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Phua Chew

on 30 November 2011

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Transcript of IKEA

IKEA Paint the world with Yellow and Blue Company Background IKEA (Ingvar Kamprad Elmtaryd Agunnaryd)
Founder Ingvar Kamprad
Year 1943 at Smaland Sweden
World’s largest Furniture Retailer (The Economist, 2010)
November 2011, 325 stores in 39 countries
267 stores in 25 countries owned by IKEA group
The other 58 stores are owned and run by franchisees
Table of contents Background of IKEA

Corporate Social Responsibility

Marketing Mix

External Analysis
-Porter Five Forces
-Core Competencies

Internal Analysis
-Value Chain Analysis
-Hierarchical Levels of Strategy
-Ansoff Matrix
-SWOT Analysis

-TOWS Matrix


Facts and Figures In Nov 2011
-208 million copies of IKEA Catalogues had printed
-734 million of visits
-More than 127,000 Co-workers
-More than 1,220 suppliers in 55 countries
Ingvar Kamprad Born on March 30, 1962

Begin his career at the age of six - selling matches

Ten years old, he start selling Christmas decoration, fish and pencils by crisscrossed the neighborhood on his bicycle

1943 when he’s just 17, father rewarded him with a small sum of money because he doing well in school

Instead on spending it on entertainment, he use it to create his company- IKEA

Though already pass 80, he still travels the world to visit new IKEA stores

He flies economy class , stays in cheap Hotels and even replaces bottles from the hotel room mini-bar with cheap bottles bought in local supermarkets

He calls his employees “Co-Workers” and Encourages everyone to dress informally

He drives an old Volvo and he gives no interviews

Participate d Nazi at the age of 16-25 Timelines 1920s: Ingvar Kamprad – sell matches
1940s – 50s: Name “IKEA” was formed, advertisement, furniture, catalogue and showroom introduced
1960s – 70s: Expansion of stores internationally and new products
1980s: Formation of IKEA group and customer club
1990s: Website launches and environmental policy developed
2000s: Code of conduct for supplier, launched its own food products and collaborations with WWF and UNICEF – responsibility towards the environment and community
Vision and Business Idea Vision- To Create a better everyday life for the many people
Business Idea-To offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them
IKEA Structure Financial Highlight IKEA's CSR IKEA Sustainable Report

Appoints its first environmental manager in 1989 and develop first IKEA environmental policy the following year

“World’s most Ethical Companies” for 2010 by Ethicsphere Institute

Sustainable products (Renewable material, recycled material, energy efficiency production etc)

Help reduce customer overall climate impact

More Transparent career opportunities support diversity

Better health and safety standards, working condition (provide training)

New principles and guidelines for compensation and benefits Supplier

Close and long term relationships

Prevent Child Labour


”Supplier development programmes”

-IKEA Foundation projects reach out to 100 million children
-Long term programme on three areas: A healthy start in life, education and protection and women’s empowerment (India)
-Cotton project villages in Pakistan
-Support Pakistan flood victims and Haiti Earthquake victims
-Supporting Sow a seed in Borneo
-Soft toys donation from customer

-Certified wood volumes
-IKEA Forestry requirements for board material
-Work with WWF in increase certification in China
-Cotton, Water, waste management, Climate and renewable energy.
-Solar power
-Turning food waste into fuel
IKEA Sustainability Direction to year 2015

-Offering a range of products that are more sustainable
-Taking a leading role towards a low carbon society
-Turning waste into resources
-Reducing IKEA water footprint
-Taking Social Responsibility
Marketing Mix Products
-Approximately 9,500 products
-Can be divided into 21 type of products
-Children IKEA
-Bathroom Storage
-Beds and Mattresses
-Clothes Storage
-IKEA Family Products
-Kitchen Cabinets and Appliances
-Small Storage
-Sofas and Armchairs
-Storage Furniture
-Textiles and Rugs
-Tools and Hardware
-TV Stands and Media Solution
-Low Price strategy
-Waste Reduction
-Economies of Scale
-DIY assemble
-Flat design save cost
-Large space for showroom
-Location Selection
-Warehouse Store
-The process Promotion
-Pass year
-IKEA Gift Card
-Award winning advertising
-Creative publicity campaign
IKEA Value Chain IKEA Hierarchical Levels of Strategy Corporate Level
-Growth Strategy
-Franchising the business
-BCG Matrix
Business Level Strategy
-Low cost but offer products with a high perceived value than others low cost competitors
Functional Level strategy
-Marketing Strategy
-Creative advertising campaign
-Sales and promotion
-IKEA gift card
-R & D Strategy
-Innovation in product design with low cost
-HRM Strategy
-Creating fun working environment
-Wear casual and transparent in promotion
IKEA Porter Five Forces IKEA PEST IKEA Core Competencies IKEA Ansoff Matrix IKEA SWOT IKEA Recommendation Personal Reflection
IKEA constantly improves its product features to create a better everyday life for their customers

Effort and time taken to ensure that the products marketed are of good quality and safe to use

Overall, successful in managing its strategies to sustain the growth of its business

Certain areas can be further improved to enhance the sustainability of the business
Conclusion IKEA has successfully established itself as a world wide recognised brand associated with high quality, modern design, lifestyle and innovation. IKEA has applied different strategies to maintain its competitive advantage and it has successfully become a leading example of developing a sustainable business.
Kow Li Wei
Phua Tin Chew
David Huan McGregor’s X And Y Theory
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