IKEA Case Study

This assignment had to be written for the class of Management and Organizations at Stenden University, course IBMS, first year. We had a group of 6 and had to work it out together. We were enjoying getting into the world of IKEA, the world’s most furniture store on the market.

Ikea is a Swedish international home products company that designs and sells ready-to-assemble furniture. It was founded in 1947 by 17-year-old Ingvar Kamprad, who currently is one of the richest people in the world. He borrowed some money for his parents and create a small local furniture store, 65 years later Ikea is one of the leading home furnishing companies in the world with its vision to ‘’create a better everyday life for the many people’’ (Kamprad). The company’s 2011 sales jumped 6.9 percent to €24.7 billion and its net profit rose 10.3 percent to €2.97 billion ($3.85 billion) (Local, 2012).

In order to assess and give recommendations to IKEA, it is important to fully understand the operations and the values that drive the company, ant its philosophy. Since was founded in 1954 by Ingvar Kamprad the Swedish company’s vision of “creating a better life for the many people” inspired them to develop high quality and lower cost products in the furniture business, and almost a decade later, after they consolidate in the Swedish market, they made the decision to expand abroad opening stores in Northway and Denmark respectively (Exhibit 1). With a relatively rapid expansion the company needed to transmit their unique philosophy and created the testament of a furniture Dealer and trained ambassadors to help spread and secure the firm’s values (Exhibit 3). Furthermore, IKEA’s adopted another principle, the company preferred to focus on establish close ties with business partners and supporting their suppliers in a long-term relationship rather than just

IKEA is one of the largest multinational companies in the world dealing with several products. The company sells and designs furniture appliances and home accessories at an affordable price. Ikea has over three hundred stores worldwide enjoying the good name it has created for itself. While they are one of the most profitable furniture companies in the world there are significant challenges and threats that have been overcome and are still needed to be tackled.

By operating the business in Thailand (foreign market), IKEA adopt the strategy called “Think Global, Act Local” in the sense that IKEA maintains, applies and upholds their core values and cultures in their practices, while learning to adapt and understand the Thai culture and the Thai market in terms of needs, desires and wants of Thai people in general in order to survive and succeed.

IKEA, founded in 1943 by Ingvar Kamprad, has a vision “to create a better everyday life for the many people”. With its business idea of “offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”, IKEA’s operational processes continues to focus on creating quality products and services at low costs as well as environment sustainability. (IKEA, 2016) More than being a furniture merchant, IKEA sells a brand that is easily recognizable, chic, stylish, minimalist and modern. It believes that everyone will leave IKEA store with something they like, be it the products or services. Its success is evident internationally where there are more than 300 stores in 35 countries. (Freden, 2015) The case study will

Ikea was successful in entering the furniture retail market in Sweden because it capitalized on good timing and original ideas. At the time of Ikeas initial phases, furniture prices in Sweden rose 41% faster than other household goods between 1935 and 1946. Ingvar Kamprad, the founder of Ikea Saw this as a great opportunity to offer quality furniture at a much lower price than other retailers, that the majority of people can actually afford. Ikea was also able to overcome adversity through creativity in business processes. When initially traditional retailers fought against Ikea’s ideas and banned them from selling at the Stockholm Trade Fair, the took orders or got names of customers in order to sell to them after the event. On another occasion, they overcame trouble with the retail cartel by establishing manufacturing sources in Poland instead of Sweden. This actually resulted in lower costs for Ikea and therefore allowed them to sell products at even lower prices than before. They also differentiated themselves from other companies not only through price but also through store design and location. Instead of locating in downtown hubs, Ikea set up its stores in areas with a lot of land to provide ample parking space which went hand in hand with their concept of cash-and-carry retailing. Furthermore, within the stores established many basic practices, such as wide

IKEA is one of the most successful manufacturing and retail furniture companies operating in today’s global marketplace. IKEA manufacture from the bottom up, top down furniture that offers environmentally friendly, state of the art designed furniture that is both affordable and attractive to its customers via their online, catalogue and worldwide distribution channels, with a logistics network that are low cost footprints with the enforces on cost efficiencies couple with technology, product design, excellence and customer satisfaction. IKEA was founded by Ingvar Kamprad in a small village in Sweden. Its Scandinavian–style home furniture offer attractive designs at affordable prices. And IKEA is obtainable from 275 stores

IKEA is recognized as one of the reputed brands of Sweden, operating in the segment of ready-to-assembled furniture’s, fittings, appliances, and many others designed accessories and equipments. Although it entered in this segment in the year 1943 in Sweden but very quickly it expanded its operations in the markets of China as well. It is mainly due to its modern architectural stylish designs and eco-friendly nature. This helped Ikea to improve its brand image and profitability by almost 50 percent as compared to previous years. This proved extremely effective for Ikea to enhance its customer bases and reliability in the market among many other rival players (Inter IKEA

IKEA is the world’s largest furniture retailer of ‘knock down’ furniture with 300 stores in more than 35 countries. It was founded by Ingvar Kamprad of southern Sweden whose main innovative idea was ‘to offer home furnishing products of good function and design at prices much lower than competitors by using simple cost-cutting solutions that did not affect quality of products so that as many people as possible will be able to afford them. ( www.ikea.com). He used every opportunity to reduce costs without compromising on ideas and quality.

Ikea is a renowned global furniture retail shop that was established by Kampard Ingvar in 1943(Bartlett, 2006). The business began as a grocery and stationery of mail order and later turned into furniture as its main business. Currently, it has over 292 branches in 34 countries globally. Ikea has been operating on the motto “better life for everyone”. Ikea focuses basically on good quality of household furniture and low prices of goods. Ikea strives to build a good social benefits structure and good customer care.

Our co-workers are the strength of IKEA and we recruit based on values. We live by them. We believe in diversity and inclusion and want our co-workers to mirror our customer base in order to best understand and serve our customers. We focus much of our attention to our culture, the IKEA-Spirit, competence development and leadership development. This enables us to work in an environment where everybody takes responsibility and contributes together. We economize with resources and have a positive outlook on the opportunities, knowing that most things remain to be done. During the year, I have visited many parts of IKEA all over the world and always met a fantastic spirit and ambition to make IKEA a good contributor to people’s life at home and society. Thank you all! You are the ones that make IKEA special and unique as we are Growing IKEA-Together Mikael

The intrapreneurial organization that I have selected for my individual report is IKEA. IKEA is a Swedish home furnishing company which produces ready to assemble furniture as well as different home and office appliances. It is the world’s largest furniture retailer. IKEA was established 73 years ago in 1973 by 17 year old Ingvar Kamprad. IKEA means I for Ingvar, K for Kamprad, E for Elmtaryd, the farm where he grew up and A for Agunnaryd, his hometown in Smaland, Southern Sweden. “To create a better everyday life for the many people”, is IKEA’s vision. IKEA is known for its innovative architectural designs and eco-friendly interior designs. The company is well known for its focus on price control, continuous product development and other corporate attributes which allowed it to lower its prices on an average of 2 to 3% over the decade to 2010 during the period of global expansion. To date IKEA operates 328 stores in 28 countries with operations spanning 43 countries having an annual turnover of 32.7 billion euros in 2015. The entire IKEA range consists of 9,500 products which can be seen on its website. It is the user of 1% of the world’s commercial wood resources.

First, IKEA has found “niche” to serve. The fact that they are producing “Scandinavian style” products makes them unique. Their idea of offering a very broad range of products, with limited style variations, the bold colors and the typical Scandinavian names, has created a very strong brand image and also a high recognition value of its products. Also, their slogan “Design with meaning” distuingishes them from their competitors. IKEA offers

IKEA is a Swedish multinational group of companies founded by then 17-year-old Ingvar Kamprad in 1943, that design and sell self-assemble furniture like chairs, tables, beds, appliances and home decorations. Since January 2008, IKEA has been ranked as the world’s leading furniture retailer. IKEA has been established by their high quality, well-designed and functional products at affordable prices and they offer great variety of merchandises. Cost conscious approach is followed by employees and managers, which had been started by the founder. Their companies require down-to-earth, straightforward people who want to help accomplish the IKEA vision- “ To create a better everyday life for the many people ”. IKEA’s human resource management