Strength’s IKEA’s low cost concept keeps it ahead of its competitors IKEA recycles more than 85% of the packaging and other waste from its stores IKEA’s research and development team finds ways to alter designs to save on manufacturing costs IKEA has the ability to adapt its tactics according to the market IKEA uses cheap labor which keeps its costs down and gives them a competitive advantage A key feature of IKEA furniture is self-assembly IKEA has positioned its business like no other and they are in a very privileged position in the market Weaknesses IKEA is not at all customer focused It lacks thorough market research on customers’ preference before entering into a new market IKEA has a tendency rushing in and should slow down and due proper market research One problem experienced by IKEA is that its flagship stores are not located in city centers So large and global that replicable and scalable control of quality is a weakness There are environmental concerns about IKEA’s operations; company faces challenges
Page 3: Values
Having a vision and mission statement are important, but a business also needs a set of values. Values are the beliefs and guiding principles that influence the activities of the business and how it operates. IKEA’s values guide all its activities and are based on the belief that every individual has something valuable to offer. These values help to set the culture within the company. Culture is the assumptions, beliefs, behaviours and routines that are the characteristics of the company.
For IKEA, its culture is based on a ‘spirit of togetherness, enthusiasm and fun’ IKEA’s culture is based on a strong set of values that steer and support its vision, the following are examples of its values:
One of the ways IKEA finds out about the needs of its customers is by undertaking home visits. Every year thousands of homes are visited so that IKEA can gain feedback and ideas on what sort of products its customers are looking for, these ideas are then used as the starting point of the design process. For Marcus Engman, Design Manager ‘Meeting people in their homes is the best way for us to learn more about their needs, dreams and living situations. And that helps us create even better living solutions. Home visits aren’t only important for developing IKEA products, they also help us create solutions that are relevant on a local level.’
Togetherness and enthusiasm – IKEA believes that by working together, its co-workers have the power to solve seemingly unsolvable problems. For example, from the early stages of the design phase, IKEA product developers and designerswork with a diverse team of technicians, manufacturers and specialists. This special partnership helps to keep product prices low and to find the latest techniques to create products the ‘IKEA way’.
Cost-consciousness – this value is about maintaining products at low prices through keeping costs low.
Togetherness – this value emphasises the importance of IKEA co-workers having mutual respect for each other, customers and suppliers. IKEA works side by side with individual suppliers directly at their factories. This enables the company to use the most efficient, cost-effective and creative ways to bring their designs to life. “It’s this special spirit of togetherness that allows us to make advances in smart product design, packaging and distribution.”
Accept and delegate responsibility – IKEA promotes its coworkers with potential and the culture helps to stimulate them to exceed their expectations. As Petra Hesser HR Manager says “You can always be yourself, everyone has a voice and it’s a company that encourages open dialogue. IKEA wants co-workers that can help build on that culture - straightforward and down-to-earth people with a willingness to learn.”
Leadership by example – for IKEA this means that its managers act according to the IKEA values and create an atmosphere of well-being and also expect the same from their co-workers.
IKEA’s values guide it in everything it does and allows the company to maintain the highest ethical standards and to be a good partner in society.