Essay on Ikea Case Analysis

1437 Words Apr 8th, 2013 6 Pages
Jamie Richardson
BUSN204
21 March 2013
Ikea Case Analysis
IKEA was truly built from the ground up. It was started in 1943 by Ingvar Kamprad when he was 17 years old, from a shed on the family farm. In the beginning, the company sold fish, Christmas magazines, and seeds to eventually add pens, then furniture to its product list. In the beginning the company had used the milk truck as part of its delivery system to get orders to the train station. In 1953 when the milk truck changed it route, it was no longer available to get items to the train station. This motivated Ingvar to invest in a nearby idle factory and convert it into a warehouse. By this time, with the help of the free catalog which started back in 1949, the business was
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IKEA had to start designing more of its furniture in house and found a manufacturer who would produce IKEA-designed furniture. In this process, the manufacturer was in Poland where they found it is 50% cheaper than to manufacture in Sweden, allowing him to cut prices even more. Here the furniture industry continued to evolve with new technology and cost savings. In 1958, IKEA had opened its first store on site of the first warehouse in Almhult. This was done to supplement the mail-order business; it was to be a place where customers could come to see the furniture set up. This went well; the business even started selling storage containers for car roofs in order for customers to take home their purchases. Ingvar realized that Almhult was a good drive for many of its customers so he decided to put in a restaurant so they could relax and refuel. This was a hit and became an integral feature of all IKEA stores. Competitors argued that IKEA products were low quality, which was quickly diminished when the furniture was tested for quality by a Swedish design laboratory. The laboratory not only stated that IKEA’s quality was good, but maybe better than that of other Swedish furniture manufacturers with prices much lower. Due to this publicity, sales took off, being as it was now acceptable in middle-class households. IKEA had opened a store in Stockholm

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