...no guarantees to success without hard work (Nelson, D.L. & Quick, J.C. 2011). The nature of followership that Kamprad seems to have encouraged at IKEA is that of effective followers. His employees must be active, responsible and autonomous in their behavior, critical in their thinking and highly engaged in their work as shown with IKEA’s success. The fact that one main characteristic of IKEA came to be because of an employee, shows how ideas are important. The employees are kept motivated by Ingvar Kamprad because he continues to reflect what he has learned and continues to encourage intellectual development (Nelson, D.L. & Quick, J.C. 2011). The leadership orientation used by Ingvar Kamprad is that of a 9+9 team manager. He uses a paternalistic approach, which is that of “father knows best”. This is described by his drive for profits and his quest to better his employees. He shares what he has learned with them and wants them to not be wasteful and to always think beyond the current way to better things. (Nelson, D.L. & Quick, J.C. 2011). I feel Ingvar Kamprad is an authentic leader which combines transactional leadership, transformational leadership and charismatic leadership. Transactional leadership is defined as one with rewards and punishment to strike deals and shape behavior. Transformational leadership increases a firm’s...
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...IKEA: Leadership Leads to Product Innovation and Globalization Human Resource Management IKEA: Leadership Leads to Product Innovation and Globalization IKEA is a worldwide furniture retailer which sells ready-to-assemble furniture. The IKEA story started in 1926 by its founder ‘Ingvar Kamprad’ was born is Southern Sweden. He was raised on ‘Elmtaryd’, a farm near the small village of ‘Agunnaryd’ if we added all the quotes we can see how the IKEA name was created. The following time table shows how IKEA became an international retailer in 40 countries around the world. Now IKEA is the world’s largest furniture retailer and seller of ready-to- assemble furniture, as we can see from the previous time table that IKEA is expanding globally in different regions all around the world, they has 338 stores in 40 different countries. And in 2012 IKEA achieved 8% growth in profit compared to the previous year, they reached $4.34 billion. Vision: To create a better everyday life for the many people. Mission: 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. With the set vision and mission they are focusing on three main business ideas: * Product Range and Innovation: IKEA products are known for its quality and innovation, they try to create unique products that offer home furnishing solutions for every room in the home, making sure that these products meet daily wants and...
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...LEADERSHIP ANALYSIS OF INGVAR KAMPRAD ! !1/!11 Leadership Analysis of Ingvar Kamprad IKEA, founded in 1943 in Sweden. The IKEA Group has become the largest furniture household businesses in the world. It products including seat / sofa series, office supplies, bedroom series , kitchen series, about 10,000 products. IKEA has 31 stores in 38 countries, 16 stores in China. China has become one of the most important space of IKEA 's largest procurement market and business growth, playing a decisive role in IKEA 's global strategy. The CEO of IKEA, Ingvar Kamprad, one of the richest men in the world. He was born in Mar. 30, 1926 , a town in the south of Sweden. His father is a farmer. He had the rich life in his childhood. But he was interesting in riding a bicycle, selling the products to the neighbors.From this he can feel the happy of earning money. He was not only good at finding others needs but also good at promoting his products. In 1943, Kamprad established his own company, called IKEA. In my paper, I will comb how Ingvar Kamprad grew up in the business world and his leadership behaviors and traits. (Zuvela, 2013) Life Experience Childhood period Ingvar Kamprad was the first child in his family, when he was a little boy he had a strong talent in doing business. Such as his aunt helped him to buy 100 boxes match cost €88, then he sold them out by €2-€3 even if €5. So his profit margin is €1-€2. He was very excited about that. He also sold the fishes and...
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...Strategy adopted? http://www.oppapers.com/essays/The-Strategy-Adopted-By-Ikea/740556 1 Explain, in details, the strategy adopted by IKEA, and how it successfully did the positioning. *** At business level strategy Focus Strategies By implementing a cost leadership or differentiation strategy, IKEA choose to compete by exploiting their core competencies on an industry-wide basis and adopt a broad competitive scope. Alternatively, IKEA can choose to follow a focus strategy by seeking to use their core competencies to serve the needs of a particular customer group in an industry. In other words, IKEA focus on specific, smaller segments (or niches) of customers rather than across the entire market. Focused Business Level Strategies involve the same basic approaches as Broad Market Strategies. Focus strategies can be based either on cost leadership or differentiation. Focused Cost Leadership Strategy IKEA that compete by following cost leadership strategies to serve narrow market niches generally target the smallest buyers in an industry (those who purchase in such small quantities those industry-wide competitors cannot serve them at the same low cost). Global furniture retailer IKEA provide customers with “affordable solutions for better living” through use of the focused cost leadership strategy. The company offers home furnishings that combine good design, function, and quality with low prices. IKEA does this by offering low-cost, modular furniture (assembled by customers)...
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...The cultural web - IKEA Ikea – Hybrid strategy: “Ikea recognised that it could achieve a high standard product, but at a low cost, whilst concentrating on building differentiation on the basis of its marketing, range, logistics and store operations” (Johnson, Scholes & Whittington, 2005, p.249). Power structures The leadership beliefs in an inverted organisational pyramid, where the customer is at the top followed by staff, with top management at the bottom (Sancovich, 2002). The customer is put on top as they have the real power of what Ikea can and should sell. No one in Ikea flies first class is another aspect of the power culture within Ikea (Sancovich, 2002). This is part of the core beliefs of the leadership, as everyone in the organisation should be treated the same regarding of position. In general, Ikea uses an egalitarian leadership style, hence emphasise of getting rid of status and conventions. Even though Ingvar Kamprad is retired, he is still involved in the organisation he founded in 1943 (Allen, 2005). Hence, it is difficult to change the culture in the organisation as he is still pulling the strings. As all the employees is taught and trained the IKEA way, the desire and need for a cultural change is another unanswered question. How is power distributed in the organisation? What are the core beliefs of the leadership? How strongly held are these beliefs (idealists or pragmatists)? What are the main blockages to change? Organisational...
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...company use some strategy to improve their business same as IKEA use some effective strategy to improve their business such as: # Low price strategy # Product strategy # Promotion strategy # Market development strategy Low price strategy: IKEA offers a wide range of well-designed, functional home furnishing products in low price. So that, many people can afford them. Low prices are the main keystone of the IKEA concept and help to make customers want to buy from IKEA. This low price strategy is attached with a wide range of well designed, functional products. IKEA’s products are available for every lifestyle and life stage of its customers. Product strategy: * Wide range of product according to the need of customers. * Product available for different section of the society. * Product adaptation according to the need of different market. * Most of the IKEA products are stylish that makes the company unique. * IKEA designs its own furniture. * IKEA offers a Varity of style. Promotion strategy: * High profile advertisement campaigns. * Online shopping. * Online advertisement. * IKEA provide home delivery service to its customers. Market development strategy: Target new segment and enter new markets with existing products. The potential benefits of international expansion are increased market share, revenues, profit and buyer awareness. Cost leadership: Cost leadership strategy increasing common over the period of time and most...
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...• Week 2 Mini Case: IKEA List IKEA’s external and internal challenges. Looking at IKEA’s challenges, which ones do you think pose the greatest threat? Why? How would you address the challenges? IKEA’s external challenges are mainly Target and K-Mart. Target has recently recruited top designers and launched a wide range of low priced furnishings. On the other hand, K-Mart has done much of the same thing and enrolled Martha Stewart to help with the design of its home furnishings. IKEA’s main internal challenge is since the company’s inception (1943) no strategic decisions have been made without Mr. Ingvar Kamprad, the founder. Since he has stepped down in 2013, his three sons have taken over leadership of IKEA. Another internal challenge has been that IKEA is privately held through a complicated network of foundations which creates constraints in accessing large sums of capital that is needed for rapid global expansion. Walmart entered a period of difficulties after Sam Walton stepped down. Do you anticipate IKEA having the same leadership transition challenges? Why or why not? In my opinion, any company that’s founder is involved from inception until he/she is not physically/mentally capable any longer and then transitions to different leadership will be problematic. When Mr. Kamprad stepped down from IKEA in 2013, his three sons took over leadership. More than likely, they will never value and commit to the company like their father did. Hopefully Mr. Kamprad...
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...The cultural web - IKEA Ikea – Hybrid strategy: “Ikea recognised that it could achieve a high standard product, but at a low cost, whilst concentrating on building differentiation on the basis of its marketing, range, logistics and store operations” (Johnson, Scholes & Whittington, 2005, p.249). Power structures The leadership beliefs in an inverted organisational pyramid, where the customer is at the top followed by staff, with top management at the bottom (Sancovich, 2002). The customer is put on top as they have the real power of what Ikea can and should sell. No one in Ikea flies first class is another aspect of the power culture within Ikea (Sancovich, 2002). This is part of the core beliefs of the leadership, as everyone in the organisation should be treated the same regarding of position. In general, Ikea uses an egalitarian leadership style, hence emphasise of getting rid of status and conventions. Even though Ingvar Kamprad is retired, he is still involved in the organisation he founded in 1943 (Allen, 2005). Hence, it is difficult to change the culture in the organisation as he is still pulling the strings. As all the employees is taught and trained the IKEA way, the desire and need for a cultural change is another unanswered question. How is power distributed in the organisation? What are the core beliefs of the leadership? How strongly held are these beliefs (idealists or pragmatists)? What are the main blockages to change? Organisational...
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...------------------------------------------------- INGVAR KAMPRAD: AN OVERVIEW OF HIS LEADERSHIP Ingvar Feodor Kamprad (born on 30 March 1926) is a Swedish business magnate. IKEA was established in 1943 by a 17-year-old Ingvar Kamprad in Sweden. In 1948, Kamprad diversified his portfolio, adding furniture. The acronym IKEA is made up of the initials of his name (Ingvar Kamprad) plus those of Elmtaryd, the family farm where he was born, and the nearby village Agunnaryd. Mr. Kamprad started off by buying matches in bulk from Stockholm and further selling them at a fair price, but with a good profit. He reinvested his profits and expanded the business to include fish seeds, Christmas tree decorations and pens and pencils, with these experiences, he founded IKEA with the reward money that he received from his father, for doing well in academics. IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories, and is the world's largest furniture retailer. In 2010, Mr. Kampard was named the 11th richest person with an estimated wealth of U.S. $23 billion by Forbes magazine Ingvar Kamprad is the perfect example of a charismatic and democratic leader. IKEA was founded as a pure family business, and till today IKEA’s values are based on the family business concept. A family business has special features that clearly depict its business model and culture, when compared to other...
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... Organisational structure IKEA Sweden: CEO CEO Human resources Human resources Sales management Sales management Production management Production management R&D Management R&D Management Finance management Finance management Exhibit 1: Sweden. Org. Structure Organizational structure of IKEA Sweden is function structure, functions are carried out in a similar way, some functions such as such as research and development are centralised in Sweden. Other functions such as human resources, finance and store construction also span the whole company regardless of organisational boundaries. Other support functions including, Information Technology, Communication, and IKEA Indirect Materials and Service also provide service to IKEA stores globally. From which, IKEA can maintain centralized control over function activities and at the same time take advantage of low cost and enhanced quality from international suppliers. On top of that, control over strategic direction is improved and functional lay-offs are minimized, in order to ensure efficiency in the logistics process, the organization has integrated purchasing and distribution process under one umbrella function. In addition, IKEA was also applied flat organization structure, the system of IKEA is not hierarchy that they only have three levels of responsibility between the manager and co-workers in each store their own. CEO CEO IKEA America: Corporate Management Corporate ...
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...Case Analysis: Kamprad, Leader of IKEA MBA-530 - Organizational Behavior Introduction – Ingvar Kamprad Sustaining a healthy lifestyle consists of having a rewarding job surrounded by great leadership. A defining career is what Ingvar Kamprad has made for himself and has helped others to achieve. His sole purpose was not to be extremely wealthy, although he is. Mr. Kamprad chose to follow his values, including a responsible work ethic that began from a young age. Born within a class of people that thrived on hard work, Mr. Kamprad understood the meaning of dedication. He started as a teenage entrepreneur selling small office accessories and greeting cards “ . . . using the local milk van to deliver orders” (Chan, 2013). Regardless of the size of his business then, Mr. Kamprad had a clear vision for better things to come. The following examines Mr. Kamprad and how he built IKEA into a corporate empire. He is a prime example of an excellent leader to his people and a well-informed manager of his business. Managing business and leading people have important distinctions however. Colleagues respect Mr. Kamprad as a person who genuinely cares about his employees with a talent for influencing them to succeed. There were mistakes along the way, but a proven leader like Mr. Kamprad faced them head on. IKEA, with its expansively designed stores and loyal customer base, was ranked in Forbes (2013), as “#41 World’s Most Valuable Brands”. Leading vs. Managing Managing and leading...
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...out what strategies to use then they can move forward with building a successful firm. 1. Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion. The company that was chosen to be researched is IKEA. IKEA is a well known furniture retailer. IKEA was founded by Ingvar Kamprad in 1943 (ikea.com). Ingvar, at the age of five began selling matches to the local community. He then found out that he was able to buy matches from Stockholm in bulk at a cheaper price and sell it back at a lower price and still make a good profit. Ingvar’s entrepreneurial style brought him to the furniture business. He was able to build the furniture locally, close to his family farm. By having the local manufacturers produce his product designs, the price was kept very low. This enabled Ingvar to sell the furniture at a low price and still make a profit. This type of strategy is known today as cost-leadership. Cost leadership strategy involves the firm winning the market by focusing on and...
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...Problem Recognition Should IKEA become less Swedish and more multicultural? Objectives ▪ To deliver its brand promise to consumers; which is “to create a better everyday life for many people” ▪ To preserve IKEA’s culture and well-define values; togetherness, cost-consciousness, respect and simplicity ▪ To combine fundamental product offerings between low price, well-designed and high quality in order to create consumers’ satisfaction ▪ To take responsibility for people and environment as a prerequisite for doing good business Barriers ▪ Different consumer behavior in different countries; the purchase are highly influenced by cultural and social factors which are diverse in each country. For example, most of people in Hong Kong live in tiny apartment due to restricted estate. They, therefore, prefer moderate and practical furniture for limited space of their dwellings. ▪ Hard to control quality of local suppliers’ production; in some market, IKEA outsources to manufacture its products in lower cost countries. This method can well significantly generate the company’s success to be low cost player. It, however, might have a difficulty in controlling and examining quality of products. ▪ Strong local competitors; who has more experiences and information about the battlefield definitely has advantages in playing games on the rivals. Since the global brand like IKEA forays into countries outside Sweden, the company is facing with local competitors...
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...logistics 1.) Ikea case: (the 3 main topics) a. Competition between suppliers The structure of Ikeas logistic creates a high competition between their suppliers. It is because Ikea is subdivided into (many) Trading Areas, which compete for the commissions the headquarters of Ikea (Ikea of Sweden) gives. Each Trading Area tries to find the best thus cheapest solution for producing and delivering a product, so each of them negotiate with their suppliers and make an offer to the headquater of Ikea. Of course the headquarters (IOS) pick the cheapest combination of producing and delivering (logistics). That is the way the headquarters of Ikea find the cheapest manufacture for their products, including transport and all the other logistic costs. This fits into Ikeas cost leadership strategy. As a second result the Trading Areas plus the suppliers are in a competition, which makes them very efficient. b. Long term orientation Ikea tries to have long contracts with their suppliers. They grant their suppliers a lot of advantages. Ikea shares their knowledge and experience in logistics with them. If a supplier could not deliver a product as cheap as Ikea wants, Ikea helps the supplier to reduce costs. They prefer doing that instead of changing the supplier, it shows the long term orientation of Ikeas supply chain. Ikea is very connected to their suppliers. From the prospective of the suppliers it is a good thing because they can also make long term plans or investments. Ikea helps their suppliers...
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...Case Study Two: Ingvar Kamprad The founder and owner of IKEA, Ingvar Kamprad chooses to live his life as frugally as possible, even though he is one of the wealthiest business in the world (Nelson & Quick, 2013). Kamprad chooses to avoid wearing suits, drives a Volvo that is a decade old, flies economy class, and rides the subway to work (Daniels, 2004). He grew up in a region that many around him used the limited resources that they had available efficiently to succeed (Nelson & Quick, 2013). Manager versus Leader Kamprad can be considered both a manager and a leader is his company. As a manager, he began a catalog company and ensured that it met his criteria for excellence. By managing his resources and time, and utilizing local carpenters to build his furniture, he quickly grew into a storefront (Nelson & Quick, 2013). As a leader, he demonstrates humbleness and caring to his employees, and encourages hard work, creativity, and strict business ethics (Nelson & Quick, 2013). He also admits his human weaknesses to others, showing that even a successful man and business are not without strife (Nelson & Quick, 2013). Nature of Followship Kampard has encouraged his employees to be greater that what they see. He has encouraged his employees to look around them for processes or ideas that should be questioned, and encouraged creativity to make changes (Nelson & Quick, 2013). His company commits to making ecologically friendly products that are good for the environment...
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