IKEA is a privately owned business. It is an international home products retailer. IKEA sells things that are needed for household purpose. For example, accessories, bathroom, furniture, and kitchen items in their retail stores. IKEA has retail stores all over the world. IKEA sell their design furniture and goods at an affordable price. Currently IKEA is the world’s largest furniture retailer.
More about the history, IKEA was founded in 1943. It was founded by 17‐year‐old Ingvar Kamprad in Sweden and it is owned by a Dutch registered foundation. It was controlled by the Kamprad family. IKEA started its first retail business in Sweden. As of August 2009, IKEA has 301 stores in 37 countries, most of them in Asia, North America, Europe, and Australia.
Comparing to Other stores, IKEA provides a cheaper price for most of this product. For instance, a bedroom furnished with products from other store is much more expensive than a bedroom furnished with Equivalent of IKEA products. Thus, IKEA is the cost leader in the furniture industry. IKEA target their market to the college students, young married couples, singles and middle class families who basically prefer cheaper price. This concept gives IKEA its biggest competitive advantage keeping it ahead of its competitors. A key feature of IKEA furniture is that they can be self-assembly. The furniture pieces are in small pieces and flatly packed then IKEA customer can assemble the furniture at their homes. Since the furniture is able to be assembled at home, customers are willing to take on the task of assembly in return for lower prices. Due to this, it also reduces IKEA transport and warehouse costs as well.
Generally people have a mindset that the price relates to the quality of goods, as in the higher the price the quality is better and lower the price the lower the quality. However, IKEA has successfully changed this idea related to that. It has productively combined low cost with good quality. In this price wise it gives IKEA the competitive edge.
These are IKEA’s Statement:
Ikea Organization structure
1st Major Process
IKEA allow customers to have choices of payment. The payment is accepted in terms of cash payment, credit or debit card payment or by the IKEA family Card point’s payment. Once IKEA customer has place his or her items in the counter for payment this activity flow diagram starts •This activity flow diagram starts when the customer has place the item on the counter
•Once the Cashier has scan items.
•The customer chooses the choice of payment.
•The cashier would collect the cash from the customer
•If customer has given the exact amountthe activity flow will end.
•If customer did not give the exact amount the cashier would return the change the activity flow will end.
•The customer has the choice of card to choose.
•If the customer has chosen to use debit cardthe cashier would prompt the user to swipe the card and the customer would enter the pin to verify itonce it has been verifiedthe activity flow will end. •If the customer has chosen to use credit cardthe cashier would prompt the user to swipe the card andonce the amount has been verified customer would sign the receiptthe activity flow will end. If the customer has entered the wrong, the customer will to re-enter the pin then the activity flow will continue. •If the customer has chosen to use the IKEA family cardThe cashier would check for availability pointsIf there is sufficient points the cashier would prompt the Customer to use the pointsonce the customer has confirm that he or she would use the point to paythe activity flow will end. If there is insufficient points in the card the customer will have to reselect the choice of payment.
2nd Major Process
Delivery and assembly process
IKEA provides delivery service and Assembly services. Once customer has purchase their goods, they would go to the delivery counter that provides delivery service. On Weekend their delivery charge for goods below $400 is $55, and for goods between $400 and $600 are $60 and goods anything above that the delivery charge is $65. If a customer wants a delivery to be made on weekend the delivery charge is $15 more than the weekday’s delivery charge. While providing customer delivery IKEA also provides assembly service to IKEA customers too. This activity flow diagram starts when the customer has made his or her payment and wants IKEA to deliver the goods to their house. * The customer would request for a delivery would visit the delivery counter * The delivery counter would receive the order form from the customer * The customer would then fill the particular
* Customer would select their delivery * Customer would then confirm if they need assembly service or not * Delivery counter would then prepare the order and receive the payment from the customer * They would then inform the warehouse
* Warehouse would check for availability of stock if stock is not sufficient warehouse would purchase the goods * The warehouse would pick the regarding goods * The delivery department would deliver it to the customer