3. How does the strategy of increasing its online presence impact on these trade-offs? For decades, IKEA

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3. How does the strategy of increasing its online presence impact on these trade-offs? For decades, IKEA has been one of the most successful retail operations in the world, with much of its success founded on how it organises its design, supply and retail service operations. With over 400 giant stores in 49 countries, IKEA has managed to develop its own standardised way of selling furniture. Its so-called ‘big box’ formula has driven IKEA to the global number one position in furniture retailing. ‘Big box’ because the traditional IKEA store is a vast blue-and-yellow maze of a showroom (on average around 25,000 square metres) where customers often spend around two hours – far longer than in rival furniture retailers. This is because of the way it organises its store operations. IKEA’s philosophy goes back to the original business, started in the 1950s in Sweden by the late Ingvar Kamprad. He was selling furniture through a catalogue operation, and because customers wanted to see some of his furniture, he built a showroom on the outskirts of Stockholm and set the furniture out as it would be in a domestic setting. Also, instead of moving the furniture from the warehouse to the showroom area, he asked customers to pick the furniture up themselves from the warehouse. This approach became fundamental to IKEA’s ethos – what has been called the ‘we do our part you do yours’ approach.

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