Supply owned by a foundation in the Netherlands.

Supply Chain Management

1. Background

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IKEA is an international furniture chain with Swedish origin
and style. Founded in 1943 by Ingvar Kamprad from the farm Elmtaryd, at a
village of Agunnaryd south of Sweden, therefore the name IKEA, Ingvar Kamprad
Elmataryd Agunnaryd. The various companies in the IKEA group are owned by a
foundation in the Netherlands. IKEA’s business concept has always been the
same. It has just evolved. The main vision for IKEA is based on to offer a wide
range of shape and function-oriented home decorative items at such low prices
that as many as possible can afford to buy them. Despite the low price picture,
the consumer must have a lasting enjoyment of their purchases, because the
function and the technical quality must be good with a low price but with a
meaning.  

In the late 50’s, The Swedish furniture industry started boycott IKEA and the
suppliers were threatened that if they sold goods to IKEA they could not sell
to any other furniture companies. The suppliers could not afford to refrain
from the other furniture items and were therefore forced to stop selling to
IKEA. Ingvar Kamprad had no choice but to move production abroad. He then chose
to move it to Poland. The reasons for this were mainly two things. First of
all, it was close to Sweden and besides that they spoke German. Ingvar Kamprad
has roots in Germany. The step of moving production abroad has had a big impact
on IKEA being as big as they are today.

Since 1947, IKEA has grown from a mail order company, with
five employees, to the world’s largest furniture store chain. The IKEA Empire
extends from Norway to China, from Australia to the United States. And also new
department stores are now also established in the Eastern Europe.

Most of the stores of IKEA are owned by a holding company
called INGKA holding that is in controlled by the big Stitching INGKA foundation;
they are one of the 40 wealthiest charitable foundations in the world founded
by Ingvar Kamprad.
IKEA is also a franchise and trademark known for its minimalistic design and
different types of home decorative items and furniture’s, the company is also
recognized for its sustainability and eco friendly thinking.
The company but a lot of attention on controlling costs, endless of product
developments, details of operational and corporate aspects. Those aspects
helped IKEA to lower its price by an average of two to three percent over the year
of 2010, which also was a period of global expansion.

As of November 2017, IKEA is everywhere in the world on all
continents except Africa and South America. In total the company owns and
operates 411 physical stores in 49 different countries. In the year of 2016,
36.4 billion worth of goods were sold, which in total was 7.6 percent in
increase over the year 2015. And the website of IKEA entertained around 12.000
products and it is the closest account of the entire IKEA range. The company’s
website had over 2.1 billion visitors during the year of September 2015 to
August 2016. Therefor the company is responsible for almost 1 percent of the
world commercial-product wood consumption, which makes them the biggest user of
wood in the retail sector.
IKEA also have its own industry division called IKEA industry, they have around
44 factories in 11 countries. The head office is located in the south of Sweden.
The company have about 19 000 employees. IKEA industry’s main task is to focus
on areas where IKEA has had difficulty finding external suppliers at a good
price and with guaranteed deliveries.