Ikea Supply Chain Analysis
Coursework
Supply Management
IKEA Supply Chain Analysis
Name | Sun Yifei | | Wu Yanli | | Zhang Yuting | Word CountSubmission date | Zhao Yandong4114April 18th, 2012 |
Introduction
IKEA is short for Ingvar Kamprad Elmtaryd Agunnaryd, as the Swedish furniture corporation, which with more than 200 stores in over 30 countries (Chen et al., 2011). In 2011, IKEA had 23.5 billion euros in sales with 2.7 billion euros net income and 127,000employees worldwide (IKEA sustainability report, 2011). The company is known for being good at cost control and continuous product development, which allows keeping its prices competitive and continue its global expansion (Jonsson et al, 2010). In order to have a better understanding, this report will use Porter’s five forces analysis to analyse the organisation and indicate some general potential challenges within IKEA’s supply chain management. Then it will propose the further challenges with a number of practical suggestions on Make-Buy, supplier selection and supply relationship.
Porter’s five forces Analysis 1. Power of buyers
IKEA is being well known on high quality and low price (IKEA sustainability report, 2011). They are trying to concentrate on satisfying their customers’ requirements in all aspects and conducting marketing approach on customer needs, especially for quality services (Jonsson et al, 2010). In addition, IKEA has a great public image to customers due to exploiting corporate responsibility on their product quality control (Ikea.com, 2012).
Furthermore, the most of buyers have a significant impact on IKEA’s product line (Chen et al., 2011). For instance, in 1960s, IKEA created and developed a new type of model furniture package – self-assembly furniture, which is the furniture is unassembled in flat cartons, in order to make buyer to transfer and handle the furniture easier. This ability is to fit the direct feedback and requirement from the buyers (Caplan, 2006).
To sum up, there is little bargaining
Supply Management
IKEA Supply Chain Analysis
Name | Sun Yifei | | Wu Yanli | | Zhang Yuting | Word CountSubmission date | Zhao Yandong4114April 18th, 2012 |
Introduction
IKEA is short for Ingvar Kamprad Elmtaryd Agunnaryd, as the Swedish furniture corporation, which with more than 200 stores in over 30 countries (Chen et al., 2011). In 2011, IKEA had 23.5 billion euros in sales with 2.7 billion euros net income and 127,000employees worldwide (IKEA sustainability report, 2011). The company is known for being good at cost control and continuous product development, which allows keeping its prices competitive and continue its global expansion (Jonsson et al, 2010). In order to have a better understanding, this report will use Porter’s five forces analysis to analyse the organisation and indicate some general potential challenges within IKEA’s supply chain management. Then it will propose the further challenges with a number of practical suggestions on Make-Buy, supplier selection and supply relationship.
Porter’s five forces Analysis 1. Power of buyers
IKEA is being well known on high quality and low price (IKEA sustainability report, 2011). They are trying to concentrate on satisfying their customers’ requirements in all aspects and conducting marketing approach on customer needs, especially for quality services (Jonsson et al, 2010). In addition, IKEA has a great public image to customers due to exploiting corporate responsibility on their product quality control (Ikea.com, 2012).
Furthermore, the most of buyers have a significant impact on IKEA’s product line (Chen et al., 2011). For instance, in 1960s, IKEA created and developed a new type of model furniture package – self-assembly furniture, which is the furniture is unassembled in flat cartons, in order to make buyer to transfer and handle the furniture easier. This ability is to fit the direct feedback and requirement from the buyers (Caplan, 2006).
To sum up, there is little bargaining
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