E- Business of Ikea
IKEA is a Swedish based furniture and furnishings company that sells “everything from cutlery to kitchens” (Jones, G 2007). The business revolves around the philosophy of “We do our bit, you do your bit and together we save money”. The company’s success is based on its ability to adapt to change, sensitivity to customers and acting sensibly with suppliers. In 2006, IKEA made plans to expand their e-commerce strategy to allow people from the United Kingdom to purchase goods online (Kemp, E 2006). However, e-commerce has had advantages such as increased accessibility and disadvantages such as increased costs, and by late 2007, IKEA’s Chief Executive Officer and President, Anders Dahlvig announced that there would be no further investment in online stores (Carroll, B 2007). This suggests that the e-commerce site performed poorly (Paul Holding, cited Jones, G 2007).
Values at the core of IKEA
IKEA integrates distribution with sales (Kapferer, J 2007), but in some cases also the manufactures the products. The logistical system, for managing the flow of components into warehouses and transferring the products to its stores, is reputed as one of the most refined in the world (Kippenberger, T 1997). There are 2300 suppliers to the business, located in several continents, such as Europe and Asia (Klevås, J 2005), and all are given technical assistance, help to secure loans, engineering support, and are aided to boost production to global standards (Kippenberger, T 1997). IKEA designers work with producers to find ways to save costs, as well as attempting to avoid waste in their designs, which is consistent with the values underpinning the business model.
IKEA values design for low cost production, bulk buying, flat packaging (Klevås, J 2005), and providing functional products at a very affordable price, while their customers provide self service, home transport and self assembly. This works in favour of both participants in an exchange, as it saves both the company
Values at the core of IKEA
IKEA integrates distribution with sales (Kapferer, J 2007), but in some cases also the manufactures the products. The logistical system, for managing the flow of components into warehouses and transferring the products to its stores, is reputed as one of the most refined in the world (Kippenberger, T 1997). There are 2300 suppliers to the business, located in several continents, such as Europe and Asia (Klevås, J 2005), and all are given technical assistance, help to secure loans, engineering support, and are aided to boost production to global standards (Kippenberger, T 1997). IKEA designers work with producers to find ways to save costs, as well as attempting to avoid waste in their designs, which is consistent with the values underpinning the business model.
IKEA values design for low cost production, bulk buying, flat packaging (Klevås, J 2005), and providing functional products at a very affordable price, while their customers provide self service, home transport and self assembly. This works in favour of both participants in an exchange, as it saves both the company
References: “IKEA rolls out UK e-commerce site”, 2007, Marketing, No 4, http://www.proquest.com/ (accessed April 1, 2008) Kapferer, J 2007, Competition of Brands - Or of Business Models? Advertising Age, 16, http://www.proquest.com/ (accessed April 14, 2008) Kemp, E 2006, IKEA appoints Agency.com. Marketing, No 10, http://www.proquest.com/ (accessed April 1, 2008) Kippenberger, T 1997, “The Story Of IKEA”, The Antidote, vol 2 iss 5 pp33-34, Emerald (accessed April 1, 2008) Novosedlik, W 2005, “Brand new - Experiencing the promise it 's what consumers remember about their interaction with your brand that matters most”, Strategy, http://www.proquest.com/ (accessed April 5, 2008)