Ikea is a business which manufactures and retails furniture at low cost and affordable prices, they also provide a variety of other services which include a restaurant, they also provide a price guarantee service which means that they want their customers to be getting good value for their money, they also provide a children’s service as well as an interior designs service, they have also got a Sweden shop which sells Swedish goods, these are just some of the services that Ikea provide for their customers.
Ikea are part of both secondary and the tertiary sectors as they manufacture the goods and they provide a service of selling their goods. I feel that Ikea are expanding their business as they are part of both the secondary and tertiary sectors and these two sectors are the main areas in which people decide to work. I think that Ikea is also expanding because of the fact that they have got so many stores in the world and they are reinvesting their profits back into the stores and this money they are reinvesting is helping to fund for new Ikea stores.
Ikea are also expanding their business because of the fact that they have got more
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Ikea started off as a sole trading business which was owned by Ingvar Kamprad, the business was officially registered in 1943 by Kamprad. When he set off at first his business was very small and unknown by the public, but over a space of 40 years Ikea became rather popular and was expanding, this led to Kamprad thinking about the long term future and the success that the business would bring. Something which was concerning him was the fact that his three sons would argue over who was going to take over the business when he retired. Ingvar Kamprad did not like the idea of his business splitting up. When he retired he opted to set up a charitable organisation which would take over the business and so that it would be run independently and securely.
However Ingvar Kamprad also decided to sell to a charitable organisation because of the advantages that charities have got, as they have fewer taxes to pay to government and also because he knew that there would not be any shareholders to distribute the dividends to the shareholders. Each time the Ikea logo is used Ingvar Kamprad still gets a fraction of the profits, so Kamprad is still benefiting from the business even tough he is no longer the owner of the business. Here is a chart to show how Ikea is operated at present. From this chart we can se that all the different sectors of business are now owned by the Stichting Ingka foundation, who have full control over the activities of Ikea, except for the fact that they have to pay a fraction of their profits for each time that they use Ingvar Kamprad’s Ikea logo.
Ikea aim to create a better everyday life for people to get there, their objective to do so is to make sure that they have got a product which is long lasting easy to assemble and reliable so that their customer is always satisfied. They also aim to make good use of recycled materials for example they recycle left over furniture or furniture which does not sell, their objective to do this is to use the recycled materials to make newer products. Ikea also aims to keep the prices of their furniture and other appliances low-cost, the objective that they follow to do this is that they keep an eye on the prices their competitors offer and they lower the price even further.
There’s over a 150 Ikea stores worldwide, 12 of which are spread out across the UK. The Ikea store that we are focusing on is located in Wednesbury it was opened in 1990; this is a very good location for the store as they are located near a motorway so this brings in more customers as cars are travelling in from all directions. It is also very good to be located by a motorway as it provides better transport links.
It is good for Ikea because they have got competitors nearby; it is good for Ikea to have competitors nearby because if people are going to visit other competitive shops just opposite, this will provide more business coming Ikeas way as more people will stop off at other shops and decide to pop into Ikea to have a browse and as Ikea provides such great prices customers will be tempted to buy from them instead of their oppositions. It is also very good because Ikea has its very own restaurant this is also good because if people fancy a bite to eat they can stop off at Ikea and eat there. A motorway locates them, as it’s closer to their customers, a motorway also situates Ikea and it’s open in the Midlands because it’s easier for them to find highly qualified staff, as Birmingham is a densely populated area.