Ikea Essay

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List the various ways in which IKEA has managed its global environment over time. IKEA was founded by Ingvar Kamprad in 1943. Today IKEA is one of the largest furniture chains in the world with three hundred and fifteen stores operating in twenty seven countries. IKEA has managed its Global Environment in the three major ways which has contributed to its great success. These ways are as follows: 1. Ingvar Kamprad was able to identify the changing trend in consumer wants and adapted his products to these evolving needs. Consumers wanted well designed and well-made furniture at an affordable price. IKEA was able to reduce its cost through developing internal departments to complete task which are usually outsourced by its competitors. 2.…show more content…
IKEA has developed its own manufacturing department which is less costly than outsourcing or purchasing processed pieces from outside. Customers purchase furniture in “flat pack” packages which is assembled by the customer themselves. This lack of assembly removed the cost of hiring employees to assemble piece then sell it. (IKEA, 2015) IKEAs organizational culture and reputation is known around the world. The organization is built in a culture of hearts and IKEA values; hard work, tough challenges and common sense. IKEA is built on the philosophy that all stakeholders play a vital part in the company’s success. The customer group of stakeholders are provided with low cost furniture which meets their needs. Good customer service and reliable products creates brand loyalty which results in customer satisfaction and repeat purchases. Employees of IKEA are treated with respect and emphasis is placed in them being an essential part of the organization. Employees are given training, above average pay and a generous bonus structure. Promotions are given to employees who thrive in the company. (Jones, 2013) Management and owners are responsible for maintaining IKEA’s global values and norms. Management are not spoilt with lavish executive perks and most of top management have risen from within the company. Each year managers are required to work a week in either a store or

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