Ikea Essay

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1. What are the core competencies and end products of IKEA? How are they linked with each other? The core competencies of IKEA are the “assemble-it-yourself” furniture and the flat packaging that reduces the cost of transport and storage. Having such “space-friendly” package allows the warehouses to contain sizeable amounts of furniture and trucks to transport significantly much bigger quantity. All of this process reduces the overall cost of storage and transport, therefore, creating a core competency for Ikea. Furthermore, considering the fact that customers have to mount their furniture themselves automatically induces that Ikea won’t need any employees for the assembly like most shops do. This allows Ikea to concentrate their employees in different tasks, saving them a lot of money. The only counter-part of this aspect would be the fact that customers have to take time mounting the furniture, which Ikea considers being a source of fun and a social activity. The end products of IKEA are high quality furniture and in-house products, you have to assemble these yourself as is mentioned before which reduces the costs of these high quality products and therefore the price. End products of Ikea are mostly high quality furniture and in-house products adapted to all. Offering design at low-cost is Ikea’s main objective, and this is the result of adding each core competencies together. Everything is linked in a way that if one of the core competencies turns out not to be one anymore, the whole concept collapses getting Ikea in a dangerous situation. Reducing the storing and transport price due to the “assemble-it-yourself” idea allows Ikea to be money-friendly. 2. How did IKEA diversify? Ikea has always been diversifying both in terms of product variety and international expansion and not only in the last decade but also since it was founded. Back in

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