Love it or hate it, IKEA is the most successful furniture retailer ever With 276 stores in 36 countries, they have managed to develop: Production and Operations Management Case Study, UniKL, Malaysia

University Universiti Kuala Lumpur (UniKL)
Subject Production and Operations Management

Love it or hate it, IKEA is the most successful furniture retailer ever. With 276 stores in 36 countries, they have managed to develop their own special way of selling furniture. Their stores’ layout means customers often spend two hours in the store – for longer than in rival furniture retailers.

IKEA’s philosophy goes back to the original business, started in the 1950s in Sweden by Ingvar Kamprad. He built a showroom on the outskirts of Stockholm where land was cheap and simply displayed suppliers’ furniture as it would be in a domestic setting.

Increasing sales soon allowed IKEA to start ordering its own self-designed products from local manufacturers. But it was innovation in its operations that
dramatically reduced its selling costs.

These included the idea of selling furniture as self-assembly flat packs, which reduced production and transport costs, and its ‘showroom-warehouse’ concept, which required customers to pick the furniture up themselves from the warehouse. Both of these operating principles are still the basis of IKEA’s retail operations process today.

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