Ikea supply chain case study

With 31 trading service offices in 26 countries, allowing IKEA to be close to their suppliers, which numbers up to in more than 50 countries. The products are designed so that it can be packed as tightly as possible to lower handling and space cost. Furthermore, IKEA outsources globally and resourcefully: For example, in a table and chair set, you will find that the shelves are from Russia, chair from Thailand, computer desk from Poland, screw from China and carpet from India.

Ikea supply chain case study

Further expansion into developing economies Growing online sales Expansion to growing grocery market Threats Growth of average consumer income Strengths Customer knowledge.

IKEAs Global Sourcing Challenge: Indian Rugs and Child Labor (A)

One of the key competitive advantages IKEA has is its extensive knowledge about the customers. The company understands the purchasing factors that influence customers to buy and implements the best practices to induce that decision. IKEA offers low prices and a huge range of products.

Designers constantly introduce new design products that look stylish in the eyes of customers. All the products are designed so it would be easy to Ikea supply chain case study and assemble.

Moreover, the company offers the widest product range and positive shopping experience. All of these factors are aligned with what customers want and need and which results in higher sales. Without such extensive customer knowledge and best practices to benefit from that knowledge, IKEA would be unable to outcompete its current competitors.

Constantly using innovations to drive costs down. Low prices are the cornerstone of IKEA business idea and the the company always try to do things as efficient and cost-effective as possible. To drive costs down all the time, the company must find new and innovative ways to do that and to incorporate them in its businesses model.

IKEA is committed to long lasting relationships with its suppliers. In this way, the company can order large volumes and benefit from lower prices and greater quality while suppliers are assured of guaranteed orders.

IKEA sources its materials close to suppliers to reduce transporting costs. The company also uses IWAY approach to closely integrate suppliers with its supply chain. All the efforts of closely integrating supply chain results in lower costs and a competitive advantage.

Brand reputation and market presence. The business operates stores in 38 countries and is present in the major world markets. More than million customers visit IKEA stores every year. Worldwide market presence and strong brand reputation ensures that customers will often choose IKEA over its competitors.

In addition to its furniture products, the company operates restaurants, houses and flats. The company has been criticized many times for issues like poor treatment of employees, questionable advertising practices or lobbying government authorities.

Ikea supply chain case study

Negative publicity decreases brand reputation and customer loyalty. Low quality of products and services. IKEA is unable to find compromise between continuous cost reductions while maintaining the same quality of products.

Standardized products attract fewer customer segments. Therefore, the business inability to offer better quality more customized products allows its competitors to fill that niche and fortify their position in it. Opportunities Further expansion into developing economies.

There are great opportunities for IKEA to expand into Brazil, Mexico, Indonesia and Malaysia to increase its presence in these markets to sustain future growth. Online sales grow constantly and with million visitors to its website IKEA could exploit this opportunity and benefit from increased sales and lower costs.

Expansion to growing grocery market. The current trend of eating healthier food has resulted in higher demand for grocery products in many developed economies.

IKEA has an opportunity to expand its grocery business by introducing more grocery stores in its current retail places. The company is already successfully managing its food outlets, so this expansion opportunity would be well aligned with the current operations.

These large retailers have similar specifics as IKEA, including low costs, well managed supply chain and huge market presence and can easily gain some market share from IKEA.

Ikea supply chain case study

Growth of average consumer income. Growth of average consumer income means that people buy less low price and low quality products, which is exactly what IKEA offers in its stores.

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With the rising income people will be less attracted to IKEA and will turn to retailers that offer higher quality homeware products. Best Global Brands in While sustainability is central to research on supply chains, there has been relatively little research on diversity and impact on supply chain sustainability performance.

IKEA Invades America Case Solution, Introduction This case study is about the world’s top furniture retailer, IKEA. It was founded in the year ; the founder of the company is Ingvar Kampr. through the whole supply chain are the home furnishing company IKEA.

Already in the company explored the advantages of flat boxes which are one of IKEAs main concepts. 3. IKEA’s supply chain enables the company to realize its vision of providing well designed, functional products at prices accessible to virtually anyone.

IKEA’s supply chain enables the company to realize its vision of providing well designed, functional products at prices accessible to virtually anyone. According to a case study produced. Feb 29,  · Case Study 2: IKEA. Posted on February 29, April 28, by okayteam.

Q3a. Which option(s) should IKEA Group pursue to address IKEA’s Wood Supply Chain sustainability? Explain. Among the four options, option 1 is the best option for IKEA to address its wood supply chain sustainability.

After this case study, we found. · IKEA: Logistic Study. 2 TABLE OF CONTENTS CASE STUDY OF CIMIR SOFA MANUFACTURERS _____ 12 IV. PROBLEMS ABOUT SUPPLY CHAIN _____ 14 IKEA’s supply chain consequently has a global spread with both sales and purchasing in all major regions of the world. IKEAs growth has been great and sales regardbouddhiste.com

IKEA Supply Chain Case Study Essay Example | Graduateway