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IKEA Catalogue

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Natural resources<br />

A furniture giant, <strong>IKEA</strong> primarily produces furniture and home furnishing goods which<br />

consumes at least one percent of the world’s wood supply annually. Hence, to<br />

ensure sustainable operations, <strong>IKEA</strong> purchased more than 250,000 acres of forests in<br />

Alabama, Romania and the Baltic states to sustain the raw materials required for<br />

furniture production. Thus, even when the prices of timber are expected to increase,<br />

<strong>IKEA</strong>’s business operation will be largely unaffected.<br />

Current processes<br />

<strong>IKEA</strong> undergoes intensive research and development processes to keep prices low<br />

for customers and to develop new furniture for their portfolio. Logistics being one of<br />

the largest costs for <strong>IKEA</strong> has proved to be a constant challenge in product<br />

development and production. However, our R&D team are constantly innovating<br />

ways on changing the size or design of the product to allow more products on one<br />

pallet, thus reducing transportation costs significantly. In addition, all production and<br />

packaging are done in-house. Hence, any changes to processes or products can<br />

be altered done easily and uniformly, making it cost effective for <strong>IKEA</strong>.

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