A privately held international retailers of home products, being the largest retailers of the world they provide home products from furniture, fabric, glass, kitchen and bathroom accessories at an affordable price. Their vision being 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, one needs to develop methods that are both cost-effective and innovative. This has been IKEA’s focus. Maximizing the use of raw materials and production adaptation to meet people’s needs and preferences have meant that their costs are low. The IKEA way of doing things is to pass these cost savings on to customers. This idea came into being in 1943 by Ingvar Kamprad in Sweden who laid basis of IKEA and then afterwards it was owned by Kamprad Family. Data of august 2009 shows currently it has 301 stores (outlets) in 37 countries (scattered in Europe, North America, Asia and Australia), with more than 135,000 employees. (Source net) All products are in flat packed form to be assembled by consumer himself (saving space and time from in store assembling, easy handling and transportation and reducing packaging cost.
This graph clearly describes IKEA’s progress in terms of financial point of view but in this recession period what could be the factors it has adopted to increase its progress towards a progressing/ profiting organization. Multiple factors can be mentioned starting from its outlets structure up to higher level management all working in a close coordination. They modernized their structure at every step ultimately profiting the organization and customers in terms of providing cheap furniture accessories.
IKEA outlets are often on “one way lay out pattern” to encourage customers to see the store in its entirety. A self service way is introduced as customers collect shopping cart, proceed to open-shelf warehouse (for smaller items) then proceed to furniture warehouse where they could collect previously noted showroom product (but in a flat pack form). Furniture warehouse is usually located adjacent to main store. Ultimately proceeding to cashier for due payments.
All trading of IKEA is through its outlets as well as internet, called as Clicks and Mortar or Bricks & Clicks or Bricks, Clicks & Flips (Catalogues). The usability of both of the ways for sales proved advantageous for the IKEA and for consumers as well: Developers Perspective Profitability of IKEA Management Perspective Increased / better productivity User Perspective Accuracy/ satisfaction/ cost effective To fulfill the above described criteria products have be efficient, effective as well as user friendly. Flaws of this system include Security problems, staff retraining or new technical staff, more employees loosing jobs and redundancies. Establishment of e-business is still advantageous for IKEA as counter mediation made payment available to them before goods are delivered, goods are supplied in time further reducing inventory cost,
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