Based in Sweden, IKEA is a group of multinational companies that provides kitchenware, furniture and other home accessories. With more than 400 stores spread all over the world, IKEA is one among the leading companies selling furniture. Ingvar Kamprad, a seventeen-year-old started the IKEA in 1943 which emerged as the biggest multinational company with time. But why is it so successful? What’s so special about IKEA? In this guide, we’ve shared the secret behind IKEA’s success in the market. Read on to know.
Price is the most important factor which determines the revenues, which is responsible for the profits enjoyed by an organization. IKEA has always kept in mind the customers’ comfort. They try to keep the price low so that people can make the most out of it. Their aim is to keep the cost low which meets the company’s requirements too. Another reason why their products are cheap is that they try to reach the maximum number of people.
- Supply chain and marketing channels
IKEA plays not only the role of a retailer, but also the role of seller, manufacturer, and wholesaler. Though IKEA’s furniture and products are developed in Sweden, mostly they are manufactured in numerous developing countries, so as to keep the costs low. Their distribution system aims at supplying the products to the customers within a short span of time. This system enables the company to have efficiency in management. Over the first fifty years, IKEA has successfully established about 200 stores. Recently, the figure has increased to 316.
Unlike other companies, IKEA displays its products using showrooms which is completely a new style to advertise their products. The IKEA allows you to spend the entire day in the showroom. People who make multiple purchases are rewarded with a card programme for their loyalty called the “IKEA Family.” This helps in building long-term relationships between the company and its customers. A well-designed catalogue is the main way of advertising and promoting the product. Each and every product of home furnishings and furniture are displayed here.
The company offers an extensive range of products with a variety of more than 1,200 items. For manufacturing, IKEA takes advantage of all the cheap sources available worldwide. Hundreds and thousands of low-cost manufacturers provide IKEA with a regular supply of resources required for manufacturing. When manufacturing is done at low cost, the price of the product automatically reduces.
- Social Responsibility and Ethics
Over the last few years, IKEA could be seen paying attention to several charitable causes on the international platform, especially with the UNICEF. These efforts by IKEA helps it to communicate with the stockholders, customers, government officials and within its own community.
No wonder why there’s no other company that can beat IKEA’s position in the market. Their distribution, production, marketing functions, and furniture designs are unique, which had never been done by any other company. IKEA keeps their customers engaged, launch new policies to attract them and also retain them in huge numbers.