The Unique Layout Of IKEA

* IKEA’s low cost structure has been the very core of its success. It’s low-cost and high-quality strategy fits with the current state of the economy. Offering convenience factors within IKEA’s stores would fit well with IKEA’s low cost structure. It maintains its low-cost business model by creating a different furniture shopping experience. IKEA supplies customers with all possible materials needed to complete their shopping when they enter the store (that are, measuring

IKEA is a world famous furnishing company known for selling Scandinavian-style furniture and other home-based goods. The company has over 230 stores, with operations carried out in over 42 countries with well over 70 000 employees. The stores themselves can occupy 410 million shoppers per year. It is a Swedish based company built on the idea of offering a wide range of well-designed, functional home furnishing products such low prices, that a majority of people will be able to afford them. The IKEA group is currently solely owned by the INGKA Foundation through a holding company, unlisted on any stock exchange.

IKEA specializes in ready-to-assemble furniture that is of good quality. It also specializes in food and other cheap accessories for the house. Because of its uniqueness and low prices for such good quality, it is very likely that consumers may deem it incomparable and thus reduces their ultimate range of choices for alternatives.

IKEA is a unique Swedish furniture company. The company we so widely recognize today for selling good quality budget friendly Scandinavian style furniture began in 1943 as merely selling pens picture frames and wallets. Ikea was founded by a then 17year old Ivor Kampard, of the farm Elmtaryd near the small village of Agunnard in Smaland, hence giving rise to the name IKEA. This area is know for its thrifty and hard working ethos and Kampard very much incorporated this into his business venture. His innovative idea was to offer home furnishing products of good function and design at prices much lower than competitors by simply using cost-cutting solutions that did not affect the quality of products.

In addition, IKEA stores are designed to have a ‘family shopping experience’ with customer services and facilities such as a restaurant, day care facilities and a Swedish shop. Parents can leave their children with them in pushchairs while they are pushing.

The high level of customer involvement is one of the key features of the IKEA concept. With their unique self-serviced warehouses, customers are required to collect their flat-packed items before proceeding to checkout. Customers are also involved in the assembly of their purchases after transporting them home in their private car. Because the company’s furniture are designed to be shipped disassembled and sold to the customer flat-packaged boxes IKEA saves a lot on shipping costs. As one of the company’s mantras said; “We don’t want to pay to ship air”.

As IKEA stores are located away from the urban areas, many customers may only patronize the stores during weekends. Hence, the store may be relatively quiet during the weekdays and highly packed with shoppers over the weekends. In the case of IKEA, although it adopts the self-service concept in their stores, it actually still maintains a high level of contact with their customers. To ease and facilitate consumer’s shopping, IKEA provides catalogues, measuring tapes, shopping list and pencils. In addition, IKEA stores are designed to have a ‘family shopping experience’ with customer services and facilities such as a restaurant, day care facilities and a Swedish shop. Parents can leave their kids in a supervised play area, or keep their children with them in pushchairs provided (Slack, Chambers and Johnston, 2007). The key point about IKEA is that it is different to the rest of its industry. In typical furniture stores similar products are grouped together and the final delivery of products to customers may take several weeks.

IKEA 's store network has a worldwide spread with developing deals and acquiring in every significant area of the world. What makes its production network truly complex is that its stores are spread crosswise over numerous nations, that it has 1220 suppliers in 55 unique nations making its furniture and that the stores are supplied from 31 focal appropriation

1. Design- IKEA designers work in exactly the opposite way from their competitors. They design their products in such a way so that they can keep the prices low. IKEA designers design every product starting with a functional need and then decide on price. With the help of their vast knowledge in innovation and low-cost manufacturing processes through a large network of suppliers, they design the final product which can fulfill consumer’s functional needs. Large volumes are purchased to push prices down even further by distributing the R&D cost. Most IKEA products are designed in such a way so that they can transport in flat packs and assembled at the customer's

Likewise people enjoy the services that IKEA offers its customers. Customers find much value in IKEA overall. They revel in the fact that IKEA has onsite promotions, low prices, unique designed furniture/products, incentives such as free shipping, in-store child care and play areas while customers shop, and many more other incentives such as an on site restaurant, extended store hours to compensate for the do-it-yourself approach, and free offerings to IKEA reward card members (Ferrell & Hartline, 2014). IKEA readily prepares its visitors for the IKEA experience by providing its customers with pencils, paper, tape measures, store guides, catalogs, strollers, and shopping bags. Value is essentially an very important aspect of IKEA. Furthermore,

Ikea is a multinational group of companies operating on a global scale in the furniture industry, offering a wide range of ready to assemble (Do It Yourself) furniture, appliances, and accessories worldwide. The company is well known and recognized for its modern designs, functionality of their products, quality services, and their eco-friendliness. Within the competitive market, Ikea aims at being better than its competitors in the market, and offers the best standards of services to its customers, as well as a wider range of products for low prices.

Cater to all age groups and amenities of store visitors. IKEA provides all necessary family services for instance, play areas for kids, restaurants, rest areas, these facilities enable people to spend all day in their stores.

For IKEA, distribution is a vital a part of the equation of making home furnishing articles at costs that square measure as low as potential. About 9,500 IKEA products are factory-made by suppliers and transported to IKEA stores around the world, typically via one in all the company’s central warehouses and distribution centers. At IKEA, distribution is all concerning creating the route from the manufacturer to the client as short as potential.

If this company is so successful and it is one of the best examples on the world, it must have really strong strategies to eliminate these problems. These strategies make IKEA successful. Inventory management is the most crucial part of supply chain for IKEA’s strategies in other word solutions. For the IKEA there are four crucial inventory management strategies which are long-term and sustainable relationships with suppliers, do it yourself assembly and flat packaging, cost per touch inventory strategy and lastly min/max inventory replenishment

Both of them are important to operate a business. The next one will be the process. The first process is the shop floor set up which is extremely important for IKEA. It can show the customers the advantage of the products and to let customer enjoy the process of buying furniture. Another process is the staff training. IKEA have to train the staff to have some professional skill and knowledge because the staffs are representing the company. Then, we can go to another action – outbound logistics. It means the good and service that IKEA provide. They provide the goods delivery service and installation service. This is important for customers because most customers do not know how to install the furniture. Sales and marketing is another primary action. For IKEA, it will be the TV advertisement, annual catalog, internet and the showroom with live demonstration. In fact, this marketing channel is the reason why IKEA is so successful in selling furniture. The last action is the service. They are now providing hotline service. They also have design consultant to help the customers. And disposal of old furniture is also a very important service.