IKEA Is Private International Companyâ€Free Samples for Students

Question: Explain IKEA Is Private International Company? Answer: Introduction IKEA is private international company retailing home products such as accessories, flat pack furniture, kitchen, and bathrooms. IKEA Company offers the best flat-pack design furniture which has made the company to be world largest furniture retailer. In 1943, 17-year-old Kamprad Ingvar formed IKEA in Sweden. IKEA is controlled by the Kamprad family but owned by the Dutch-registered foundation. The chain store of the company comprises 301 stores most of them in the Australia, Asia, North America and Europe (Hubbard et al. 2014). In the smaland, the people have a reputation of living frugally and have a good reputation of working hard because of the thin soil and limited resources. The innovative idea of the Kamprad was to use simple price cutting method to offer excellent products at affordable price and much lower than the competitor. The name IKEA comprises name initials of the village and farm where Kamprad grew, and initials mean Ingvar Kamprad, Elmtaryd and Agunnaryd. The INGKA Holding which is a private and for-profit organization oversees the operations of the IKEA including the management of the stores, manufacture, and design of its furniture (Hill 2011). Franchisees operate the remaining 30 stores of the Ikea beside INGKA Holding Company (Grant 2016). Customers segment IKEA group target mainly the small business, college student, and very conscious customers to buy the goods. The IKEA business idea, market positioning market, and vision provide the framework regarding the communication marketing of the IKEA all over the world. The IKEA business idea includes to offers functional home products with a full range of design at a relatively lower cost which will make many people acquire them. According to IKEA vision is that low price but not at any cost. IKEA needs to sustain the business and will not sacrifice its principles in the line of providing and creating an affordable price. The Ikea concept Offering a well-designed, lower cost and functional products is the mission of the IKEA. IKEA makes people live a better life since they don not sell expensive products which would suit only rich people (Morris et al. 2015, p.30). Similarly, the concept guides the designing, manufacturing, assembling and selling of the product to the consumers. Value proposition IKEA value proposition is experience on the site of the children and the whole family. Also, the company sells affordable products at the right price. The product is easy to assemble and transport by the consumers (FitzRoy et al. 2012). Child care Children aged between three to ten years have different playing sections with the name smaland which is free of charge. The area of the play comprises the cartoons, slides, seesaws and ball pit. IKEA range Due to the demands of the core activities such as storing, sleeping, eating, socializing, The Company is in a position to solve the need at small cost. Functional The main aim of the company is always to make products that will help many people. Thus, IKEA provides and improves the life of their customers without affecting their income. Design The designing of the IKEA layout is such that the customers can see the entire premises, unlike the traditional retailers. For instance, the building is large with yellow accents and few windows (Percy et al. 2016). Even though they are other sections of the showroom, the setting of the displays of the building is useful so that the customer check the goods that they need. Stores sell some of the product at a relatively reduced price or a discount. It applies to the products such as returned, showcased or returned goods with no return policy. In the United Kingdom, the use term bargain corner refer when the Ikea communicates to their consumers on the environmental policy issues. Brand management Associations of the trademark and the reputations of the company rely on the reasonable and emotional values of the consumers (Frynas and Mellahi 2015). The Ikea brand image is a result of the close relationship between the coworkers at all levels globally. Lower price: the Ikea can make a real difference when it provides an appealing product that represents values for the consumers cash (Stadtler 2015, p.10). Additionally, the company creates a good relationship between the company and suppliers by purchasing quality materials at relatively lower price. Convenient shopping: the Ikea stores offer everything under one roof. Right quality: the Ikea makes sure that the product undergoes test and that they meet the international standard safety. Swedish Ikea: the Sweden furniture is very light. Similarly, their welcoming in the Swedish style is practical, straightforward and informal. Distribution channel Ikea establishes a right platform to create customers loyalty through the use of the super stores, Ikea family description, Ikea stores and websites and catalog. Approximately 1600 suppliers manufacturers and transport around 10,000 products to the 186 Ikea s stores worldwide (Olsson et al. 2013, p.1135). The time frame is necessary for the Ikea operation from the manufacturer to the user. Currently, Ikea operates 27 distributions sites in 16 countries. Then delivering of the products around the world in the 186 stores: 21 franchise and 165 IKEA groups stores (Jonsson and Foss 2011, p .1080). Catalogue The publishing of the catalog is in 27 languages for 36 countries in 55 editions. The publishing of the first list was in 1951 in Sweden. The IKEA Communications AB produces most of the catalogue in Almhult in Sweden where it operates a large photo studio. Ikea uses 10- 15 % of the post-consumer waste to print catalog on the chlorine free paper. Loyalty programs The Ikea family which is orange in color and free of charge, is one of the loyalty card programs. Additionally, Ikea take off 25% of the price of the commission of various products on the presentation of the card (Rosenbaum-Elliott 2015). There is also printing and publication of Ikea family live magazines which supplement the catalogs and card. Better efficiency at lower prices Minimizing space means that transportation will be high. For example, stacking of the kettles upside down that will make ten kettles to fit rather than six pots. Air freighting of the product is less than one percent. Transportation of the product by the road is 60 percent, 20 percent on the sea and 20 percent on the rail. The company projections are that in the next three years transportations will comprise 40 % by the rails all over the Europe. Minimum viable product (MVP) In the product development, the minimum viable product is when consumers buy the products and give quick feedback to the manufacturer. The creation of the ideas and innovation is important but putting the minimum viable product into consideration is important. Therefore, the viable product is one who possesses enough features for the development in future. For instance, the Ikea groups deal with the customers directly. Thus, in a case of the introduction of the new product in the market, the managers can get the information very fast regarding the status of the product. Customers relationship Ikea focuses on the providing exclusive discounts and offers to the consumers. Additionally, there is unlimited access to the store .Assembling of the product to the customers at free cost. Similarly, there is restaurant for consumers to buy foodstuffs and offers free child care. Restaurants Many IKEA stores comprise the restaurants which offer traditional Swedish foods such as lingonberry, meatballs and cream sauce. It offers refills of the soft drinks, coffee, and tea in most of the stores. Besides, they provide hot dogs selling at 1$ and drinks along with varieties food such as local cuisine and lingonberry. Timings The long opening hours of their stores are exceptional. IKEA publics opening tend to be longer since they operate at evening in the most of the countries of which many retailers company does not do the opening. IKEA stores restock and maintain during the night, and this makes the company operate in 24 hours a day (Wilson and Gilligan 2012). For instance, the Ikea Croydon has longer opening hours globally from Monday to Friday (10 am -12 midnights). Key activities Ikea focuses on the extensive advertising and marketing through media. Additionally, the designing of the product is excellent with are also affordable. Also, the manufacturing of the Ikea is done by the company itself without any outsourcing or subcontracting. The Ikea focuses on the printing media which contributes to the success and values of the company. The store: it is the primary place for the communicating and presenting the range of the product at an affordable price. The Ikea product line: Ikea uses the entire communication channel to sell the product line. Catalog; around 70% of the marketing budget goes to the catalogs .the total circulation of the catalogs were 110 million last years, productions in 38 different editions comprise 17 languages over 28 countries (Mangan et al, 2016). Target market: advertising, public relations, and records allow the deep penetration of the market. Little productions take place in the Sweden although it remains the fourth largest supplier in Poland, Italy, and China. Key resources The primary key resources of the Ikea include the physical including; skilled and qualified personnel, infrastructure: megastores, furnitures, trucks, lifting tools, and equipment. The company is creating the manufacturing process, capturing the main streams and implementing the economies of the scale that corresponds to the cost due to material exceptions and explosion of the human population in the 20th and 21st century. Kamprad uses the familiar design concept to refer to the company applying the integration approach towards designing and integration. Key partnerships Harvesters or wood makers, transport and trucking firm comprise the key partner. For the efficient delivery of the product to the different consumers, the companies integrate all the activities so as to reduce the operating cost. Revenue Structure One of the funds that keep the Ikea's going is the generation of the revenues through the sales of it furniture globally. Rejections, discounts or the products used over the counter revenue are important in raising the income of the company. Additionally, various stores have a restaurant beside them offering food such as drinks and foods stuff. Therefore, the restaurant outlets make a generation of the cash easy in the process of selling the product. Similarly, the Ikea can raise the money through the sales of the old accessories such as towing equipment, yarn, and tools. Cost structure The cost structure includes the raw material, transport, advertisement, manufacturing, and labor. In the process of making the final product the material are essential. Ikea takes care of the transportations of the product: will allow accommodation of large volume of the product which makes the company to enjoy large economies of the scale. Ikea employs qualified personnel so as to extend the idea of the innovation and creativity. Therefore, the labor cost is one of the expenses that the company incurs. The advertisement is necessary so as to create awareness to the consumers. Ikea incurs the cost of advertising such as in the internet, TV, and productions of the catalogs which lists the types of the products and their respective price. Market feasibility Wal-Mart, Sears, and American wood mark are Ikea chief competitor. The customers get the flat pack product at the Ikea stores and malls. There is an increase of 7.1 percent growth rate from the previous year to a $ 34.2 billion (Harrison and John 2013). Ikea is opening new city- center pick up point and stores and also out of the town warehouse. Sales from already established stores increased by 4.8%; the company continues to open new target stores in 2018, Ikea plans to open a store in the Slovenia, and for the last one year it has opened stores in Morocco. Ikea plans to achieve sales of $ 56 billion in 2020. But the current growth rate of the 7.9% would make the company not reach the target sales until two years later (Kotler et al. 2015). Technical feasibility Ikea Company is creative and innovative by itself. They design and produce a product and distribute them to their consumers directly through their stores. Apart from the designing the product by themselves, they also operate with the franchisee's group, but the franchisees have to pay revenue to the company. Ikea produces their product through an in-house process so as to know how to reduce the cost and usage of the by-product to makes other items. To offer large volumes of the products at lower prices, Ikea operates the distribution on their own. The time is necessary to provide the product at right time frame to create customer loyalty. 165 Ikea's stores and 21 franchised stores do the delivery of the company (Ungson and Wong 2014). On the environmental issues, Ikea has a strategic approach so as to improve the environmental issues of the enterprise. Some of the environmental issues include reductions in the usage of the formaldehyde in the products. There is a replacement of the P VC polyvinylchloride in the lamp shapes, furniture, home textile, and wallpapers. Also, the company wants to reduce the stuffing and framing by using the air-inflatable furniture which will further reduce the transportation volume and weight. Finally, it will reduce the chromium use in a treatment of the metal surface. Financial feasibility Ikea projects growth in the revenue of 85% by the 2020 and also increase the numbers of the users who enters the stores. The primary source of the Ikea capital is through founding owners equity; acquiring from the proprietors saving or sales of their personal item. The advantage of the founding owners equity is that its usage is flexible and investment is in the long term .The pricing of the Ikea product is different because of the variety of the outputs. For instance, the kopardal queen bed frame cost $ 129 (Kapferer 2012). Therefore, the listings of the product with their respective price are in the catalog. The main aim of the Ikea is to lower the price of the product as lower as possible in future. The revenue at the end of the year and the loyalty of the 3 % from the franchise is what keep the company in the business. Ikea focuses on the long term goals and this make it to be competitive as a private corporation. Human resource feasibility The Kamprad Ingvar set an owners structure so that it can stand for the long term approach and independence. Stichting INGKA foundations in the Netherlands help to provide the charity funds. The INGKA Holding is the parent of the Ikea group, while the Stichting INGKA Foundation possesses IKEA group management (Truss 2012). In the advisory services of the IKEA group companies is through the Ikea services B.V. and IKEA services AB (Lasserre 2012). Ikea encourages diversity and inclusion, culture and values. The uniqueness of the company is what makes it in the better place. The Ikea uses both the intrinsic and extrinsic techniques to motivate its employee. For those aiming for the managerial role, the companies come in the educational assistance and more so medical care. Apart from that, the companies continue to make its employee realize their full potential by delegating important role and task; achievement of the personal goals, self-actualization and getting better each day. Ikea trains its employee so as to increase the efficiency and to equip the workers with right skills to meet the customers demands in the future (McFarlin and Sweeney 2014). 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