Ikea Current Event

2406 Words Jul 15th, 2006 10 Pages
Background

Ikea was founded in 1943 when Ingvar Kamprad was given the Ikea name by his father. Ikea stands for; Ingvar Kamprad elmtaryd Agunnaryd, the son 's first and last name and the farm and village where he grew up. The first Ikea sold small items such as pencils, table runners and nylon stockings, all for exceptionally affordable prices. Ingvar knew he had found a system that worked, by 1945 he had expanded. Ingvar started advertising in local newspapers and began a do-it-yourself mail order service, where goods were transported by the local milk van to the train stations. In the early 1950 's Ikea published a magazine discovering that customers wanted more, forcing Ikea to innovate. In 1953, the first "hands on" Ikea
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Another of Ikea 's core competencies is their ability to create a positive atmosphere and create enthusiasm within each store through effective design. Since the store is designed in a circle, the concept for the store layout allows one to see all the merchandise in the entire store by simply moving one direction. The aisles are wide to allow for merchandise inspection and constant flow of traffic, merchandise is fully assembled and displayed for viewing and product testing. Ikea also houses a restaurant, kids playroom, and staged room displays to allow for better visualization and overall atmosphere. Ikea 's work structure for employees also helps set the atmosphere and showcase employee dedication and enthusiasm. On a regular basis Ikea hosts Anti-bureaucracy Week, during which executives work on the shop floor and tend to the registers.

Customizing local markets to reflect individual cultures is another of Ikea 's core competencies that have allowed them to be able to hold on to a large market of global lower-middle to middle class consumers, something that even Wal-mart has yet to accomplish. And with just 5-10% of the furniture market accounted for in each country Ikea operates in, there is plenty of room for growth. "Awareness of our brand is much bigger than the size of our company," states CEO Anders Dahlvig.

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