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 …show more content…
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
In IKEA, the Unsolicited Proposal came from many directions. Firstly, in 1952 the boycott by Swedish retailers to IKEA, obliged to IKEA to seek new sources of furniture. Second, the Swedish furniture market demand fall by the early 1970s. Third, IKEA had identified as we said before two big markets to
IKEA is an abbreviation of Ingvar Kamprad Elmtaryd Agunnaryd. The initials come from the name of the founder, the farm where he grew up and his home parish. The firm has grown rapidly since it was founded in 1948. From a very young age, Kamprad started selling furniture and he always kept his low costs - so low that other furniture stores pressured the National Association of Furniture Dealers in Sweden to stop providing Kamprad with products. The first store of IKEA was opened in Almhult, Sweden. The next stores are in
IKEA Company was founded in 1943 by Ingvar Kamprad. The name of IKEA is originally formed from the first letter of the founder’s name and the names of the property and the village where he grew up. At the beginning, IKEA produced and sold simple things (such as pens, wallets, table, pictures frame, watches and jewellery) in the base of low price. The production of furniture in IKEA began during 1947 and in 1955 IKEA Company started to design its own furniture. Based on the company’s motto “Well designed and affordable quality furniture for everybody,” IKEA has been able to grow into fame company
It all started in 1943, when Ingvar Kamprad opened his first commercial business in the name of IKEA, which derives from his initials and of Elmtaryd and Agunnaryd, the names of his family farm and the parish he grew up in. At first, it was just a “mail-order business selling pencils, postcards, and other merchandise” (“Milestones”). The company first introduced furniture as a complement to the general merchandise in 1948, and it was an immediate success. As a result, the company “started exploring innovating solutions such as furniture design, self-assembly, and advertising” (“Milestones”).
Today IKEA has grown to be a big international company that has more than 353 stores in over 46 countries with over 146,000 employees worldwide. The Swedish heritage can be seen in many of IKEA’s characteristics: from the design of the furniture. IKEA’s vision is to “Keep continuing for a better everyday life of IKEA’s customer”. (IKEA official website) In 1951, sales of furniture dominated the inventory and IKEA decided to focus exclusively on low-priced furniture. IKEA also recognizes edging up his competitive advantage it is later proofed that it is a keystone of IKEA’s later success. Concurrently on the same year, IKEA’s very first furniture catalogue was also published. IKEA also opened its first furniture showroom in 1953, which allowed customers to see and feel the items they were buying providing a “third home concept” which gradually forms into their organizational culture. Their concept was a huge success as most people enjoys handling and viewing a potential product before making a purchase. IKEA’s success is mainly based on strong brand and organization culture where employees regardless of superiority are treated fairly and equally, this is to provide customers with the best shopping
IKEA is known as one of the world’s largest furniture retailer that focuses highly on cost control, operational process and product development. IKEA differentiates itself from most furniture retailers by offering a wide range of well designed array of home furniture at very attractive prices that remain affordable to a large group of diverse customers. There are some unique features of IKEA as compared to most furniture retail stores (IKEA, 2012)
The IKEA group sells quality furniture at a low price, to maintain a strong competitor. For that, the company has to try to cut cost without losing quality in the products that it sells.
1990s IKEA was concentrating on the needs of families and children, it has launched the
IKEA is a leading furniture manufacturer in the world. It has been able to achieve its success because of a unique competitive model that emphasizes simplicity in design and low costs. Based in Sweden, the company has established manufacturing facilities overseas, with its first manufacturing facility opened in Danville, Virginia in the United States in 2008.
It is also noted that the success of the firm was influenced by its external environment in such ways: terrorist threats alarmed many people and they found it essential to renovate their home into a safe haven, furthermore, lagging economies contributed to a certain thriftiness in redecorating or renovation. These factors imposed a demand for easily assembled and inexpensive furniture, which IKEA offers.
“The IKEA vision is to create a better everyday life for many people. We make this possible by 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 established itself as the largest furniture retailer in Sweden by the early 1970s by reinventing the wheel of furniture manufacturing at that time. Majority of furniture manufacturers in Sweden produced expensive products with designs that were basic or passed down generation to generation, additionally other manufacturers stores where located in downtown congested areas. IKEA’s strategies which consisted of low cost low priced furniture, brave intricate designs, self-assembly,
Due to the large scale global business operations of IKEA , controlling standards and quality becomes a difficult task specially in few countries law doesn’t have any influence over the working conditions, which in turn well to cause a disturbance in the supply chain influencing the view of the customers with respect to the credibility of the product.
IKEA is a multinational group of companies, popular for its design and marketing of ready to assemble furniture, appliances and home accessories. It was established by Ingvar Kamprad in 1943 in Sweden. IKEA has derived its name from the initials of Ingvar Kamrad, Elmtaryd (farm where he was raised up) and Agunnaryd (his birthplace in South Sweden). Since January 2008, it is world’s biggest furniture retailer. IKEA owns and operates 325 stores in different regions of the world and is well-known for its architectural eco-friendly designs, diversity in appliances and furniture (Inter IKEA System BV, 2009). It has become one of the world’s largest home furnishing retailers (Jonson, 2008) & has been ranked 44th in 2002 among top brands beating big brand