IKEA Company
IKEA Company
IKEA globally
IKEA is a Swedish-based multinational corporation that deals with designing and manufacturing of home accessories, appliances, and furniture. The company began in 1943 in Sweden, Agunnaryd town, Eimtaryd farm by Ingvar Kamprad. Notably, the firm derives its name as an acronym of the founder and his hometown(Freden, 2015). Although the business started small as a mail-order enterprise, it has grown to a worldwide company with specialization in furniture retail. Mainly, IKEA has stores in Germany, UK, USA, France, Hong Kong, Japan, China, Singapore, Canada, Australia, and Spain. Besides, it has its five biggest stores in the world in China, Sweden, and South Korea; three of them are located in China. As of 2016, the company possesses 315 warehouses in 27 nations’ also, their sales at 2010 fiscal year demonstrates a 7.7 % increment from the year 2009(IKEA /JP/EN, 2014). It has a 9,500 range of products and approximately 147,000 co-workers. The company’s total sales amount to 28.7 billion Euros.
The company has realized growth and development over the past years because it has managed to remain competitive hence realization of maximum profit. Indeed, its competitive advantage is attributed to several factors including the complex corporate structure, which enables the firm to evade taxation. Similarly, the company has a continuous product development that has allowed manufacturing of modernarchitectural designs of furniture and its other products(Freden, 2015). The research and development enable goods to remain relevant to the dynamic market. IKEA has always been sensitive to price control of its products. Its products have remained at a constant relative price with a price reduction during the period of global expansion.
In order to provide customized services, IKEA has a relatively similar design for its stores, which is user-friendly. Mainly, the warehouses are conspicuous due to the blue colors and yellow accents. They are built in a one-way design that enables the client to see all the products in the entire store, unlike other shops that lead their customers to the products sought directly. The majority of stores are built outside the stores because they require the significant size of land; they consist of a restaurant and a playground as well.
IKEA in Saudi Arabia
The multinational company has several stores in various countries including Saudi Arabia. Notably, the IKEAs entered the Saudi market in 1983, and its’ stores are located in Jeddah, Dhahran, and Riyadh. The Dhahran warehouse was built recently in 2008. Nevertheless, the Jeddah and Riyadh have been rebuilt and relocated to give way for expansion. The retail firm is focused on providing the furniture, appliances, and home furnishing at a lower price that the majority can afford (IKEA /JP/EN, 2014). The IKEA has recently faced criticism after removing female pictures from its catalog
Vision and Mission
Notably, IKEA has a vision of creating a better everyday life for many people. In order to realize the vision above, the firm is committed to offering a broad range of well-designed home furnishing products at low prices that would enable the majority of people able to afford them. Therefore, its’ mission is divided into various sections that include achieving quality through affordable prices for all the clients and investing in highly-automated manufacturing that will result ina significant volume of production (IKEA /JP/EN, 2014). Lastly, IKEAaims to achieve equality by building long-term supplier relationships
IKEA products and services
The company has an extensive range of goods that include ready-to-assemble furniture, appliances, and home furnishings. IKEA preferred production of furniture in parts because of it would facilitate ease packaging, shipping, and transportation to the various destinations. Besides a range of products, the firm provides some services that support massive purchasing of their products. The company has given either one or two Sweden names to their products to enable easy identification and facilitate customer-oriented services.
Notably, although the majority of the goods are flat-packaged to facilitate easy transportation, the company provides home delivery services at a low price(Ikea.com, 2014). Thus, the client can just place an order, and relax as he or she waits for the products. In addition to above service, the company provides people to help the client in locating, lifting, and loading thepurchased products. IKEA gives assembling services for the furniture parts bought; therefore, the client should notbe concerned about putting together the parts. In case one wants anew kitchen makeup, the company provides services of removing the old kitchen furnishings and installing new ones. Besides, the removal and return of mattresses services by IKEA enables one to earn a coupon for the old mattress. The firm accepts the return of products within 180 days for family members and 60 days for other as long as they are in good condition as the time bought(Ikea.com, 2014). Other services by IKEA include restaurants that offer Sweden and local dishes, children’s playground, sewing and kitchen measuring services. Lastly, the company provides a client-oriented payment method; one needs to talk with the employees in charge for detailed information.
All products offered by IKEA are the outdoor furniture, baby andchildren's products, eating, and bathroom storage. Accordingly, the first category of goods include umbrellas,grills, gazebos, textiles, lounging and relaxing furniture, cushions, and outdoor floorings. The items that fall in the second category are the cribs, crib mattresses, baby’ textiles, tableware, toys, chairs, safety, small furniture, desks, mirrors, children’s lighting, and changing and nursing tables. The products that fall under the eating group are the flatware, serve ware, table linen, napkins, dinnerware, coffee, and tea(Ikea.com, 2016). Lastly, the bathroom storage goods comprise of the sink cabinets, sinks, faucets, and bathroom accessories and storages. Other products by the company are the desks, mirrors, beds, mattresses, and chairs. Notably,a diverse variety of chairs available includes office, junior, dining, café, armchair, and dining chairs.
The KSA’s retail industry demonstrates impressive performance, and it expected to realize approximately 11% economic growth per annum. So far, the industry performed to its best in the year 2015, which it achieved 18% growth (Scott, 2016). According to Porter's five forces that dictate the viability of business, KSA retail industry is a promising place to venture.
Mainly, the industry has a low competitive rivalry because, for a long period, the country's economy has largely depended on oil production. The oil industry makes the 80% of the KSA’s annual GDP; thus, they are few retail companies in the country(Scott, 2016). Foreign investments will enjoy low bargaining powers of both the suppliers and the customers; therefore, the businesses will flourish. Notably, they are many potential suppliers in the international market, which empowers the firms; conversely, the retail sector is relatively untapped giving more power to businesses(Arline, 2015). Besides, the government has enabled a smooth entry to the market by withdrawing some restrictions to the foreign retailers. The KSA government allows a 100% business ownership to a foreign investor (Scott, 2016). Now, the retail investors will enjoy some monopoly because the retail companies are still few. In order to secure their services and products from switching, the investors can create a good relationship with their clients by providing unparalleled services and good quality goods at the best price for both parties. Lastly, KSA is characterized by relatively young population with high purchase power because of much money at their disposal (Scott, 2016).
References
Arline, K. (2015). Porter's Five Forces: Analyzing the Competition. Business News Daily. Retrieved from http://www.businessnewsdaily.com/5446-porters-five-forces.html
Freden, J. (2015). Founder of IKEA, Ingvar Kamprad - The Real Story. Sweden.se. Retrieved 11 April 2016, from https://sweden.se/business/ingvar-kamprad-founder-of-ikea/
IKEA /JP/EN, (2014). Company Information - IKEA. IKEA /JP/EN. Retrieved 11 April 2016, from http://www.ikea.com/ms/en_JP/about-the-ikea-group/company-information/
Ikea.com, (2014). IKEA services - IKEA. Ikea.com. Retrieved 11 April 2016, from http://www.ikea.com/ms/en_CN/customer_service/ikea_services/ikea_services.html
Ikea.com, (2016). All Products - IKEA. Ikea.com. Retrieved 11 April 2016, from http://www.ikea.com/us/en/catalog/allproducts/
Scott, A. (2016). Saudi retail sector is its success story. The National Business. Retrieved from http://www.thenational.ae/business/retail/saudi-retail-sector-is-its-success-story
