A PROJECT REPORT ON IKEA

SUBMITTED TO: SUBMITTED BY:

MS DEBAPRIYA MANSI DIDWANIA
MBA-IB
(SAP)
INTRODUCTION:
IKEA is an internationally known home furnishing retailer. It has grown rapidly since it was founded in
1943. Today it is the world's largest furniture retailer, recognized for its Scandinavian style. The
majority of IKEA's furniture is flat-pack, ready to be assembled by the consumer. This allows a
reduction in costs and packaging. IKEA carries a range of 9,500 products, including home furniture
and accessories. This wide range is available in all IKEA stores and customers can order much of the
range online through IKEA's website. There are 18 stores in the UK to date, the first of which opened
in Warrington in 1987. In July 2009 IKEA opened a store in Dublin too - its first in Ireland.

As of September 2016, IKEA owns and operates 389 stores in 48 countries. In fiscal year 2010, US $
23.1 billion worth of goods were sold, a total that represented a 7.7 percent increase over 2009. The
IKEA website contains about 12,000 products and is the closest representation of the entire IKEA
range. There were over 470 million visitors to IKEA's websites in the year from September 2007 to
September 2008. The company is responsible for approximately 1% of world commercial-product
wood consumption, making it one of the largest users of wood in the retail sector.
PRODUCTS AND SERVICES

FURNITURE:

Rather than being sold pre-assembled, much of IKEA's furniture is designed to be self assembled.
The company claims that this helps reduce costs and use of packaging by not shipping air; the
volume of a bookcase, for example, is considerably less if it is shipped unassembled rather than
assembled. This is also practical for many of the chain's European customers, where public transport
is commonly used, because the flat-pack methods allow for easier transport via public transportation.

IKEA contends that it has been a pioneering force in sustainable approaches to mass consumer
culture..

HOUSES AND FLATS:

IKEA has also expanded its product base to include flat-pack houses and apartments, in an effort to
cut prices involved in a first-time buyer's home. (This practice is not new; the defunct Canadian
retailer Eaton's sold houses in a similar fashion), The IKEA product, named BoKlok was launched in
Sweden in 1996 in a joint venture with Skanska. Now working in the Nordic countries and in the UK,
sites confirmed in England include London and other places.

SOLAR PV SYSTEMS:
At the end of September 2013, the company announced that solar panel packages, so-called
"residential kits", for houses will be sold at 17 UK stores by mid-2014. The decision followed a
successful pilot project at the Lakeside IKEA store, whereby one photovoltaic system was sold almost
every day. The solar CIGS panels are manufactured by a German-based subsidiary of the Chinese
company.

RETAIL SHOPPING CENTRES:

IKEA owns and operates the mega family shopping center chain in Russia

GLOBAL STRATEGIES OF IKEA:

PRODUCT STRATEGY:
It used the steady reduction of product prices as a strategic tool for growth sustenance. This approach
became a style, an art that made IKEAs growth enviable. The company seeks full knowledge of
production costs before taking up any new project. Low product prices and high product quality
became possible because of low production costs.
STORE LAYOUT STRATEGY:

The home furnishing chains mazy layouts are a psychological weapon to part shoppers from their
cash, an expert in store design claims. The theory is that while following a zig-zag trail between
displays of minimalist Swedish furniture, a disorientated Ikea customer feels compelled to pick up a
few extra impulse purchases.
 PACKAGING STRATEGY:
Ikea has flat packaging strategy. It reduces costs of packaging. Most IKEA furniture is designed and
sold in pieces for the customer to assemble. The pieces are placed into convenient and efficient, flat
packages for low-cost transport because they take up less room in trucks, maximizing the number of
products that can be shipped.
The unique packaging also take up less space in warehouse bins and reserve racks, allowing for
more room to stock additional items for order fulfilment. What the company saves in fuel and stocking
costs is passed on to customers.

PRICING STRATEGY

IKEA prices their product with price ending in 99 only in Sweden .

IKEA often considers a price change, but how they make consumers believe that new price is a
good deal. Then, when IKEA sets the new prices, they put the previous prices as well.
 IKEA put their products on sale occasionally
IKEAs psychological pricing strategy is related to consumer behavior deeply.

PROMOTION STRATEGY

IKEA relies on print and media advertising as one of its main marketing strategies to deliver its
marketing message to the target customer segment. The company collarbones with a range of
popular journals and magazines and TV channels globally for this purpose.
 The company has effectively integrated the elements of creativity in its print and media
advertising a number of times. For example, billboard-fitted wardrobes were placed by IKEA in
selected outdoor locations in Vienna. People passing by were encouraged to slide its door
open to assess IKEAs solutions to fit many items into the wardrobe.

SUPPLY CHAIN STRATEGY

MERCHANDISING STRATEGY

IKEA features a merchandising strategy of providing products in the furniture, and home furnishings
segment, offering customers complete home and extended solutions. Merchandise that IKEA offers,
extends to complete room, bedroom, textiles, kitchen related, even storage, and simple home ideas
like clocks, photo frames and scented candle sets. Customers can visit IKEA and have all their home
furniture problems solved, from a shopping trip to a single store.

CONCLUSION

IKEA is a well-known global brand with hundreds of stores across the world. In order to improve
performance, it must assess its external and competitive environment. This will reveal the key
opportunities it can take advantage of and the threats it must deal with. IKEA responds to both
internal and external issues in a proactive and dynamic manner by using its strengths and reducing its
weaknesses. Through this, IKEA can generate the strong growth it needs to retain a strong identity in
the market.

IKEA's passion combines design, low prices, economical use of resources, and responsibility for
people and the environment. The company's products, processes and systems all demonstrate its
environmental stance. For example, clever use of packaging and design means more items can fit
into a crate, which means fewer delivery journeys. This in turn reduces IKEA's carbon footprint.

IKEA believes that there is no compromise between doing good business and being a good business.
It aims to go beyond profitability and reputation. IKEA is intent on becoming a leading example in
developing a sustainable business. This will create a better everyday life for its customers. IKEA has
discovered a business truth being sustainable and responsible is not just good for customers and the
planet, it is also good for business.