IKEA Business Analysis

1136 Words5 Pages
IKEA, as a multinational furnishing retailer, has more than 380 stores worldwide, it is important to standardize, synchronize and streamline the business activities in all the outlets in order to make the whole business operation well-organized and well-controlled. Therefore, enterprise system, an enterprise-wide large scale software application package (Kapoor, 2010) which includes Customer Relationship Management system (CRM) and Knowledge Management System (KMS) is proposed to IKEA. An enterprise system which consists of modules like purchasing, inventory management, sales and marketing, finance and business intelligence module can incorporate and coordinate with CRM and KMS to provide better support for business functions and streamline…show more content…
For example, it can reduce hardware, software and maintenance cost of different information system as only a packaged software and a central database are used. By storing all data in a central database, it can reduce redundant data and save storage space. Besides, enterprise system also can lower inventory cost (Kapoor, 2010). By accessing the real-time and updated information of inventory status and sales report, IKEA can forecast customers’ purchasing preference and needs so IKEA can plan its inventory properly without wasting warehouse space and ensure the right amount of products are in-stock. By saving on all these costs, IKEA can always offer products with low price and its position as a leading discounted furniture retailer will not be threaten easily. At the same time, it also solves another threat faced by IKEA, which is decrease of sales due to unstable economic. By providing affordable products continuously, IKEA can attract more customers who have low income. Lastly, the threat of balancing price with quality also can be overcome as the cost saved can be used to maintain low price despite improving the quality of…show more content…
From the result of analysis, it was founded that the degree of rivalry between IKEA and its competitors is intense and the bargaining power of buyer is moderate. Besides, IKEA has weaknesses like hard to control standard and quality across locations and unable to keep good communication with its customers and suppliers. The threats faced by IKEA include more competitors entering the discounted household and furnishings markets, unstable economy and the need to balance between low price and quality. To overcome all these problems, an Enterprise System which incorporate Customer Relationship Management (CRM) and Knowledge Management System (KMS) is proposed to IKEA. By adopting the proposed system, the business operation in different outlets can be standardized and streamlined, different functional units can share data which result in better communication and collaboration, customer service can be improved which lead to high customer satisfaction and loyalty and IKEA can remain
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