The X-Factor of Ikea

IKEA has a worldwide popularity for its feature of discounted furniture with better quality than others. The main credit of this feature owes to the fact that IKEA gets their production done at the low cost locations across the world. Across the globe IKEA has many partnerships with its suppliers which helps maintain the long term relationships. Also, a greater part of its differentiation has its strong roots back to the IKEA’s value chain and its approach towards designing the furniture.
Every item at IKEA is manufactured component wise, which are to be self-assembled by the customer through the instructions included with the articles.   So, the shopping ritual at IKEA is that when a customer selects an article; he/she gets the product code written by the paper and pencil located nearby at the shopping place. Then, he/she takes that paper and moves towards the go down, grabs the trolley and gets the article (recognized by the code) which is packed into flat cardboard box. This way the purchase ends at paying the bill at the counter and the product is easily carried away.
This design feature has not only catered its customers but it has also freed IKEA from the labor costs for assembly at the outlet. The packaging into flat boxes also saves IKEA from the shipping cost across the continents. The flat boxes also help IKEA at maintaining the inventory levels for on the spot pickup and quick delivery. This creates a value chain structure best suited to save IKEA from the manufacturing, assembly, shipping and inventory costs; also it is best suited for every material from wood, glass, fabric and steel.