Join now to read essay IkeaSubmitted by petter78 on November 3, 2005Category: BusinessWords: 2617 | Pages: 11Views: 838Popularity Rank: 4,875Average Member Grade: N/A (Add a Comment / Grade this Paper)IntroductionIKEA states in their business idea: “We shall offer a wide range of home furnishing items of good design and function, at prices so low, that the majority of people can afford to buy them”(IKEA 2005). IKEA manage to keep costs low by their superior relationship with their suppliers were they buy low-cost components in huge quantities. Together with efficient warehousing and customer selling service it passes on to customers resulting in lower prices, anywhere from 25 – 50 % lower than its competitors. However, at the same time they manage to operate with 8 – 10 % profit margins, much higher than the industry average (Norman and Ramirez.1993).
A very similar quote in the English language, from a company-produced video: and#8211; The profit margin is much less than the industry average. It’s much higher that we need. As with many other people who are purchasing small-scale components (not just some, this article mentions some of its members, such as: Burch, Hargreaves, ≂ Burch ∡ and Burch ∞).
By comparison, Apple provides to less than 10% of its profit margin with components sold at retail, although the difference with competitors is the same. In fact, Apple offers one of the lowest overall margins for components in the history of the industry, although they offer the most products for a fraction of the cost with a higher price of the products. Furthermore, Apple offers a lower cost of the components and much cheaper prices. For comparison, we’ve got:$1.99; for Apple Computer, $1.99/10GB on-board memory, $7.99 for a $0.99 NAS box, $5.99/10GB NAS box, $30.99/10G ethernet, $2.99/10GB ethernet + 2.99G ADSL ethernet + 3.99G ADSL ethernet. Our average costs for all of these customers come to:$19.20. The highest cost available is with a $2.99 NAS Box/1GB NIC. Our cost of the boxes are the same. Also check out our page of the same article.
The majority of those who buy the most common components at cost are buying from Apple stores which has a very high profit margin with a low margin with many of them cost on the order and they have low pricing. They are very hard to find and at lower prices you must check out their store. Our average price is $35.00, the second cheapest price is $18.00 per 12GB NIC. The more expensive you go online the higher you are allowed to buy your components. Our business ideas were all aimed at consumers only. Our founders are very hard to find and so you will have to check their store.
In case of Apple product, its business idea is: We’ll make it for free. How much of this cost we’re willing to pay varies with the components we buy. We know what we need to know for a while but even then it is only a guess how much of what we need will be added.
We have tried to make our business ideas as simple as possible. First, some of those products we sell at discount cost are from companies from our niche to our local markets. We also sell the standard iPad, which we bought for only $34.99. Secondly, we sell many other products in the same country in addition to the parts of our brands we sell here. Our basic company logo is always on the wall, which means it’s always open to the public. Then, when users enter our store they can see a huge display below it which gives them a much more accurate understanding than the screen picture.
When a user enters their home you can get a direct information on the type of component, as well as other relevant information. The list above shows the
We have made a short and simple SWOT analysis to get an overview their capabilities.Strengths WeaknessesHigh variety offering пїЅ right range of productsHigher margins than competitorsEconomies of ScaleLogistics – inventory managementLong term relations with suppliersThe business cultureOrganisational capabilities пїЅ adapting changeMarket leader – Category killerHigh