IKEA Research on External Stake Holders

A brief history of IKEA and its operations

IKEA is a well known Swedish brand, which deals in the world wide retailing of products that are related to furnishing the house and commercial avenues. Primarily, corporation is based on giving wide range of innovative, convenient as well as cost effective home décor solutions .The unique value proposition, provided by IKEA, is mainly because of its ready of assemble attribute. The brand offers a diverse range of product lines, mainly of home products that are highly functional and tends to be cost effective at the same time. Designing the innovative furnishing products and selling it on premium prices is the basic them of almost every brand that exist in today's market. However IKEA, since its initiation has aimed to be a brand, which provides the best of the designs and convenience on the lowest possible prices. The company has always pondered upon proposing the products that are affordable for almost every consumer segment and this work as a corporate them for IKEA, around the globe. IKEA, being a low cost provider in the global market makes it different from most of its immediate competitors, whether they are the retailers or the manufacturers (Applbaum, 2004).

IKEA, according to the statistic, in 2007, had almost 300 retail outlets around the globe, in 35 countries. All these stores were fully operational having all the products for home décor. IKEA's inexpensive, smartly designed products, exhibited in huge depot stores, made sales of €21.2 billion only in the year 2008 compared to €4.4 billion in the year 1994. Although IKEA has refused to issue statistics of its profitability, the net profit margins of IKEA were believed to be around 10% higher than an average retailer. Ingvar Kamprad, the founder of IKEA, is believed to be one of the richest men in the world. IKEA's success has accredited to luck, good showmanship and timing, obsession, strategic rigor, efficiency, good corporate, business and global strategy and the capability to turn around barriers into competitive edge (Applbaum, 2004).

The Quantitative figures of IKEA, around the globe

Table 1: IKEA by the Numbers in 2008

IKEA Stores

285 in 35 countries

IKEA Sales

€21.2 billion

IKEA Suppliers

1,380 in 58 countries

The IKEA Range

9,500 products

IKEA Co-workers

127,800 in 39 countries

Why the study have to be conducted?

The IKEA vision is to “To create a better everyday life for the many people.” However, this vision of IKEA was challenge, soon after it faced the environmental concerns, which first took place in last decade of 20th century. The issue of environmental concern got worse and further complicated, as the procurement of IKEA involved numerous complex relationships with their suppliers. This complication was an obvious phenomenon as the supplier base of IKEA consisted of around 2300 suppliers in around 70 countries around the globe (Dunn, 2008).

The initial issue arose, when the government of Denmark passed a legislation of limiting the use of formalhyde in the manufacturing process of all the products that were associated ...