docview/219787071/abstract/13C5388D966EB0FADD/24?accountid=28458

15. Value based narratives from http://search.proquest.com.proxylib.csueastbay.edu/docview/198052745/13C538DED7F77F73AA5/5?accountid=28458

16. IKEA's organization structure to achieve mission, retrieved from http://www.reocities.com/timessquare/1848/IKEA.html

17. IKEA Group yearly Summary FY12 http://www.IKEA.com/ms/sv_SE/pdf/yearly_summary/ys_welcome_inside_2012.pdf

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IKEA

Appendix 1

Figure1: *IKEA is a privately held company, so financial results are not disclosed to public.

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