Strategic Location Management: A Case Study of IKEA's Global Success

This report examines IKEA's location management strategy, highlighting its self-service model, inventory management, and strategic placement of stores in accessible areas outside urban centers. The strategy emphasizes minimizing costs, ensuring product availability, and adapting to customer needs through flexible operations. IKEA's layout, which combines showroom and warehouse functions, allows customers to easily browse and select items. The company focuses on efficient goods flow and customer loyalty by managing inventory and logistics effectively. The analysis also covers how IKEA leverages its location strategy to introduce new products and services, enhancing customer experience and maintaining a competitive edge.

Question: Ikea location management strategy decision
IKEA is one of the international home furnishing brand retailer which was found in 1943.
The company is one of the finest and the largest furniture retailer, handling its store in countries
like China. The array of entrepreneurs have been able to set up a proper home-transport service
for the customers, with assistance of home to assemble the IKEA furniture. The layout strategy
includes self-served shipping mode priorities with low pricing and high quality standards (Yu et
al., 2016). The layout is to serve the priority with “self-serve” warehouse. The goods are stored
and if the customers are interested to buy one, then they can pick it or ship the goods to their
home. Considering the IKEA inventory, the location management of the products is through
handling the maximum and minimum settings of the products to be ordered at a particular time.
The process is to meet the customer demands with minimizing he orders for the few or too many
products (Mendibil et al., 2016).
IKEA stores are located away from the different urban areas so that it is easily accessible to the
people. The company is able to handle the inaccessibility to the customers where there are fewer
customers in the rainy season. Hence, with this, the location management strategy of IKEA has
been to give a better advantage to the people where they have a unique layout for the parking as
well. The company is able to manage with the self-service options depending upon the use of
minimized items with bulk storage in different areas. IKEA has been able to work on providing
the better strategy of operations with ensuring that there is a constant compatibility and
dependability with the target groups (Scott et al., 2018). The flexibility in the operations of IKEA
has been able to change the customer requirements as the location management strategy has been
helpful to introduce new products and services to the customers. IKEA stores have been able to
work on the warehouse with taking hold of the main showroom floor. The customers are able to

easy browse through the different items which are in demand by the people. The products are
then handled from the location of the floor where the racks are there so that the people can easily
reach and take what they want (Ivanov, 2019). The cost per-touch has been for the inventory
tactics, where the customers tend to select the furniture and then retrieve the packages for the
management of the inventory. The duties of the logistics personnel are mainly to monitor and
then record the delivery to check the delivery notices and then sort or separate the goods
depending upon the sales or the designated overstock locations. Overall strategy is to ensure the
flow of the goods in an efficient manner, where IKEA stores are mainly to handle the high sales
and then enhance the loyalty of the customers.
References
Ivanov, D., Tsipoulanidis, A. and Schönberger, J., 2019. Operations and Supply Chain Strategy.
In Global Supply Chain and Operations Management (pp. 81-110). Springer, Cham.
Mendibil, K., Rudberg, M., Baines, T. and Errasti, A., 2016. Operations Strategy and
Deployment. Global Production Networks: Operations Design and Management, p.61.
Scott, C., Lundgren, H. and Thompson, P., 2018. Guide to strategy in supply chain management.
In Guide to Supply Chain Management (pp. 129-142). Springer, Cham.
Yu, Y., Wang, X., Zhong, R.Y. and Huang, G.Q., 2016. E-commerce logistics in supply chain
management: Practice perspective. Procedia Cirp, 52, pp.179-185.