COMMERCIAL DISTRIBUTION

UNIVERSITY CORPORATION OF ASTURIAS

BUSINESS ADMINISTRATION PROGRAM
PEREIRA
2019

Daniel Rojas Reyes

Introduction
 Practical Case 2

IKEA case

IKEA is one of the most prestigious, innovative, and important companies in the world.
the market for furniture and home goods. With a groundbreaking business model,
For decades, it has become one of the icons of contemporary design.

This giant was created in Sweden in 1943, as a small business that offered,
low prices, items such as pens, wallets, picture frames, watches, and jewelry
among others; whose name was formed by combining the initials of its founder Ingvar Kamprad and from
the farm and the village where he grew up, Elmtaryd and Agunnaryd. In 1948, Kamprad decided
selling furniture produced by local manufacturers, with a great reception. In 1951 the
starts selling by catalog and in 1953 opens its first store in Älmhult (Sweden) with the
concept of exhibition that characterizes IKEA: for the first time where customers could see
and touch all the furniture and home decor products before buying them.

After 65 years of constant innovations, the company designs its own

furniture and products, which are manufactured by more than 1,500 suppliers in more than 50
countries. According to the group's own data, IKEA has sales worldwide of 27,000.
millions of euros and a net profit of 3.202 million. It has 298 stores, which
They receive 690 million visits and their workforce amounts to 139,000 people. In addition, their website

www.IKEA.com receives 1 billion visits and its loyalty program, the club of
IKEA Family has 57 million members.

IKEA's philosophy is that its products can respond positively to

las siguientes cuestiones: ¿Mejora el día a día? ¿Resulta útil cuando vienen invitados a casa?
Does it speed up the task of cooking? Does it improve the appearance of the house? With that philosophy

they intend to make furniture increasingly economical, and this is not just a promotional phrase
a reality, with an average global price decrease of 0.8% in 2012.
the success of this business model is undeniable. A success focused on efficiency and
productivity and being present for all types of consumers around the world.

IKEA offers a wide range of products for home decoration, with a

excellent design, functional, and at such low prices that most people can
buy them. This is the idea that hides behind everything IKEA does, since
develops and buys its products until they are sold in IKEA stores all over the
world. It is about developing processes that allow minimizing production costs.
 Practical Case 3

Thus, IKEA designs its products based on its knowledge of home life and,
above all, taking into account the needs of the majority of those who have
limited budgets and a home with limited space. Studies the costs of the product
with the idea of manufacturing it at a low price, with the agreement of the design areas and
production. In the creation process, designers and the development team participate.
product and the purchasing managers, who meet to define the materials, shapes,
appropriate colors and suppliers. Each one has the task of using raw materials and methods
optimal manufacturing to meet the goal of offering affordable prices and design
attractive with responsible and intelligent production processes.

Most of the products that IKEA sells today come with

instructions and necessary tools to assemble it, in order to carry out the concept
"Do It Yourself". It refers to a type of furniture known as RTA (Ready To Assemble).
Assembly), which includes any product that requires prior assembly for its use (do-it-yourself).
In addition, these products are stored and transported in flat and uniform packaging,
the goal of reducing costs and prices. The incorporation of flat packaging
It all started when one of the first collaborators of IKEA removed the legs from a table.
to fit in a car and not get damaged during transportation. With the flat package, it does not
this goal was only achieved, more products were also managed to fill the trucks with.
reduce costs in all production processes, ultimately passing this saving on to
the selling prices.

IKEA has taken its production process to the forests themselves, technifying them to
Lay off employees who cut down trees. The logging is done with machines that
they provide a perfect cut and do not let the tree fall to the ground. These trees are
genetically modified to have important qualities in the furniture business:
they grow in less than 3 years, very straight, lightweight wood, high resistance, resistant to the
pests and with high flexibility. With these attributes, their products ensure a material
first renewable and sustainable.

IKEA stores are located on the outskirts of cities, where the

the price of the land is lower, which also helps to keep prices down of the
products.

Each store has exhibition rooms where visitors can evaluate

different decoration solutions and see the products located in different spaces of
 Practical Case 4

home (bathroom, kitchen, living room, dining room, etc.), to try them out and to verify their functionality.

After browsing the aisles and selecting the products they wish to buy, customers
go to the warehouse to pick up the packaged product directly, then go to the checkout to
pay for it, take it home, and once there, assemble it.

In the design of this purchasing process, the ...

Swedish food restaurant and the playground for children, which is always located in the
entrance with the typical colored bags. Eating at Ikea is really cheap and means a
good solution for many families, eating well at a very affordable price. If you add to this
we combine the possibility of letting the kids play, the experience of spending a day outside
turns into another of the points that IKEA exploits the most.

Statement of the problem

What role does the point of sale play in the customer's shopping experience?

2. What services does IKEA offer through its website?

reference: www.ikea.com/en/en/

3. What instruments does IKEA use to retain its customers?

4. IKEA aims to offer low prices. Is this strategy compatible with the...
service quality and customer loyalty?

Objectives

Know the success of IKEA stores according to their strategic map:

profitability - global expansion

Customer = functionality and quality at a low price

management and logistical control of warehouses

Resource = quality production and at low cost

Justification

To understand IKEA's strategies, it is important to understand the market in which it operates.

 Practical Case 5

as well as its environment and the different variables that affect its decision-making process.

Results

What role does the point of sale play in the customer's shopping experience?

IKEA stores have designed a route that customers can hardly resist.
escaping in this way, they ensure that before buying one must go through all the categories of
product. Something that can put some people off but at the same time makes them buy it.
more things than what is really thought to be acquired when entering the trade.
Thus, IKEA has planned a map of hotspots where it knows that customers are
They will focus. The hottest points precisely coincide with the first moments of
Entering the store, a moment when the mind is much fresher and more receptive.

Even so, its predefined route strategy helps ensure that consumers do not stop
see nothing. An idea that, when applied to technology, can lead to a commerce with a disposition
strategic that helps consumers see different products and offers in a single visit.

This is how it will be or it can be

Many times the client is not clear about what a product will be like in a specific environment. How
Will the television stay in the room? Will that home cinema be aesthetically pleasing? To resolve those
doubts, IKEA designs rooms, kitchens, or bathrooms in its segment that could be anyone's
house. Clearly, it will never be the same but it helps to make a decision.

The saying that 'a picture is worth a thousand words' is the faithful reflection of this.
strategy. Why not put it into action? Why not improve our image and show to the
consumers everything they can do with our technology?

Value-added services
It is clear that one of IKEA's successes is the price. Their products are very affordable and are
within reach of almost any pocket. However, everything has a catch and in this case, the giant
Swedish tries to stifle with added services. Based on the philosophy 'if you want more, you can'
to pay”, the store offers a logistics service, another for assembly, financing or planning of
kitchens.

Thus, IKEA manages to be economical while also giving more, albeit at a cost. Even so, the
services are there for the client who needs them and they work. This could be an idea for
 Practical Case 6

cut costs in the store and try to be more competitive.

Providing more services

The shopping experience doesn't end at purchase. IKEA has made many consider going to their
store not just for buying a utensil or another but also for eating a classic hot dog from the
mark or try some Swedish delight. These services complete a shopping experience of a
different form.

What services does IKEA offer through its website

reference: www.ikea.com/es/es/?

Home delivery
Whatever you buy, they deliver it to your house. It doesn't matter if it's a purchase of small items.
items or if, on the contrary, many large items have been purchased, they offer different services of
home delivery so you don't have to worry about anything.

Pickup points
Wherever you live, there is a pickup point near you.

Click & Collect

When there is not enough time to go shopping, you can shop online and pick up the order at
any of the IKEAstores or pick-up points of the external partner companies.

Specialist Advisors Service

If you are thinking about designing or redesigning yourbedroom and/or PAX wardrobes,kitchenliving roomuoffice or
business(the latter for IKEA BUSINESS clients) is in the right place because the
specialists will be happy to do it for you.
Provide the services directly or through external companies, under the agreed conditions.
right at the moment of hiring them.

Request the Card

With the IKEA VISA Card you will enjoy instant and flexible financing:
up to 10 months interest-free to pay at IKEA stores for your purchase.
 Practical Case 7

Finance your purchases at IKEA online

You can now split your online purchases at IKEA, with just one click directly into 10 months without
interests with your IKEA VISA Card.

IKEA Visa app on your mobile

All management of your IKEA VISA Card, now from your mobile. The best way to maintain
the control of your purchases in a quick and easy way.

IKEA PAY App

The app to be able to pay with your mobile without having your card on hand.
Download it and make the most of your IKEA VISA for all your purchases.

More agile, easier

Check the balance

Pay with your mobile
Check movements
Block the card

Installation

Installation of kitchens
Installation of bathrooms

Ceiling or wall installation

Floor installation

Furniture assembly

Furniture assembly service

Assembly of PAX wardrobes
Sofa assembly

Dismantling and removing furniture

You can currently hire it at an IKEAstore.

 Practical Case 8

Sofa removal
Removal of Old Mattress
Disassembly and removal of furniture

Van rental

You can take the groceries home yourself by renting a driverless van.All the rates
it includes the first 60km (remaining km at €0.35/km) and fuel is included in the price so that
don't worry about anything.

What instruments does IKEA use to retain its customers?

Innovation in processes
Flexibility
Support in technology to produce more efficiently and cheaply: Efficiency and Reduction
Cost No stock
Logistics
Teamwork
IKEA FAMILY is the loyalty club of IKEA designed for everyone who enjoys
life at home and they appreciate IKEA.

4. IKEA aims to offer low prices; is this strategy compatible with the
service quality and customer loyalty?
His emotional communication has managed to win over many people beyond his
commercial offer. Your ads: "the Independent Republic of Your House", "Where two fit,
three fit
clearly the message that their home is their space and that it is occupied by people, with their tastes,

needs and emotions. The images also show common houses and common people.
The children step on the sofas and the dogs jump on the bed.

Thanks to your communication, you have created a close and lasting image and bond with your
clients. It is not just a cheap furniture company that you can set up. Also, and above all,
it is a company that knows the tastes and needs of its customers, that understands them and that knows
stand by their side. There is feedback. There is feeling. And it works. Without a doubt, when we talk

In the realm of Lovemarks, few examples are as clear as Ikea.

 Practical Case 9

Conclusions

IKEA maintains its low-cost strategy by integrating the customer into logistics through
of the transportation and assembly process in exchange for a better price.

Selection of suppliers under a specific process of an evaluative group that seeks its
choice at low cost with quality according to IKEA designs and standards.

Its only marketing is through eye-catching and attractive catalogs that it displays.
functional, pretty, and low-cost environments that attract the customer

Their stores operate as large warehouses with a showroom concept of the

different areas (kitchens, bedrooms, dining room, etc.)

Comfort for its customers who can access the parking lot, restaurants,
childcare center.

Bibliographic References

Torekull, B. (2008) THE HISTORY OF IKEA. Its founder reveals the secrets of it.
company that has entered every home in the world. Ed the sphere of books. Madrid.

Web References

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Web pagebhttp://www.ikea.com/us/en/customerservices/faq#faqAnswers3-