Ikea
Essay by 24 • March 19, 2011 • 518 Words (3 Pages) • 1,456 Views
Keeping prices low takes a concentrated effort at every stage of production and sales. We are persistent in finding ways to use the economies of scale, better production methods and smart design to keep costs low without affecting the quality of IKEA products. This way of working applies to:
* IKEA stores
* Distribution
* Purchasing
* Industry group
* Developing the product range
* Expert and supporting functions, including IKEA IT, IKEA Communications, IKEA Food Services, and more.
IKEA stores
IKEA stores sell the IKEA product range in room settings and self-service areas and inspire customers with ideas, hints and tips for smart new home furnishing solutions. To keep prices low, the stores buy and transport products in bulk. They're also located in less expensive areas of their market area. IKEA customers help to keep prices low by picking their furniture up at their store's warehouse, transporting it home and assembling it themselves.
Distribution
IKEA has 28 distribution centres in 16 countries. These centres supply goods to IKEA stores, and they ensure that the route from supplier to customer is as direct, cost-effective and environmentally friendly as possible. Efficient distribution plays a key role in the work of creating the low price.
Purchasing
IKEA has 46 trading service offices in 32 countries. Being close to our 1,300 suppliers means we can develop long-term relationships with them, observe production and work with manufacturers on the shop floor to make improvements and reduce costs. Sometimes a design decision at this stage or a slight change to the process can make a difference in price that, when multiplied by millions of items, results in drastic savings.
Industry group
The Swedwood Group is the IKEA industrial group, which produces wood-based furniture and wooden components. Swedwood has manufacturing units in 9 countries, mostly in Eastern and Central Europe. Operations cover every step of production, from forestry, sawmilling and board manufacture to furniture production.
Developing
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