Essay: Core competencies of IKEA

Sample Essay

Essay: The company was founded in the year 1943 and initially they only sold pens, wallets, picture frames, watches and jewellery. In the year 1947 they started collecting furniture from a local manufacture and by the year 1951 IKEA launched their first furniture catalogue. Soon after that the group established its first warehouse in the year 1953 and after five years of it their first store was opened in Sweden which at that point of time was the largest furniture display centre in Sweden (Hay, 2006).

Soon after their launch IKEA received tremendous amount of success in their business which is very much evident from the fact that very soon they decided to move out from Scandinavia and to penetrate into the Europe and worldwide market. The rate with which they were expanding their business was magnanimous with a rate of one store per year opening from 1974 to 1989.

After establishing their business in most part of Europe the IKEA’s next target was to enter the market in other places of the world, and this is exactly what they did. In the year 1990 this tremendous growth of IKEA continued with full fleshed momentum and they opened their stores in Middle East, China, Russia and throughout Europe (Hay, 2006).

Among some of the other achievements that the group came through this period was the establishment of their own rail operations which was known as IKEA Rail AB in the year 2001. Moving forward IKEA launched its own food label which added to their profile as a unique selling proposition (USP).

The company was in a very aggressive mood when in 2008 they opened 15 stores in 11 countries of the world. This adventurism was definitely backed up by their continuous growth and progress in their industry (Hay, 2006).

Value chain:

Throughout these years of operations one feature on which IKEA never compromised was the quality of their products. On several occasion they recalled their products because of sub standard quality like for instance they recalled the iris Alvin tents due to lack of an application.  Similarly some of the drawers were also called off reason being there was an injury threat when the glass knobs were being installed.  Also in baby sleeping bags, spotlights and clamps were also brought back due to safety grounds (Reynoso, 2009).

All the IKEA stores have restaurants for their customers; the restaurants offer local dishes as per the locality f the store. Apart from that most of the sores also have Swedish food market which has Swedish cuisines like for instance meatballs, pickled herrings, crispbread, and lingberry jam. These food chains have 160 food items among which 40 of them are the most popular brands. As catering the need of the whole family the IKEA stores also have a play area which is named Smaland for children aged 3 to 10 years (Datamonitor, 2010).

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