IKEA's Strategy Essay Example | Topics and Well Written Essays - 3000 words

IKEA's Strategy - Essay Example It is IKEA’s vision to give a as many individuals as possible a better life. The company wishes to achieve this via the business concept they have which offers furniture that has very low prices many can afford them. They go beyond just selling tables and chairs by offering a better living environment and comfortable home. IKEA is cognizant of the importance of home environment to many. It can easily affect their well-being. Thus, it is necessary that their homes are comfortable, attractive and practical without having to pay a fortune to gain it. At present, there are more than 260 IKEA branches in over 35 nations and territories around the world as of 2007. There are more than 400 million individuals visited the stores annually. The products are also now made available online or via catalogues. The company sold more than 17 billion Euros in 2006 alone. IKEA also makes sure that the company adopts responsible attitude towards social and environmental issues. Evidently, IKEA i s greatly successful it its business in Europe and the world over (IKEA Website). This paper will be focusing on IKEA and the strategies it implements that make it the success that it is now. This study will first present its value proposition. It will also explore IKEA’s entry into the foreign markets as well as the factors that surround such move. Then, the paper will be delving into the strategy that IKEA makes use of which is mainly responsible for the success it is enjoying at present. Then, a closer look into its HR and what strategy is implemented will be discussed. Finally, concluding remarks will be given based on the information gathered about IKEA as incorporated in this study. II. IKEA’s Value Proposition A number of companies have lined up their values inside and out and a brilliant example of such companies is IKEA. IKEA is the biggest and one of the most popular manufacturers of furniture worldwide. It has 179 outlets in operation in 23 countries and emp loys 84,000 workers. The value proposition of IKEA that attracts buyers—its capability of offering affordable, distinctively designed functional furniture—is communicated and executed consistently. To minimize the costs for manufacturing, buyers assemble the accessories and furniture themselves. They also usually collect these from the warehouse and take them home themselves. Delivering the items is a separate service that is promoted as being priced reasonably. This self-service environment assists IKEA in keeping the prices to a minimum, which is vital to the values of buyers. The value proposition is the service and/or product that creates utility that is offered to buyers by a company, according to Bovet and Martha (2000). Another definition is that it all the central aspects of the situation and the advantages sought by the customers in the purchase (Best, 1997). The value proposition refers to the bundle of value that delivered by a company to its customers (Shee hy, Bracey, & Frazier, 1996). It includes intangibles (e.g. brand equity, image), selection, service, and price; it is more than just the product itself. In other words, it is not what the buyer is buying, but what the buyer thinks he or she is buying. Both the offer to the organization and the duties and roles of stakeholders are identified by the value proposition (Webster, 1994). It becomes the selling proposition to