IKEA Furniture Production Company Executive Summary

IKEA Furniture Production Company Executive Summary

IKEA is one of the leading furniture manufacturers globally with a significant market share. The company has remained a market leader in the furniture industry for a very long time due to its strategic and sustainable engagement. IKEA is a privately owned company that has integrated quality organizational strategies to attract the global market. The corporation was formed in Sweden although it is currently based in the Netherlands with a worldwide presence in all types of furniture. The company operates at least 313 stores in more than 37 countries, and it is highly engaged in Asian, North America, Australia and Europe. The company has adopted a significant expansion strategy that has been mostly successful.

IKEA has developed a significant focus in the production of a wide range of products within the industry making it an all-inclusive, one-stop shop for both office and home furniture at a relatively affordable price, which has seen the company improve its global presence. The products that are offered by the company are unique of high quality that makes it stand out from other furniture companies in the world. IKEA is one of the few foreign companies that have had significant dominance in the United States furniture industry for a very long time. The company is engaged in the production of different types of products including indoor gardening products, outdoor furniture, babies, and children furniture. These different types of products are developed strategically to exhaust the furniture industry having utilized the existence of gaps in the market to create a unique global brand (Hahn, 2015).

The development of IKEA to global recognition is not by chance but a series of hard work and strategic leadership that has ensured that the company remains on course to achieve both its short-term and long-term goals. The company mission, vision, and goals have represented its general engagement and focus on the furniture industry that has spearheaded the company growth. The company has put in place a strategic vision that focuses on creating a better daily life for many people through support of what they envision in ideology and transform customer’s ideas into reality through the development of high-quality self-reflection products that define an individual. The affordability of the company products has made it possible for the company to ensure that many people can realize their dreams through the image of IKEA. The fundamental values that have streamlined the company operations include leadership, togetherness, and enthusiasm, striving to meet reality, daring and simplicity. These values form the foundational engagement of the company within the furniture industry (Ikea, 2013).

Justification of the choice business of interest

The furniture industry has become one of the most competitive industries globally with many designers creating innovative designs to capture the attention of diverse customer preference within the market. The changes that have been integrated into the industry are based on technological changes as well as the improving customer demands which are pushing manufacturers to seek new production strategies to meet the needs of customers. Ikea is one of the most successful companies in the industry and thus focusing on the company provides an integral focus where it would be possible to understand critical aspects and trends within the furniture production industry.

IKEA has primarily been successful through its strategic engagement and its high-quality focus on diverse markets and significant expansion strategy that has mostly been successful. The emerging markets have formed a key target market for IKEA, and it has developed procedures to ensure that it is successful. The company has experienced significant impediments in its focus to expand into new markets. Despite being a globally recognized brand in the furniture industry, it has faced challenges based on the cultural diversity, ethical concerns and legal issues regarding its operations in new markets. These underlying issues have limited the overall development of IKEA ad position itself effectively to achieve significant success from a global perspective. Therefore having an understanding of these concepts provide an integral focus on better understanding of the whole industry since these issues faced by companies within the furniture industry (Larson & Reichart, 2013).

IS components

Is components are essential components, which are crucial in shaping the underlying focus where it is possible to achieve a higher level of understanding of critical organizational structures. The five major components that are included in this case include Hardware, Software, Data, procedures, and people.

Hardware Software Data Procedures People
· Furniture1

· Home decor2

· Inventory database3

· Supply chain management software4

· …#

· Sales5

· Expenses6

· Production7

· Distribution8

· …#

· Chief operating officer9

· Chief financial officer10

· Operations manager11

· Inventory manager12

Item Type Description & Notes
1 Furniture 1Hardware The company is mainly engaged in the production of furniture to a wide range of customers.
2 Home Decor 2Hardware Home décor produced by the company include decoration material, lighting, cabinets among others
3Inventory database 3Software It is tasked with monitory inventory within the company to ensure sufficient production process
4 Supply chain management software 4 Software Tasked with the management of company supply chain process to improve company operations.
5Sales 5Data Highlights crucial information regarding the company performance across its stores
6Expenses 6Data Monitors the company costs


Collaboration happening now

The company has been significantly engaged in diversifying its operations into new markets through strategic collaborations. Recently the company has collaborated with Chris Stamps STAMPD in a bid to improve customer experience in today modern home. Fusing together the concepts of art and design provide a highly integrated setting where it is possible to achieve a higher level of customer satisfaction. Another collaboration that the company has successfully had is with OFF-WHITE which is also based on a greater focus on the need to integrate quality design in the company products in improving customer experience (Ikea, n.d).

Risks and challenges

The changing operational landscape has created a very compelling environment for IKEA to develop high-quality engagement within its diverse presence within the global environment. Each country has its own culture, and thus it has been a significant challenge for IKEA to ensure that they put into consideration the demands and preferences of all of its customers, which a considerable aim to create an improved environment where the company can have a higher, level of focus.

Increased competition is not always a positive move to any business, and thus every organization makes sure that they exhaust the market and leave a minimal space for their competitors. The inability of IKEA to find a way into the Indian market is likely to increase the chances for other companies who are willing to meet the existing legal constraints regarding the operation of foreign companies. The overall environment under which positive business engagement can be done is based on total compliance with the existing regulations (Löfgren, 2015).

Opportunities for improvement

The furniture industry is diverse and thus there exist significant opportunities which the company can consider to achieve a higher level of engagement within the market. The existing considerable transformation that has been organized is based on critical understanding of important elements, which shape the company development. Strategic partnerships are likely to provide the company with the much-needed space to expand.

Proposed Collaboration Tool

Collaboration with technology companies is a critical aspect that will likely help improve the chances of the company in the market despite significant challenges that have derailed the company development process. Collaboration with technology companies will mean that the company will enjoy unlimited traffic flow of customers within both its physical shops as well as improving its online engagement. The business environment is profoundly changing, and thus there is need to make strategic decisions.


Hahn, Y. (2015). Ikea And Corporate Social Responsibility: A Case Study. Science, Technology And Humanities For Business And Economic Sustainability, 2015 International Conference On Business And Economics (Icbe2015)10, 341–346.

Ikea. (2011). Ikea Group Approach To Sustainability. Environment, 23.

Ikea. (2013). Place Ikea Furniture In Your Home With Augmented RealityYoutube.

Koniorczyk, G. (2015). Customer Knowledge In (Co)Creation Of Product. A Case Study Of Ikea *. Journal Of Economics & Management22(2014), 107–120.

Larson, A., & Reichart, J. (2013). Ikea And The Natural Step. Darden Business Publishing33. Https://Doi.Org/10.1017/Cbo9781107415324.004

Löfgren, O. (2015). Design By Ikea. A Cultural History. Design And Culture7(3), 467–469. Https://Doi.Org/10.1080/17547075.2015.1105510

Page 2

Page 3

Comments are closed.