21 March 2013
Ikea Case Analysis
IKEA was truly built from the ground up. It was started in 1943 by Ingvar Kamprad when he was 17 years old, from a shed on the family farm. In the beginning, the company sold fish, Christmas magazines, and seeds to eventually add pens, then furniture to its product list. In the beginning the company had used the milk truck as part of its delivery system to get orders to the train station. In 1953 when the milk truck changed it route, it was no longer available to get items to the train station. This motivated Ingvar to invest in a nearby idle factory and convert it into a warehouse. By this time, with the help of the free catalog which started back in 1949, the business was
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This and was the largest furniture store in Europe. The store location was well planned and worked well, so future stores location selections were patterned the same way; situated on the outskirts of the city with plenty of parking space and good access roads. The store generated so much traffic that the store checkout procedure was redesigned. The new plan was to create a self-service pick up solution. This allowed shoppers to load trolleys with their purchases in the warehouse and take them through the checkout, which reduced the wait time for a worker to have to go pull item while the customer waited. This became the standard at all stores. Over the next several years (1965-present), IKEA opened stores throughout the world, and continues to evolve. With 332 stores in 38 countries (as of 10/2011), IKEA had many barriers to overcome. One would be when the opened a store in the US in 1985. There was an inconsistency on what size was needed due to the differences in the metric system and the larger sizes that the Americans were used to. To add to this, was poor locating of stores, smaller stores were built and shipping of products drove prices up. These obstacles were overcome by redesigning products, relocating and making stores larger, and sourcing gods from lower cost locations and pricing in dollars.
INTERNAL STRENGTHSInnovativeCreativeCost orientedMany product lines | INTERNAL WEAKNESSESLack of research for new stores | EXTERNAL OPPORTUNITIESExpand