Ikea
By: Yan • Essay • 281 Words • March 5, 2010 • 932 Views
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Submitted by petter78 on November 3, 2005
Category: Business
Words: 2617 | Pages: 11
Views: 838
Popularity Rank: 4,875
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Introduction
IKEA states in their business idea: "We shall offer a wide range of home furnishing items of good design and function, at prices so low, that the majority of people can afford to buy them"(IKEA 2005). IKEA manage to keep costs low by their superior relationship with their suppliers were they buy low-cost components in huge quantities. Together with efficient warehousing and customer selling service it passes on to customers resulting in lower prices, anywhere from 25 - 50 % lower than its competitors. However, at the same time they manage to operate with 8 - 10 % profit margins, much higher than the industry average (Norman and Ramirez.1993).
We have made a short and simple SWOT analysis to get an overview their capabilities.
Strengths Weaknesses
High variety offering пїЅ right range of products
Higher margins than competitors
Economies of Scale
Logistics - inventory management
Long term relations with suppliers
The business culture
Organisational capabilities пїЅ adapting change
Market leader - Category killer
High