IKEA

Scott Claxton, Kevin Browning, Micheal Marshall

The Beginning• Founded in 1943 • By Ingvar Kamprad • Originally sold basic household goods at a discounted

price • Opened first furniture showroom six years later • Flagship store was opened Stockholm

The Problem• If emphasis is on being cost-efficient, is the

product durable? • Is shipping apart of being cost-efficient?

Issues• Going green “lets make a difference”• First name basis “employees matter”• Cost efficiency• Prices are important. IKEA outsources the

manufacturing of it products to over 50 countries. Customer can choose piece by piece and customize their own purchase.

• To lower cost IKEA only uses top quality material for a visual effect. Lower cost material for the less visual parts.

Continued• Searched for the lowest bidder.• Shipping-“We don’t want to pay to ship air”

products are shipped in flat boxes and assembled by the customer, which saves money on both ends.

• Paying more attention to design. “Becoming more fashionable”.

• Products not made to last.• Buying in bulk.

Continued• “Often imitated never duplicated” competitors

can never match IKEA in all areas. Cost, experience and production.

Perspectives• “Then and now” IKEA has changed over the

generations. In the beginning they were more focused an economically product than they were with looks.

• Specialize their products to fit a large demographic. “Different people have different taste”.

• IKEA creates a unique experience. Stores have child care centers and are set up to resemble amusement parks.

SWOTStrengths

• Price-low cost producers of home furniture• Strives for shipping efficiency.• Fashionable. Products have become more eye-

appealing.• Outsources production to reduce prices.• Great customer service.

Weaknesses• Product durability. – does not stand the test of

time.• Quality• Reputation-people remember the old IKEA.• Spreading itself to thin to corner all markets.• Assembly- consumers want the final product

preassembled.

Opportunities• Branching out to different markets. Such as

electronics and home appliances.• Producing higher quality products that are more

accepted to the upscale customer.• A higher need for greener products- striving for

leaving less of an impact on the environment.• Reducing water usage.• Increase of recycling waste.

Threats• Other competitors offering higher quality

products.• Other companies recreating the ideas of IKEA and

their business activities. • Smaller companies taking a portion of the

business away. • Competitors offering products with zero assembly

required.

Actions• IKEA needs to strive for a better quality product.

IKEA has been known to have a bad wrap.• Strive for greener products. Reducing waste and

continuing to be as efficient as possible.• Strengthen their reputation for the American

consumers.• Continue to look for the most effective way of

producing the final product at the lowest possible cost.

Consequences• Labor costs may rise due to an increase in quality

control and research and development.• Going green can be more expensive for the

company. • Continuing to redesign products can seem costly

before seeing final results.• By using the top quality wood and other materials

on the exterior of the products for eye-appeal causes an increase in price.