Ikea Value Chain Analysis
IKEA Value-Chain Analysis
Posted on July 28, 2012 by John Dudovskiy
“Each step in the manufacture of a product or the delivery of a service can be thought of as a link in a chain that adds value to the product or service. This concept of a how business fulfils its mission and objectives is known as the value chain” (Needles et al, 2007, p.836)
The concept of Value-Chain analysis is introduced by Michael Porter (1985), who divides activities of the firm into two categories: primary activities and support activities. Primary activities are necessary elements for producing the products and offering services, and support activities assist businesses to become successful in the marketplace.
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Source: UK Education (2006, online)
The following tables represent an analysis of IKEA operations on the basis of Value-Chain analytical framework:
Primary Activities
|Activity |Implementation by IKEA |
|Inbound logistics |Distribution of products to the stores from 27 distribution centres |
| |“10,000 IKEA products are manufactured by 2000 suppliers and transported to the IKEA stores” (Berger, |
| |2011, p.3) |
| |“Jobs in logistics account for about 20 -25% of each store’s co-workers” (IKEA, online, 2011) |
|Operations |Operations in more than 38 countries; 208 company operated stores in 26 countries, remaining stores |
| |operated by franchisees. |
| |IKEA does not manufacture its own products |
Posted on July 28, 2012 by John Dudovskiy
“Each step in the manufacture of a product or the delivery of a service can be thought of as a link in a chain that adds value to the product or service. This concept of a how business fulfils its mission and objectives is known as the value chain” (Needles et al, 2007, p.836)
The concept of Value-Chain analysis is introduced by Michael Porter (1985), who divides activities of the firm into two categories: primary activities and support activities. Primary activities are necessary elements for producing the products and offering services, and support activities assist businesses to become successful in the marketplace.
[pic]
Source: UK Education (2006, online)
The following tables represent an analysis of IKEA operations on the basis of Value-Chain analytical framework:
Primary Activities
|Activity |Implementation by IKEA |
|Inbound logistics |Distribution of products to the stores from 27 distribution centres |
| |“10,000 IKEA products are manufactured by 2000 suppliers and transported to the IKEA stores” (Berger, |
| |2011, p.3) |
| |“Jobs in logistics account for about 20 -25% of each store’s co-workers” (IKEA, online, 2011) |
|Operations |Operations in more than 38 countries; 208 company operated stores in 26 countries, remaining stores |
| |operated by franchisees. |
| |IKEA does not manufacture its own products |