Supply Chain Management Assignment - IKEA

Analysis of IKEA

EXECUTIVE SUMMARY
The purpose of this business report is to perform the analysis of Ikea that has expanded
its operations across borders into foreign market. Analysis is done by taking into consideration
overview of the company current operating position, by reviewing of company international
competitive and entry strategies used to enter other countries. Moreover supply chain
management of Ikea and the key issues or opportunities for management along with
recommendation for improvement is being specified in this report. Therefore after analysis it is
to be concluded that Company uses porter's generic strategy in order to expand business at
international level. Moreover it is also being concluded that company uses franchising entry
strategies to enter into new foreign market as it render lower financial risk of investment and also
have tight control over brand and strategy.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Overview of the company and current operating position ....................................................1
Review of company’s international competitive strategy......................................................1
Existing organisational design structure and control issues...................................................2
Entry strategies used to enter other regions/countries ...........................................................2
Operational control, production and distribution/supply chain management........................3
Management of Human Resources across borders ................................................................4
Identify key issues or opportunities for management ............................................................4
Recommendations to management for improvement.............................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
IKEA is one of the privately held international home product retailer who deals in selling
accessories, flat pack furniture, bathroom and kitchen items in their retail stores all around the
world. Additionally Ikea was founded by 17 year old Ingvar Kamprad in Sweden during 1943
and was originated in Smaland, Sweden and terms to distribute its products through its different
retail stores. This business report is specifically explains about the overview of the company
current operating position along with review of company international strategy. In addition to
this, entry strategies used to enter other nations along with the key issues or opportunities for
management is specified in this file. Lastly, existing organisational design structure along with
recommendation for management is being specified in this report.
MAIN BODY
Overview of the company and current operating position
Ikea is one of the Swedish founded multinational group which generally sells and design
ready to assemble furniture, home accessories and occasionally home service. It was founded in
1943 by Ingvar Kamprad and began to sell furnitures five years later. Whereas first mobel Ikea
retail store was opened in Smaland, Almhult in 1958. Slowly Ikea began to open its retail store in
other part of nation as well like in Japan, Australia, France, United states, United Kingdom etc.
By November 2018, it has been seen that near about 424 Ikea store were opened in near about
52 countries(Grant, 2016). Moreover Ikea has certainly met their strategic goals through
execution of diverse marketing strategic tools which has made them to achieve the success that
they are. Ikea was also awarded for introducing Scandinavian language in 2017.
Review of company’s international competitive strategy
IKEA is mainly based on Porter's Generic Strategies which was proposed by Michael
Porter. “Cost Leadership strategy” is mainly taken into consideration by Ikea who seeks for
suppliers and could fabricate well fashioned sub-assemblies at the lowest cost(Hrelja, Isaksson
and Richardson 2012). Therefore, this method of Generic strategy helps the Ikea company to
save delivery cost for both the customers and producers. In order to receive different segment
customers, this method allow the manufacturer of Ikea to reduce a lot of cost taking into
consideration the customer affordability to pay for the products. This is also termed to be Ikea's
“Focus Strategy” for low cost. As by setting competitive price the organisation could easily
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