Advantages Of Ikea International Distribution Strategy

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Renowned as THE GLOBAL TRAILER, Ikea international’s strategies consist of:
• Minimizing Production Costs through outsourcing Main Components,
• Outsourcing All Production Activities Development of Supply Chains in Low-Cost Regions
• Maintain Product Rights Establishment of Swedwood Features Est. supplier relationships in Eastern Europe (e.g. Czech Republic, Romania, Hungary) and in Asia (e.g. China, Indonesia, Malaysia
• Ownership of product rights Well switching and close relationships Allow functioning suppliers when necessary with suppliers of IKEA (est. 1991)
• Subsidiary Evolved into a supplier with advanced production facilities of its own, mainly in Eastern Europe Source: Global Sourcing Development at IKEA a Case Study Paper prepared
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Some among others are the strategy of diversification, the lowest cost provider strategy, the self-assembly strategy, and green production strategy. Ikea started as a store of pens, matches. Then it started selling home furnishing products such as assembly furniture. In addition, Ikea uses outsourcing strategy. They also contract out manufacturing for most of their products. All their production is sourced from independent suppliers. The corporate is using market segmentation strategy in every country to better meet the expectations of its customer and to better embrace their culture. It also creates customized products that meets the demand and increase their profit.
Among these strategies used by Ikea, the most important happens to be the self-assembly strategy which allows consumer to assemble their products themselves. This strategy allowed Ikea to have an efficiency in packing and saving cost on assembling and therefore reduce transport, warehouse cost and avoiding risk of
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One central theme is the alleged standardized approach of IKEA: IKEA's guiding principle is to work in the same way in every country within which it operates. The main reason is that it gives operational advantages and makes it possible - it is argued to keep the prices low and attractive for as many people as possible. Another reason is that they want to create the same image everywhere. Hence, standardization is part of their business concept, but it failed tremendously because of different countries has different culture, taste and preferences. By 2020, IKEA plans to renewably produce as much energy as it consumes in its operations. Ikea owns and operates 137 wind turbines in the world. It currently has 550,000 solar panels on its buildings and is actually planning on installing more. In 2013 it produced renewable energy equivalent to 37% of its total energy consumption. The company also plans to offer the most energy efficient home appliances on the market, at the lowest price. By 2016, its full lighting range will have switched LED bulbs that last for 20 years and use up to 85% less energy than incandescent bulbs. The corporate is also working to inspire millions of customers to live a more sustainable life at home. Ikea is reaching out to this

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