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Ikea Analysis

1320 words - 6 pages

IKEA doesn’t have many direct competitors because of their unique Ikea experience and the fact they are 'category killers' in terms of industry based on price and quality. Their indirect competitors in house wares and furnishings however are big box stores like Walmart and Target. Both of these competitors have begun offering flat packed furniture, like IKEA, however the sections are confined to small spaces in these large stores.

Crate and Barrel on the other hand, which is actually a part of Euro Market designs Inc. Is one of the closer competitors to IKEA in terms of variance of products offered as well as marketing strategy and management style. Crate and barrel has tried ...view middle of the document...

IKEA works actively to reduce waste in manufacturing. Where possible, waste from one manufacturing process is used in the production of other items. IKEA recycles large quantities of material to deflate raw materials costs. Most IKEA stores provide collection points for customers to return waste, such as electrical and electronic equipment, discarded packaging, spent batteries and low-energy bulbs, for recycling. IKEA then attempts to repair products rather than simply discarding them. These products are used as spare parts or sold at reduced prices in specially designated areas of the stores. Finally, IKEA applies precautionary principles with regards to the use of chemicals and other potentially hazardous substances in their products. For example, in instances where local laws are strengthened regarding the use of chemicals, IKEA strives to adopt the new requirements in other countries where they do business as well.

The IWAY code

The IWAY was first introduced in the year 2000.
IKEA's code of conduct, The IKEA Way on Purchasing Home Furnishing Products or IWAY, defines what suppliers can expect from IKEA and specifies what IKEA requires from its suppliers. The IKEA Way on Purchasing Home Furnishing Products, (IWAY) is based on international conventions and declarations. It includes provisions based on the United Nations Universal Declaration of Human Rights, the International Labour Organization Declaration on Fundamental Principles and Rights at Work, and the Rio Declaration on Environment and Development. It covers working conditions, the prevention of child labor, the environment, responsible forestry management and more. Suppliers are responsible for communicating the content of the IKEA code of conduct to co-workers and sub-contractors and ensuring that all required measures are implemented at their own operations.

In short he IWAY was developed to ensure that all IKEA products were produced responsibly and so that as consumers, we feel no guilt when buying an IKEA product.

The IKEA Experience

IKEA stores are typically large blue buildings with yellow accent, to hint at their Swedish roots. They are typically designed around a "one-way" layout which leads customers along "the long natural route." This layout is designed to encourage the customer to see the store in its entirety (as opposed to a traditional retail store, which allows a consumer to go right to the section where the goods and services needed are displayed) although there are often shortcuts to other parts of the showroom. The sequence first involves going through furniture showrooms making note of selected items. Then the customer collects a shopping cart and proceeds to an open-shelf warehouse for smaller items.Then the customer visits the furniture warehouse where they collect previously noted showroom products in flat pack form. Finally they take their products to the cashier's station to make payment.
The IKEA stores are designed to show all customers...

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